Aircraft First Used Outside Nevada Not Subject to Nevada Use Tax

Thursday, March 27th, 2014

 
 
Share
Link
Nevada
General

The Nevada Supreme Court recently ruled that a taxpayer's purchases of two aircraft were not subject to Nevada use tax because the aircraft's first flights were outside Nevada.

Nevada's use tax applies to purchases of tangible personal property for storage, use, or consumption in Nevada. The law presumes that property delivered outside Nevada for use in interstate commerce is not for storage, use, or consumption in Nevada if two requirements are met. First, the property's first use in interstate commerce must be outside Nevada. Second, the property must be continuously used in interstate or foreign commerce for at least twelve months after that first use.

The taxpayer purchased four aircraft to carry employees and guests to and from its business locations. It purchased two aircraft in Arkansas and flew them to Nevada. It purchased another two aircraft in Oregon and flew one to Arkansas and one to California. The taxpayer used the aircraft in interstate commerce from these flights onward. Each of the aircraft flew to and from Nevada on a regular basis.

The Supreme Court decided that the relevant "first use" of an aircraft was its first flight. To be "outside" Nevada for its first flight, an aircraft could neither depart from nor arrive in Nevada. The two aircraft purchased in Arkansas were therefore first used in Nevada and did not qualify for the presumption against use tax. The two aircraft purchased in Oregon, however, were first used outside Nevada. The presumption against use tax did apply to these two aircraft. Because the state did not overcome the presumption, the Court decided that the taxpayer did not owe use tax on the two aircraft purchased in Oregon.

http://www.ttrus.com/sites/default/files/nv/nevada_aircraft.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Louisiana Sales Tax Rates and Exemptions Set to Change...

Friday, May 25th, 2018 -Louisiana's sales tax rates and exemptions are set to change July 1, 2018, when several 2016 law changes will ...

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...