Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
335.0000 LEASES OF MOBILE TRANSPORTATION EQUIPMENT— Regulation 1661
335.1375 Purchase of Aircraft. A California corporation is a scheduled common carrier operating pursuant to the provisions of Part 135 of the regulations of the F.A.A. and also operates pursuant to the provisions of Part 298 of the Economic Regulations of the Civil Aeronautics Board. The company also holds an operating certificate for Air Taxi/Commercial. The company purchased an aircraft from a foreign aircraft manufacturing firm and subsequently assigned the purchase contract to a California bank. On receipt of the aircraft, the bank will lease the aircraft to the company for eight years. The aircraft will be used by the company for the interstate and intrastate shipment of freight and also carry passengers within the State of California on a charter basis. The aircraft will be based in this state.
Aircraft operating pursuant to Part 298 of the Economic Regulations of the Civil Aeronautics Board by holders of air tax/commercial operating certificates qualify for the exemption provided for by the statute, provided the persons operating such aircraft use them in the common carriage of persons or property. A company providing air transportation to the public in an aircraft under control of the company's pilot at a rate based on mileage plus standby and other charges, on a nonscheduled basis, is a common carrier. Based on the above described facts, the lease to and the use by the corporation of these aircraft will be exempt from the tax, provided that the corporation operates the aircraft on a common carriage basis. 10/24/69.