Federal regulations make most aircraft sellers subject to mandatory reporting requirements when they are involved in transactions of more than $10,000. Since a failure to report may trigger both civil and criminal penalties, aircraft dealers should be aware of the need to comply with these requirements. A dealer is required to file Form 8300, reporting the transaction to the IRS, under any of the following circumstances:
In Featherston v. Director of Revenue, the Missouri Supreme Court addressed the question of whether Missouri use tax applied to an in-state sale of an aircraft that fell outside the scope of Missouri’s sales tax statute. Missouri sales tax applies only to in-state transactions. Sales tax does not apply unless the seller is engaged in the business of selling tangible personal property.
In a recent decision in the case of Eagle Jets, LLC v. Atlanta Jet, Inc., the Georgia Court of Appeals considered the claim of an unfortunate buyer whose aircraft crashed during the ferry flight from the seller’s locale to the buyer’s. The case illustrates the importance of including a clear allocation of the risk of loss in any aircraft sale contract.
Though buyers sometimes seek to undo purchase agreements by claiming they were misled by a crafty salesperson, a recent federal case illustrates the limits of this tactic. In Morris Aviation, LLC v. Diamond Aircraft Industries, Inc., the Sixth Circuit Court of Appeals upheld the dismissal of an aircraft buyer’s claim of fraudulent misrepresentation.
A recent federal case in the Western District of Tennessee demonstrates the importance of including a forum selection clause in any aircraft sales agreement. In McMahan Jets, LLC. v. Roadlink Transportation, Inc., the court ruled, in the absence of such a clause, that the Utah seller of an aircraft was subject to the jurisdiction of a Tennessee court when it acceded to a Mississippi buyer’s request that the aircraft be delivered to it in Tennessee.
In a recent use tax ruling, the Missouri Supreme Court addressed the circumstances that would entitle a buyer to use an offset for trade-in value in calculating the use tax due on an aircraft purchase.