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ST 2008-04 - Sales and Use Tax: Aircraft Parts and Repair–
Issued August 2008
The purpose of this release is to explain the impact of a
recently enacted sales and use tax exemption for certain
aircraft maintenance and repair transactions. Am. Sub.
H.B.562 of the 127th Ohio General Assembly included a new
sales and use tax exemption, found in Ohio Revised Code
section 5739.02(B)(49). That exemption was effective Aug. 1,
2008 and applies to:
(49) Sales of materials, parts, equipment, or engines used
in the repair or maintenance of aircraft or avionics
systems of such aircraft, and sales of repair, remodeling,
replacement, or maintenance services at a federal aviation
administration certified repair station in this state
performed on aircraft or on an aircraft's avionics, engine,
or component materials or parts. As used in division
(B)(49) of this section, "aircraft" means aircraft of more
than six thousand pounds maximum certified takeoff weight
or used exclusively in general aviation.
What is Covered by the Exemption?
The first portion of the new statutory provision exempts
“Sales of materials, parts, equipment, or engines used in the
repair or maintenance of aircraft or avionics systems of such
aircraft.” Thus, any purchase of materials, machinery, parts,
tools, or engines used in the repair of aircraft or the
avionics of aircraft qualifies for exemption. Note: tools or
equipment that may be used for repair or maintenance of
aircraft and avionics that are also used by the consumer for
other purposes would be exempt only if the primary (majority)
use of the item purchased will be in the repair or
maintenance of aircraft or avionics.
The second portion of the exemption applies to “sales of
repair, remodeling, replacement, or maintenance services at a
federal aviation administration certified repair station in
this state performed on an aircraft or on an aircraft’s
avionics, engine, or component materials or parts.” Repairs,
maintenance, remodeling or maintenance transactions that
occur at a repair facility that is not a Federal Aviation
Administration (FAA) certified repair station do not qualify
for this exemption.
What is an “Aircraft” for Purposes of this
A general definition of an “aircraft” includes essentially
any vehicle that is able to fly. This includes both lighter
than air vehicles such as balloons and heavier than air
vehicles such as fixed wing aircraft and helicopters.
For purposes of this exemption, an “aircraft” includes those
aircraft that are either “of more than six
thousand pounds maximum certified takeoff weight” or are
“used exclusively in general aviation.” To qualify, an
aircraft must meet one of the two criteria; it need not meet
both. The Aircraft Owners and Pilots Association website
provides the following definition of “general aviation”:
General aviation is all civilian flying except scheduled
Military aviation and scheduled passenger flights are not
considered to be “general aviation. However, other exemptions
may apply to repair and maintenance parts and services for
aircraft used for military or scheduled passenger aviation.
Generally, parts for and repairs to military aircraft would
be exempt as sales to an exempt government entity. Scheduled
passenger airlines that operate under a “Certificate of
Public Convenience and Necessity” issued by the United States
Department of Transportation are considered public utilities
under R.C. 5739.01(P) and are entitled to exemption on parts
and repairs to those aircraft used in that service.
The following are some examples, in question and answer
format, dealing with the application of this exemption.
Q1. What is the effective date of the new
A1.The new exemption went into effect on Aug. 1, 2008.
Q2. I operate an FAA certified repair station and I
took a plane in to perform maintenance in July. I returned
the plane to the customer and billed the customer for the
repair in August. Does the exemption apply?
A2. Under the facts described, the transaction would be
exempt. However, if the repairs were billed prior to Aug. 1,
or if the repairs were completed and delivered to the
customer prior to Aug. 1, the tax would apply.
Q3. I perform aircraft repair and am an FAA-qualified
mechanic. However, my business is not an FAA certified repair
station. Does the exemption apply to repairs or maintenance I
perform on general aviation aircraft? If not, what is the
taxable price of my repairs or maintenance?
A3. No. The exemption for repairs and maintenance only
applies to those services performed by an FAA certified
repair station. You should still collect and remit tax on
your transactions performed in Ohio. If you separate the
charges for parts and labor in your bill to the customer,
only the labor portion of the repair or maintenance service
would be taxable. If you do not separate the charges, the
entire charge to the customer would be taxable.
Q4. I operate an FAA certified repair station and I
repair commercial passenger aircraft. Does the exemption
apply to these transactions?
A4. Commercial passenger aircraft are not used in general
aviation. However, to the extent these aircraft are in excess
of six thousand pounds maximum certified takeoff weight, the
exemption would apply to your repair and maintenance of them.
Furthermore, commercial passenger airlines that hold a
Certificate of Public Convenience and Necessity under 49
U.S.C. 41102 are defined as “public utilities” under Ohio
Revised Code (“R.C.”) section 5739.01(P). Repairs to items
used directly in the rendition of a public utility service
are exempt from Ohio sales or use tax. See R.C.
5739.01(B)(3)(a) and 5739.02(B)(42)(a).
Q5. I repair and maintain my own aircraft and
aircraft that belong to others. I do not, however, operate an
FAA certified repair station. Do I need to pay tax on my
purchases of parts or equipment used to repair and maintain
my aircraft? What about the parts and equipment I use to
repair other persons’ aircraft?
A5. The exemption for “sales of materials, parts, equipment,
or engines used in the repair and maintenance of aircraft or
avionics of such aircraft” is not limited to FAA certified
repair stations. So the exemption would apply to your
purchase of these parts and equipment. You should give your
supplier a fully-completed exemption certificate when making
an exempt purchase.
Q6. I had my general aviation aircraft repaired at a
repair station outside Ohio. Do I owe use tax on the receipt
of the benefit of the repair service when I bring the
airplane back to Ohio?
A6. If the out-of-state repair station was FAA certified, you
would not owe use tax. R.C. 5741.02 exempts from the
Ohio use tax, “tangible personal property or services, the
acquisition of which, if made in Ohio, would not be subject
to (the Ohio sales tax).” However, if the repair was
performed at a repair station that was not FAA certified,
Ohio use tax would be due. If sales tax was properly charged
and paid to the state where the repair was performed, you can
claim a credit against the Ohio use tax up to the amount of
the tax paid to the other state.
Q7. Does the exemption apply only to the state sales
and use tax, or does it also apply to local sales and use
A7. The exemption applies to all state and local (county and
transit authority) sales and use taxes.
If you have any questions regarding this matter, you should
direct your questions to one of our taxpayer service centers
or call 1-888-405-4039.
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