Tax Type
Aircraft Sales and Use Tax
Description
Lease of aircraft by common carrier; Qualification as sale
Topic
Exemptions
Date Issued
01-05-1994
January 5, 1994
Re: Request for Ruling: Sales and Use Tax
Dear ***************
This will reply to your letter of November 2, 1993 in which you request a ruling as to the application of the aircraft sales and use tax to aircraft leased by your client, **** (the "Taxpayer").
FACTS
The Taxpayer is an airline operating in interstate commerce as a common carrier. The Taxpayer is anticipating leasing several aircraft strictly for use in the performance of their common carrier service. The lease of the aircraft meets the definition of a under Virginia Regulation (VR) 630-11-1501(6) (copy enclosed) in that the lease is for a period of time substantially equal to the remaining life of the aircraft and the aggregate lease payments during the term of the lease will substantially equal the value of the aircraft. The Taxpayer is requesting a ruling as to the application of the aircraft sales and use tax on the lease of the aircraft.
RULING
Va. Code §58.1-1505 (copy enclosed) provides an exemption from the aircraft sales and use tax for an aircraft sold to any 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.
Based on the information provided, it is apparent that the Taxpayer qualifies as a common carrier in interstate commerce and furthermore, the lease of the aircraft by the Taxpayer qualifies as a sale as provided under VR 630-11-1501(6). Therefore, I must conclude that the lease of the aircraft by the Taxpayer qualifies for the aircraft sales and use tax exemption as a sale to an airline operating in intrastate, interstate or foreign commerce.
If you should have any further questions, please feel free to contact this office.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7467K
Rulings of the Tax Commissioner