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Contract Language Calling For Sale “As Is” Prevails Over Airworthiness Provision When Prepurchase Inspection Fails To Note Condition Compromising Airworthiness

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.

Contract Term Requiring Delivery of Aircraft in Airworthy Condition Prevails Despite “As Is” Language in Sale Agreement

The United States District Court for the Northern District of Texas recently decided a case involving an aircraft sales agreement with seemingly conflicting provisions.

New Ruling: “All air transportation services are not subject to South Dakota sales or use tax.”

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.

Lessor of aircraft denied Michigan use tax exemption because aircraft was not leased to the general public in an arm’s length transaction

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 Signs Bill Extending Sales Tax Exemption

Missouri Governor Jay Nixon has now signed a bill extending indefinitely the exemption of aircraft replacement parts from the Missouri sales tax.

“Common Carrier” and “Sale for Resale” Tax Exemptions Denied to Lessor of Aircraft

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.

“Common Carrier” Tax Exemption Lost When Operator Reserves the Right to Select Its Passengers

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.

Tickets for Scenic Aircraft Rides are Exempt from Missouri Sales Tax

The Missouri Supreme Court has held that tickets sold for hot air balloon rides are exempt from the assessment of Missouri sales tax.

Aircraft Repair Lien Takes Priority Over Lender’s Security Interest

A recent decision of the Oklahoma Court of Civil Appeals reinforced the priority of statutory liens protecting aircraft repair facilities.

Missouri Legislature Considers Proposals to Extend Sales Tax Exemption on Aircraft Replacement Parts

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.

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