The aircraft buyer in McMahan Jets, LLC v. Roadlink Transportation, Inc. discovered that a contract term calling for delivery of the aircraft “in airworthy condition” was not sufficient to protect it from aircraft discrepancies found after the buyer’s prepurchase inspection and acceptance of the aircraft.
The United States District Court for the Northern District of Texas recently decided a case involving an aircraft sales agreement with seemingly conflicting provisions.
The South Dakota Department of Revenue recently issued a release stating that “all air transportation services are not subject to South Dakota sales or use tax” after June 9, 2014. Find the release here: http://sdrevenue.blogspot.com/2014/06/all-air-transportation-services-are-not.html.
In FMG Leasing, LLC v. Dep’t of Treasury, FMG Leasing was a limited liability company formed to hold title to an aircraft. No. 312448, 2014 WL 2931938 (Mich. Ct. App. June 26, 2014) (no reported citation available). FMG leased the aircraft to a concrete company that was one of FMG’s forming partners, and to the company’s president. FMG then sought to take advantage of a statutory exception under Michigan law that permits a lessor of tangible personal property to pay use tax on receipts from the rental of the property, instead of paying a sales or use tax on the full cost of the property at the time of purchase.
Missouri Governor Jay Nixon has now signed a bill extending indefinitely the exemption of aircraft replacement parts from the Missouri sales tax.
The Missouri Administrative Hearing Commission has held that a lessor of an aircraft does not qualify for the “common carrier” or the “sale for resale” tax exemptions, even if the lessee of the aircraft would qualify.
A recent ruling by the Missouri Supreme Court considered whether an aircraft ride operator qualified for the “common carrier” exemption from Missouri use taxes on its out-of-state equipment purchases. In Balloons Over the Rainbow, Inc. v. Director of Revenue, the Court denied this exemption to an operator that reserved the right to reject passengers presenting themselves for carriage. Under these circumstances, the Missouri Supreme Court found that it did not qualify for “common carrier” status and was therefore liable for Missouri use taxes.
The Missouri Supreme Court has held that tickets sold for hot air balloon rides are exempt from the assessment of Missouri sales tax.
A recent decision of the Oklahoma Court of Civil Appeals reinforced the priority of statutory liens protecting aircraft repair facilities.
Both the Missouri House and Senate are currently considering bills that would extend indefinitely the exemption of aircraft replacement parts from the Missouri sales tax.