Aircraft sales, leases and rentals, repair and replacement parts and maintenance materials

# A.

The following words and terms, when used in this regulation, shall have the following meanings, unless the context clearly indicates otherwise:

"Aircraft" means any contrivance used or designed for untethered navigation or flight in the air by one or more persons at an altitude greater than 24 inches above the ground. Such term shall not include parachutes.

"Aircraft sales tax" means the tax imposed under Chapter 15 (§ 58.1-1500 et seq.) of Title 58.1 of the Code of Virginia.

"Dealer" means any person owning and placing five or more aircraft for resale during a calendar year who the Tax Commissioner finds to be in the regular business of selling aircraft.

"Gross receipts" means the charges made or voluntary contributions received for the hourly rental and maintenance of an aircraft, all other charges for the use of an aircraft and, unless separately stated on the invoice, all charges for services of pilots or instructors in such aircraft. The term shall also include any amount by which the price estimated under § 58.1-1503 of the Code of Virginia exceeds the charge actually made.

"Sales price" means the total amount paid for an aircraft and all attachments thereon and accessories thereto, without any allowance or deduction for trade-ins or unpaid liens or encumbrances, but exclusive of any federal manufacturers' excise tax.

# B.

The sale, lease or rental (including charters) of aircraft is not subject to the retail sales and use tax provided such transaction is subject to the Virginia aircraft sales and use tax as set forth under Chapter 15 (§ 58.1-1500 et seq.) of Title 58.1 of the Code of Virginia.

# C.

Repair and replacement parts and accessories installed on an aircraft at the time of sale, which are included in the sale price for the purpose of computing the aircraft sales and use tax, are exempt from the retail sales and use tax. Such parts and accessories are also exempt from the retail sales and use tax when installed on leased or rented aircraft when such aircraft are subject to the aircraft sales and use tax based upon gross receipts. These items may be purchased by a dealer exclusive of the retail sales and use tax when a resale exemption certificate, Form ST-10, is presented to the retailer at the time of sale.

The retail sales and use tax is applicable to repair and replacement parts and accessories when an aircraft dealer elects to remit the aircraft sales and use tax upon his purchase of an aircraft rather than upon the gross receipts derived from the lease, charter, or other use of the aircraft. Likewise, purchases of such items by individual aircraft owners or nondealers are subject to the retail sales and use tax.

# D.

Maintenance materials such as oil, grease, soaps, cleaners, etc. used on aircraft are subject to the retail sales and use tax. See the Virginia Aircraft Sales and Use Tax Regulations for information relating to the aircraft sales and use tax generally.