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

Thursday, March 5th, 2015

An parked aircraft.

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.

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...