92-115 | Virginia Tax

Tax Type

Aircraft Sales and Use Tax

Description

Aircraft; Jurisdiction Over National Airport

Topic

Taxability of Persons and Transactions

Date Issued

06-29-1992

June 29, 1992

Re: §58.1-1821 Application: Aircraft Sales and Use Tax

Dear*************

This will reply to your letter in which you seek relief from the Virginia aircraft sales and use tax assessed to your client, *****************(the "Taxpayer").

FACTS

The Taxpayer, a District of Columbia corporation, is the owner of an aircraft which is hangared at Washington National Airport (hereinafter "National"). The aircraft was purchased from a foreign corporation where delivery of the aircraft took place. The contract for the purchase of the aircraft was executed in New York state, as well as the payment for such aircraft. The aircraft is physically located at ********** The Taxpayer was audited by the department and was assessed aircraft use tax, penalty and interest.

It is the Taxpayer's contention that due to the fact the Commonwealth of Virginia ceded its jurisdiction of ***********to the Federal Government, aircraft located at the********* are required to be licensed with the Commonwealth, thus are not subject to the Virginia aircraft sales and use tax imposed under Va. Code §58.1-1502. Therefore, the Taxpayer is requesting the assessment be abated in full.

DETERMINATION

Va. Code §58.1-1502 addresses the levying of the Virginia aircraft sales and use tax and states, in part, the following:

- There is hereby levied and imposed, in addition to all other taxes and fees of every kind now imposed by law, a tax 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. (Emphasis added).

In accordance with the above, Va. Code §5.1-5 states:

- Every resident of this Commonwealth owning a civil aircraft, every nonresident owning a civil aircraft based in this Commonwealth over sixty days during any twelve-month period and every owner of an aerial application aircraft operating within this Commonwealth or of a civil aircraft operated in this Commonwealth as a for-hire intrastate air carrier shall, before the same is operated in this Commonwealth, obtain from the Department an aircraft license for such aircraft. (Emphasis added).

By enactment of the General Assembly of Virginia, effective July 1946, the Commonwealth ceded to the United States exclusive federal jurisdiction over the Washington National Airport property, retaining only limited taxing powers that did not arguably permit the Commonwealth to require civil aircraft located at National to be licensed by the Commonwealth under §5.1-5 of the Code of Virginia. Chapter 26, 1946 Va. Acts 46. As a consequence, the Virginia Department of Aviation did not require the licensure of aircraft based at National. In 1987, however, Congress ceded to the Commonwealth concurrent police power authority [The Metropolitan Washington Airports Act of 1986, Pub.L. No. 99-591, 100 Stat. 3341, 1187 49 U.S.C. app. §2458(c)], which retrocession the Commonwealth accepted by enactment of the General Assembly, Chapter 665, 1987 Va. Acts 1138, 1142. This analysis is set out in the recent informal opinion of the Office of the Attorney General dated April 30, 1992 (copy enclosed). As a consequence, the Department of Aviation has the authority, as provided under the Metropolitan Washington Airports Act, to license aircraft in accordance with Virginia Code §5.1.5, thus rendering such aircraft subject to the 2% aircraft sales and use tax.

Based on the above, I must deem the audit assessment to be due and payable in full.

Sincerely,

W. H. Forst
Tax Commissioner

TPD/5047K

Rulings of the Tax Commissioner