Aircraft Purchased For Lease to Common Carrier Exempt As Purchase For Resale

Thursday, March 5th, 2015

 
 
An parked aircraft.
Share
Link
Missouri
Transportation

The Missouri Supreme Court recently held that when an aircraft is purchased for lease to a common carrier, the purchase is an exempt purchase for resale.

The taxpayer purchased an aircraft in Kansas and then leased the aircraft to a common carrier, which moved the aircraft to Missouri. The Missouri Department of Revenue assessed the taxpayer for use tax, which the taxpayer paid under protest. This eventually came to the Missouri Supreme Court ("Court").

Missouri exempts purchases made for resale from sales and use tax. "Purchase" is defined as the acquisition of tangible personal property through a sale for the purpose of storage, use, or consumption in Missouri. "Sale" is defined as any transfer of tangible personal property, including a lease where the right of use is fully transferred.

The Court ruled that the lease qualified as a sale. Leases qualify as sales where the right of use is fully transferred, even if title or ownership is not transferred. In this case, the lessee had full right of use. Because the lease to the common carrier was a sale, the taxpayer's purchase of the aircraft was a purchase for resale. Therefore, the purchase was exempt.

http://www.courts.mo.gov/file.jsp?id=83997


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.

Vehicles Used to Transport Materials between Facilities...

Wednesday, August 15th, 2018 -The Arkansas Department of Finance and Administration recently ruled that a vehicle used to transport in-proce...

Economic Nexus in Washington

Monday, August 13th, 2018 -Effective October 1, 2018, certain out-of-state businesses will be required to collect and pay Washington sale...

Economic Nexus in Michigan

Thursday, August 9th, 2018 -Effective October 1, 2018, certain out-of-state sellers will be required to collect and pay Michigan sales or ...

Georgia Suspends Tax on Jet Fuel

Wednesday, August 8th, 2018 -Effective August 1, 2018, Georgia no longer collects state level sales and use tax on jet fuel. Georgia tax...

Employment Services Contracts for Permanent Employees Not...

Monday, August 6th, 2018 -The Ohio Board of Tax Appeals recently addressed whether contracts entered into by an employment services agen...

Alarm Systems and Monitoring Not Taxable in Missouri

Wednesday, August 1st, 2018 -The Missouri Department of Revenue recently released a ruling determining that (1) security, fire, tornado, an...