Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Uniform Local Sales and Use Tax Annotations


Annotation 715.0515


715.0515 Local Tax Exemptions. Information was requested regarding the application of the local tax exemptions to the following items purchased by airlines for use in their business and also any guidelines to determine which items qualify for the exemption. (1) Sodas and Ice. The airline is considered the consumer when these items are served as part of meals and they qualify for the exemption. When these items are sold or furnished as a component part of alcoholic beverages, they are not eligible for the exemption.

(2) Alcoholic Beverages. Even when served as part of a meal, they are not directly used in carriage service. No exemption is available.

(3) Electronic Flight Information Display System. These monitors are used as part of the airline's business activity, but are for the benefit of the general public, including ticketed passengers. No exemption applies.

(4) Computer Equipment Used for Reservations and Ticketing. Assuming that the equipment is used solely for reservations and ticketing, it qualifies for the exemption.

(5) Ticket Counters, Sky Cap Stations, Gate Check In Counters. Assuming these items are used as part of the airline's business activity, they qualify for the exemption.

(6) Signboards. They fill much the same role as printed schedules. While useful to the business, they are not essential and do not qualify for the exemption.

(7) Menu Used for Meal Selection. While a convenience, they are not reasonably necessary for passenger maintenance; no exemption applies.

(8) Pillows. See response to Item 7.

(9) Ticket Envelope. Holds the ticket and also advises the passenger of the flight number and seat assignment. The exemption appplies.

(10) Polyliner Bags. Used to collect passenger discards and trash from the restrooms. Assuming this item was purchased from sellers outside "airport counties", if used at the airport, the use tax exemption would apply.

(11) Markers. Used for mailing tickets and also general administrative functions. The exemption does not apply.

(12) Ground Power Units and Air Start Carts. The use tax exemption does not apply to shop equipment nor to aircraft engine and systems test equipment.

(13) Ground Handling Equipment. Tugs used for positioning the aircraft and ground equipment used for transporting the baggage to, and loading it on the aircraft qualify for the exemption.

To qualify for the operation of partial exemption from local use tax, the property must be used directly and exclusively in the use of aircraft for the carriage of persons or property. Sales to airlines of tangible personal property which is generally useful to the business but not directly and exclusively involved in the carriage of persons and property which is part of the carrier's business activity, are not covered by the exemption. 8/30/91, 12/4/91.