Tax Type
Retail Sales and Use Tax
Description
Fuel for airline runway equipment
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-29-1989
November 29, 1989
Re: Request for Ruling/Sales and Use Tax
Dear*********************
This will reply to your letter of July 8, 1989 in which you request a ruling on the applicability of the retail sales and use tax, the motor vehicle fuel sales tax and any local option taxes to sales by your business.
FACTS
******** (the "Taxpayer") sells at retail unleaded gas to certain airlines and freight carriers for use in the baggage carts and other equipment on the runways at******* International Airport. It requests a ruling as to whether certain airlines qualify as common carriers and whether, as such, would be exempt from the sales and use tax, the motor vehicle fuel sales tax, and any local option taxes.
RULING
Virginia Code §58.1-608(3)(f) provides an exemption from the retail sales and use tax for:
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- [t]angible personal property sold or leased to an airline operating in intrastate, interstate or foreign commerce as a common carrier providing scheduled air service on a continuing basis to one or more Virginia airports for use or consumption by such airline directly in the rendition of its common carrier service. (emphasis added)
- [t]angible personal property sold or leased to an airline operating in intrastate, interstate or foreign commerce as a common carrier providing scheduled air service on a continuing basis to one or more Virginia airports for use or consumption by such airline directly in the rendition of its common carrier service. (emphasis added)
The department has previously held that the equipment necessary for the loading or unloading and handling of passenger baggage was used directly in the rendition of an airline's common carrier service, and, as such, qualified for exemption from the sales and use tax under the above section. (see enclosed ruling letter). Similarly, baggage carts and other runway equipment such as that used in aircraft marshalling and push out would be exempt from the tax. This exemption for baggage carts is consistent with Virginia Retail Sales and Use Tax Regulation 630-10-24.3 (common carriers of property by motor vehicle) and 630-10-24.4 (common carriers of property or passengers by railway), which both exempt property used directly in the loading and shipping of freight.
Additionally, motor vehicle fuels sold to an airline and "used directly in the rendition of its common carrier service in interstate, intrastate or foreign commerce operations providing 'scheduled air service'" are exempt from the 2% motor vehicle fuel sales tax pursuant to section 3 of the Virginia Motor Vehicle Fuel Sales Tax Regulation, copy enclosed.
Thus, fuel used in baggage carts and other runway equipment would be exempt from both the 2% motor vehicle fuel sales tax and the 4.5% retail sales and use tax.
In your letter you ask whether certain airlines qualify as common carriers providing scheduled air service as defined above. According to the Virginia Department of Aviation, of the airlines you mentioned, the following qualify as common carriers:
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- American, Braniff, United, Emery International, Presidential Airways, Trans World Airlines, Pan American, Continental, Northwest, Federal Express, British Airways, Delta, and U.S. Air.
- American, Braniff, United, Emery International, Presidential Airways, Trans World Airlines, Pan American, Continental, Northwest, Federal Express, British Airways, Delta, and U.S. Air.
The department is not aware of any local option taxes which may apply to the Taxpayer's sale of fuel to airlines. However, since the department does not administer local option taxes, the Taxpayer should contact officials of Loudoun County to determine if it may be subject to any local option taxes.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner