Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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500.0000 SALES TO COMMON CARRIERS—Regulation 1621

Annotation 500.0025.400

500.0025.400 Aircraft Fuel—Immediate Shipment or Storage. An international airline constructed an underground fuel storage facility which it intends to lease to a major oil company from which fuel will be sold to the airline, for immediate shipment to a foreign destination. However, the contract is titled "Terminalling Agreement" rather than lease. Further, the terms of the contract specify that the operator of the facility will be under the control of the airline, refer to the fuel being in the airline's custody, and state that all risk of loss is with the airline. In these circumstances, sales into the storage facility cannot be considered to be for immediate shipment, but rather for storage. The exemption in Regulation 1621(b) does not apply. 6/8/88.