I have heard of setting up a Delaware Corp. to avoid this...anybody know how this is done ?

If you are in this situation, get it resloved. I got a letter from a tax specialist about 1 yr ago and this is what he told me in the letter. This is pertaining to California, but other states may have the same guidelines.

Basically the state has 8 (maybe 9, I can't remember) years to collect on the tax from you. At that point, after the 7th year (or 8th yr) is up, they send you a bill for the initial tax, penalies and interest. The only way to dispute it is to pay it, then dispute it!!!

Here's the scenario of what happend to a guy before the tax specialist could help the guy.......A Guy buys a $1 million plane, keeps it in NV., but flies it to Ca. alot for business. California comes after him for the tax (beacuse it is used in Ca.---the tail #'s were reported to the board of equilization in california) He originally should have paid like $87K in taxes and it would have been done....since he ignored the letters they sent him, after 7yrs. (or 8yrs.) they sent him a bill for over $150K--this included penalites and interest.