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Use Tax

07.25.2014	Lessor of aircraft denied Michigan use tax exemption because aircraft was not leased to the general public in an arm’s length transaction By Carlos Marin, Gardiner B. Davis 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.
07.09.2014	“Common Carrier” and “Sale for Resale” Tax Exemptions Denied to Lessor of Aircraft By Gardiner B. Davis, Carlos Marin 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.
05.22.2014	“Common Carrier” Tax Exemption Lost When Operator Reserves the Right to Select Its Passengers By Gardiner B. Davis 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.
12.13.2013	Missouri Use Tax Applies To In-State Aircraft Sale When Sales Tax Not Collected By Gardiner B. Davis 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.
12.01.2013	Use Of Intermediary Precludes Set-off Of Trade-In Value For Calculation Of Missouri Use Tax By Gardiner B. Davis 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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