Tax Type
Aircraft Sales and Use Tax
Retail Sales and Use Tax
Description
Aircraft; Authority to license aircraft
Topic
Property Subject to Tax
Date Issued
10-21-1992
October 21, 1992
Re: §58.1-1821 Application: Sales and Use Tax
Dear***********
This will reply to your letter of August 4, 1992 in which you request reconsideration of my original determination of June 29, 1992 regarding the aircraft sales and use tax assessment to your client, *****************(the Taxpayer).
Your arguments notwithstanding, I do not see any basis for the department to diverge from the opinion of the Office of the Attorney General that the Metropolitan Washington Airport Act of 1986 (Transfer Act), Pub. L. No. 99-591, §6009(c), 100 Stat. 3341, 1187 49 U.S.C. app. §2458(c), grants to the Department of Aviation the authority to license aircraft in accordance with Va. Code §5.1-5, thus rendering such aircraft subject to the two percent aircraft sales and use tax.
However, assuming for the sake of argument that the Transfer Act is not applicable, the Airport and Airways Development Act of 1970 clearly granted the Commonwealth the authority to collect the retail sales and use tax at Washington National Airport. See Commonwealth v. United Airlines, 219 Va. 374, S.E.2d 124 (1978). If the Department of Aviation does not have the authority to license aircraft under the Transfer Act as you assert, then the Department of Taxation has the authority to assess the four and one-half percent retail sales and use tax on aircraft. See Va. Code §58.1-608(A)(1)(f), which exempts only those aircraft subject to the aircraft sales and use tax, and Virginia Regulation 630-106, which provides that "the sale of aircraft... is not subject to the retail sales and use tax when such transaction is subject to the Virginia aircraft sales and use tax."
Clearly, it appears that it would be in your client's best interest to pay tax on the aircraft in question at the 2% aircraft sales and
use rate.
I am therefore, reaffirming my determination of June 29, 1992 to uphold the aircraft sales and use tax assessment and this will be my final determination in this matter. Accordingly, the department is recommencing collection activity.
Sincerely
W. H. Forst
Tax commissioner
OTP/6340K
Rulings of the Tax Commissioner