Tax Type
Aircraft Sales and Use Tax
Description
Aircraft registration and licensing
Topic
Taxability of Persons and Transactions
Date Issued
07-23-1986
July 23, 1986
Re: §58.1-1821 Application/Aircraft Sales and Use Tax
Dear****************
This will reply to your letter of May 28, 1986, in which you request relief of an aircraft sales and use tax assessment issued to *********** as the result of her registration of an aircraft with the Department of Aviation.
Section 58.1-1502 of the Code of Virginia imposes a tax of two percent "upon the retail sale of every aircraft sold in the Commonwealth and upon the use in the Commonwealth of any aircraft required to be licensed by the Department of Aviation pursuant to §5.1-5 (of the Code of Virginia)." The aircraft in question was based in Virginia for more than sixty days during a twelve month period in 1983, therefore, it was required to be licensed under Virginia Code Section 5.1-5. When at the request of the Department of Aviation a license was obtained for the aircraft, your client was listed as the owner of the craft. As an aircraft sales and use tax return was not completed prior to the licensure of the aircraft, an assessment was subsequently issued to your client. You contest such assessment, stating that your client was merely the pilot of the aircraft, possessing no ownership interest whatsoever. In support of your position, you furnish copies of the aircraft's purchase agreement and financing agreement, both of which list the name of a corporation.
Based upon the information submitted, there is some reason to believe that your client may not be the owner of the aircraft in question. However, I have not been presented with information sufficient enough to clearly demonstrate the actual owner of the craft or to refute the information contained on the aircraft license obtained by your client from the Department of Aviation.
In order to establish that your client is not the owner of the aircraft in question, it will be necessary for the true owner to file with the department the enclosed aircraft sales and use tax return and to remit the tax, penalty, and interest due. Upon the filing of such a return, the liability outstanding against your client will be abated and the amounts previously collected from your client on the assessment will be refunded with interest. In the event that such a return is not forthcoming, it will be necessary for your client to submit any additional ,information that might contradict the information on the aircraft license and establish the true owner of the craft at the time of licensure.
The department will forestall collection activities for 45 days in order for a tax return to be filed or other information to be provided. A return or further information should be directed to the department's Technical Services Section at P. O. Box 6-L, Richmond, Virginia 23282.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner