Tax Type
Aircraft Sales and Use Tax
Description
Aircraft; State of port base and purchase
Topic
Taxability of Persons and Transactions
Date Issued
05-28-1997
May 28, 1997
Re: § 58.1-1821 Application: Aircraft Sales and Use Tax
Dear***************
This will reply to your letter in which you seek correction of an aircraft sales and use tax audit assessment of your client, *********(the "Taxpayer"), for the period July 1990 through August 1990.
FACTS
Based on the 1994 Airport Survey at Leesburg Municipal Airport in Leesburg, Virginia, the Taxpayer owned and had based at the airport, a 1978 Beech Baron Model 58 aircraft, tail number********serial number*********. Several attempts were made by the department's auditor to obtain information in order to determine the tax status of the aircraft for Virginia aircraft sales and use tax purposes. Absent the requested information, the auditor issued an assessment based on the Aircraft Blue Book value.
It is the Taxpayer's contention that the aircraft in question was purchased in North Carolina, has been permanently based in North Carolina, and the North Carolina tax has been paid. The Taxpayer states that all of this information was provided to the auditor upon receipt of the department's field audit report. The Taxpayer requests that the aircraft tax audit assessment be revised accordingly.
DETERMINATION
Code of Virginia § 58.1-1502 levies a 2% aircraft sales or use tax "upon the use in the Commonwealth of any aircraft required to be licensed by the Department of Aviation pursuant to § 5.1-5." Code of Virginia § 5.1-5 provides for the licensing of aircraft as follows:
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- 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... shall, before the same is operated in this Commonwealth obtain from the Department an aircraft license for such aircraft.
Based on the above, and the information furnished to the department by the Department of Aviation, it appears that the Taxpayer's aircraft would be subject to the Virginia aircraft sales and use tax. While it is provided in your letter that the Taxpayer furnished to the auditor information to the effect that the aircraft in question was not subject to the Virginia aircraft sales and use tax, the department has no record of receiving such information. It is for this reason that the department requests that the Taxpayer resubmit any information which would substantiate the tax exempt status of the aircraft. Such records should include flight logs, hangar receipts, and documentation showing payment of the any North Carolina taxes. It should be pointed out that Code of Virginia § 58.1-1504, copy enclosed, allows a credit against aircraft tax for taxes paid on an aircraft purchased in another state. Such credit shall not exceed the 2% Virginia aircraft tax and the Taxpayer would be responsible for any additional taxes due should the credit be less the Virginia aircraft tax due.
Please forward all information to *****Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880 within 60 days of the date of this letter. Absent additional information, the department has no alternative but to assume the outstanding aircraft tax assessment is valid. If you should have any question, please contact ****at ********* .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/11566K
Rulings of the Tax Commissioner