135 vs 91 which is has more tax advantages

[MAJICJOHNSON]

Looking to start operating the PHENOM 100 a part 23 aircraft. From a tax vs cost standpoint which is more advantageous 135 or 91.

 

[Freight Dog]

I flew and managed a new King Air 350 in SoCal.

We took delivery of it in PDX = no tax. However, since we were based in California, we had to get tax exemption, and in order to qualify, after 6 months we took a snapshot - at least 50% of our trips had to be inter-state for business purposes. You can get around the "business purposes" if you put the aircraft on a charter certificate and fly interstate trips. In any case, we qualified with something like 70% of trips being inter-state. The boss saved something over half a mil net by not having to pay California sales tax on his aircraft, despite paying excise taxes since he would charter the plane to his entities for his use.

In order to do track the hours, I had a nice Excel spreadsheet outlining and adding up every hour put on the plane, and then breaking it down and calculating the percentage. Additionally, save your receipts to "substantiate" your trips - fuel receipts, landing fees, hotels, etc. all have to match the dates you have on your spreadsheet. .

Takes a little work, a little involvement, but it'll save your boss a bundle.

As a disclaimer, I'm not a tax attorney, nor CPA. You want to consult a tax professional in your state.