Aircraft First Used Outside Nevada Not Subject to Nevada Use Tax

Thursday, March 27th, 2014


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.

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 or call 866.578.8193.

Texas Releases Detailed Guidance on Exempt Organizations

Thursday, October 18th, 2018 -The Texas Comptroller has released a publication that provides detailed information on how sales and use tax a...

Telephone Answering Services Taxable in Arkansas

Tuesday, October 16th, 2018 -The Arkansas Department of Finance and Administration recently ruled that the service of answering calls on be...

Washington Provides Guidance on Lodging Tax for Online...

Friday, October 12th, 2018 -The Washington Department of Revenue released updated guidance that provides tax reporting information for bed...

Economic Nexus in West Virginia

Wednesday, October 10th, 2018 -The West Virginia State Tax Department announced that it will require remote sellers to begin collecting sales...

Idaho Provides Guidance on the Exemption for Medical...

Monday, October 8th, 2018 -The Idaho State Tax Commission recently released guidance that explains Idaho's sales and use tax laws for buy...

Arkansas Does Not Follow Federal Law on Foreign Income

Friday, October 5th, 2018 -The Arkansas Department of Taxation and Finance recently released an opinion that says the state does not conf...