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Compliance with FARs Provides Defense to Claim of Negligence Against Aircraft Manufacturer

A February decision by a federal court in Washington State found that federal regulation of aviation safety has “occupied the field” with respect to aircraft design and testing.

Report to IRS Is Required for Sales Not Paid by Personal Check or Bank Wire

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:

Missouri Use Tax Applies To In-State Aircraft Sale When Sales Tax Not Collected

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.

Presence Of Unrepaired Squawks Does Not Overcome Sale Contract’s Allocated Risk Of Loss

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.

Aircraft Dealer’s Compliment Concerning A Distressed Manufacturer Does Not Constitute Fraud

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.

The State Selected For Delivery Of An Aircraft May Exercise Personal Jurisdiction Over The Seller

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.

Use Of Intermediary Precludes Set-off Of Trade-In Value For Calculation Of Missouri Use Tax

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.

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