| (24) Separated contract--A written agreement in which
the agreed price is divided into a separately stated charge for incorporated
materials and a separately stated charge for skill and labor. An agreement
is a separated contract if the charge for incorporated materials and
the charge for labor are separately stated on an invoice or billing
that, according to the terms of the contract, is deemed to be a part
of the contract. Adding the separated charge for incorporated materials
and the separated charge for labor together to give a lump-sum total
does not transform a separated contract into a lump-sum contract.
An aircraft completion, repair, remodeling, maintenance, or restoration
contract that separates the charge for incorporated materials from
the charge for labor is a separated contract even if the charge for
labor is zero.
(25) Service provider--A person who repairs, remodels,
maintains, or restores tangible personal property belonging to another.
(26) Wildlife--Animals, other than insects, that normally
live in a state of nature and are not ordinarily domesticated.
(b) Sales tax.
(1) The sale, lease, or rental of an aircraft, aircraft
engine, or component part in Texas is the sale, lease, or rental of
tangible personal property, and is subject to sales tax, unless otherwise
exempt under Tax Code, Chapter 151 (Limited Sales, Excise, and Use
Tax) or Chapter 163 (Sales and Use Taxation of Aircraft). The lease
or rental of an aircraft complete with pilot or crew for a single
charge is a nontaxable transportation service, rather than the lease
or rental of an aircraft, even when the charges for the aircraft and
the pilot or crew are separately stated. For more information about
leases and rentals, refer to §3.294 of this title (relating to
Rental and Lease of Tangible Personal Property).
(2) Sales tax is due on the total sales, lease, or
rental price of the aircraft, aircraft engine, or component part.
The total sales, lease, or rental price includes separately stated
charges for any service or expense connected with the sale, lease,
or rental, including transportation or delivery charges. The total
sales, lease, or rental price does not include separately stated cash
discounts or the value of any tangible personal property taken as
a trade-in by the seller in the regular course of business in lieu
of all or part of the price of the aircraft. For more information
on determining the taxable sales price of an item of tangible personal
property, refer to Tax Code, §151.007 ("Sales Price" or "Receipts")
and §3.294 of this title.
(c) Use tax.
(1) General rule. Use tax is due on the use, storage,
or other consumption in this state of an aircraft purchased, leased,
or rented outside of Texas and brought into Texas to be used in Texas.
For more information about the application of the use tax to aircraft
engines and component parts, refer to §3.346 of this title (relating
to Use Tax).
(2) Presumption of purchase for use in Texas. An aircraft
purchased, leased, or rented outside of Texas and then brought into
Texas by a purchaser is presumed to have been purchased from a seller
for use in Texas and is subject to Texas use tax. An aircraft that
is brought into Texas by a person who did not purchase the aircraft
directly from a seller is not presumed to have been purchased for
use in Texas.
(3) Predominant use outside of Texas.
(A) An aircraft purchased, leased, or rented outside
of Texas and then brought into Texas is not subject to Texas use tax
if the aircraft is predominantly used outside of Texas for a period
of one year beginning on the later of:
(i) the date the aircraft was acquired, by purchase,
lease, rental, or otherwise, by the person bringing the aircraft into
Texas; or
(ii) the date the aircraft was substantially complete
in the condition for its intended use and conducted its first flight
for the carriage of persons or property.
(B) For purposes of this subsection, an aircraft is
predominantly used outside of this state if more than 50% of its total
departures are from locations outside of Texas.
(C) The owner or operator of the aircraft must maintain
records sufficient to show each of the aircraft's departures. The
comptroller may examine all records maintained on any aircraft brought
into Texas, including logs, to determine the percentage of the aircraft's
total departures that were made from locations in Texas.
(4) Completing, repairing, remodeling, or restoring
aircraft in Texas. An aircraft purchased, leased, or rented outside
of Texas and then brought into Texas for the sole purpose of completing,
repairing, remodeling, or restoring the aircraft is not subject to
Texas use tax.
(A) Completion, repair, remodeling, or restoration
includes flights solely for troubleshooting, testing, or training,
and flights between service locations under an FAA-issued ferry permit.
(B) Any use of the aircraft for business or pleasure
travel during the time that the aircraft is being completed, repaired,
remodeled, or restored means the aircraft was not brought into Texas
for the sole purpose of completion, repairs, remodeling, or restoration,
and Texas use tax may be due on the aircraft.
(C) The owner or operator of the aircraft must maintain
records sufficient to show all uses of the aircraft within Texas.
The comptroller may examine all records maintained on the aircraft,
including logs, to determine the actual use of the aircraft in Texas.
(5) Use tax credit. The purchaser or lessee of an aircraft
is allowed to claim a credit against Texas use tax due on the use
of the aircraft for any legally imposed sales or use tax due and paid
on the sale or use of the item by the purchaser or lessee of the item
to another state or any political subdivision of another state. For
information on taking a credit for tax paid to another state, refer
to §3.338 of this title (relating to Multistate Tax Credits and
Allowance of Credit for Tax Paid to Suppliers).
(d) Related parties.
(1) The sale, lease, rental, or other transaction between
a person and a member, owner, or affiliate of the person involving
an aircraft that would not be subject to tax, or would qualify for
an exemption from tax if the transaction were between unrelated persons
remains not subject to tax or exempt from tax to the same extent as
if the transaction were between unrelated persons.
(2) Except as provided in paragraph (3) of this subsection,
the use of an aircraft by an affiliate of the purchaser of the aircraft,
or an owner or member of either the purchaser or its affiliate, is
not subject to tax if the purchaser paid Texas sales or use tax on
the purchase of the aircraft, or the purchase of the aircraft was
exempt from Texas sales or use tax.
(3) The exemption in paragraph (2) of this subsection
does not apply if the purchase of the aircraft was exempt as:
(A) a sale for resale; or
(B) an occasional sale, unless the owner, member, affiliate,
or the owner or member of the affiliate, who is leasing or renting
the aircraft could have purchased the aircraft as an occasional sale.
For information on the occasional sale exemption, see subsection (j)
of this section.
(e) Tax exemptions specific to aircraft. In addition
to the other exemptions from tax provided under Tax Code, Chapter
151, the following tax exemptions apply specifically to the sale,
lease, rental, and use in Texas of aircraft, aircraft engines, and
component parts. A person selling, leasing, or renting an aircraft,
aircraft engine, or component part may accept a properly completed
exemption certificate from the purchaser in lieu of collecting Texas
sales and use tax at the time of the transaction. A purchaser claiming
a sales tax exemption under this subsection may provide the seller
with a properly completed exemption certificate at the time of the
transaction. A purchaser who does not claim the exemption at the time
of the transaction may subsequently provide documentation to the comptroller
to prove that the exemption applies, except as provided in paragraph
(4) of this subsection. For more information, refer to §3.287
of this title (relating to Exemption Certificates).
(1) Certificated or licensed carriers.
(A) Sales and use tax is not due on the sale, lease,
or rental of an aircraft to a certificated or licensed carrier.
(B) Sales and use tax is not due on the sale, lease,
or rental of component parts of an aircraft to a certificated or licensed
carrier.
(C) Sales and use tax is not due on the sale or use
of tangible personal property that is necessary for the normal operations
of, and is pumped, poured, or otherwise placed in, an aircraft owned
or operated by a certificated or licensed carrier.
Cont'd... |
