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 500.0145

500.0145 Sale of Part of an Aircraft. A manufacturer of aircraft parts is contracting with a common carrier for the sales of an "aircraft." The common carrier will purchase the "aircraft" without any engines being furnished by the manufacturer and, instead, will furnish its own engines.

The delivery of the aircraft in California will occur under one of the following three fact patterns:

(1) The purchaser will take delivery after manufacturer installs the purchaser's engines onto the aircraft.

(2) The purchaser will take delivery after a contractor other than the manufacturer installs the purchaser's engine onto the aircraft.

(3) The purchaser will take delivery of the aircraft with engines being loaned by the manufacturer. The purchaser will then have its own engines installed elsewhere and return the loaned engines to the manufacturer.

In each of these cases, the proposed sale of the airframe with installed engines to a common carrier, as described above, would qualify as an exempt sale of an aircraft pursuant to section 6366. 4/28/86.