Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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105.0000 AIRCRAFT—Regulation 1593

Annotation 105.0062

105.0062 Common Carrier. The owner of an aircraft has an agreement with a common carrier and under the circumstances listed below the agreement was not a lease of the aircraft to a common carrier and therefore not exempt from tax under Regulation 1593(a)(1).

(1) The owner is required to pay all fixed, direct, and incidental costs incurred in operation and maintenance of the aircraft.

(2) All charter advertising was in the carrier's name, but the content of the advertisement was subject to the owner's approval, and paid for by the owner.

(3) The owner accounts to the carrier for all charter hours flown, and to submit to the carrier the completed flight logs within three days of each charter.

(4) The flight crew members, who are employed by the owner, have been directed by the owner to comply with the carrier's policies and procedures.

(5) The carrier needed advance approval from the owner to fly an actual charter for a third party customer.

The above circumstances and ensuing action effectively resulted in the aircraft and pilots being under the control of the owner and not the carrier. A common carrier qualifying under Regulation 1593, is the carrier who schedules and approves use of the aircraft, conducts the FAR Part 135 flights, controls the pilots and aircraft during those flights, prepares the Part 135 flight logs, and then accounts to the owner/lessor. In this situation, the owner's control of the aircraft negates any contention that the carrier had the exclusive possession and control of the aircraft necessary for the carrier to have conducted Part 135 carriage operation. 12/15/93.