| (1) Manufacturer's written warranty or recall campaign.
(A) Sales or use tax is not due on the use of incorporated
materials or services furnished by the manufacturer to repair an aircraft,
aircraft engine, or component part under a manufacturer's written
warranty or recall campaign.
(B) Records must be kept by a service provider showing
that the incorporated materials or services were used in repairing
an item under a manufacturer's written warranty or recall campaign.
(C) A service provider purchasing incorporated materials
used in a repair under a manufacturer's written warranty or recall
campaign may issue a properly completed exemption certificate to the
seller in lieu of paying tax on the purchase.
(2) Extended warranties and service policies.
(A) Sales tax is not due on the sale of an extended
warranty or service policy that covers an aircraft, aircraft engine,
or component part.
(B) A service provider performing services under an
extended warranty or service policy must collect sales or use tax
on the sale or use of incorporated materials as required under subsection
(g)(2)(A) of this section, unless the aircraft, aircraft engine, or
component part is owned by a certificated or licensed carrier, a flight
school or instructor providing qualified flight instruction, or an
agricultural aircraft operation.
(j) Occasional sales. The purchase of an aircraft,
aircraft engine, or component part is exempt from sales and use tax
if the purchase meets the definition of an occasional sale provided
by §3.316 of this title (relating to Occasional Sales; Transfers
Without Change in Ownership; Sales by Senior Citizens' Organizations;
Sales by University and College Student Organizations; and Sales by
Nonprofit Animal Shelters).
(k) Sales for resale.
(1) A person selling, leasing, or renting an aircraft,
aircraft engine, or component part may accept a properly completed
and signed resale certificate from the purchaser at the time of sale
in lieu of collecting tax on the sale if the person does not know,
and does not have reason to know, that the sale is not a sale for
resale. For more information on the good faith acceptance of a resale
certificate, refer to §3.285 of this title.
(2) A person purchasing, leasing, or renting an aircraft
in a transaction that meets the definition of a sale for resale may
provide the seller or lessor with a properly completed resale certificate
if the person:
(A) holds a valid sales and use tax permit at the time
of the transaction; and
(B) does not intend to exclusively lease the aircraft
together with a crew or pilot.
(3) A person purchasing, leasing, or renting an aircraft
in a transaction that meets the definition of a sale for resale who
does not provide the seller or lessor with a properly completed resale
certificate at the time of the transaction may subsequently provide
documentation to the comptroller to prove that the resale exemption
applies.
(4) The purchase of an aircraft for lease or rental
to another does not qualify as a sale for resale unless more than
50% of the aircraft's departures during the one year period beginning
on the date of purchase are made under the operational control of
a person other than the purchaser, pursuant to one or more written
lease agreements, in exchange for consideration. For purposes of this
subsection, consideration is not required to be in the form of a cash
payment, and may be fixed, variable, or periodic.
(l) Local tax. Local sales and use taxes, including
taxes imposed by a city, county, transit authority, or special purpose
district, apply to aircraft in the same manner as any other tangible
personal property.
(1) Sales consummated in Texas. Generally, local sales
taxes are allocated to the local taxing jurisdictions in which the
seller's place of business is located, and the seller must collect
the local sales tax, without regard to whether the aircraft is actually
delivered to, or intended for use in, a Texas location in a different
local taxing jurisdiction. If the seller does not collect the applicable
local tax, the purchaser must accrue and remit local tax to the comptroller.
(2) Sales consummated outside of Texas. When an aircraft
is purchased or leased outside of Texas and brought into Texas, local
use tax is due based on the local taxing jurisdictions in which the
aircraft is first stored or used. If the seller does not collect the
applicable local tax, the purchaser must accrue and remit to the comptroller
any local use tax due.
(3) For more information regarding the local tax collection
and reporting responsibilities of sellers and purchasers, refer to §3.334
of this title (relating to Local Sales and Use Tax).
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