Basis of tax; estimate of tax; penalty for misrepresentation

# A.

Basis of tax for sale or use. The commissioner shall levy and collect tax for the use or sale of an aircraft upon the basis of the sale price of the aircraft.

# 1.

Invoice required. Any person who sells an aircraft in Virginia must supply the buyer with an invoice signed by the seller or his representative. The invoice must state the sale price of the aircraft. The buyer must present the invoice to the commissioner with his return and payment of the tax.

# 2.

Basis of tax. The basis of the tax is the sale price, including any amount credited for trade-in or any other transaction of like nature, except that if the aircraft is first used or stored for use in Virginia six months or more after its acquisition, the tax will be based on the current market value.

Under the regulated definition of "aircraft," the six-month period referred to in this section begins only when a plane is capable of flight.

Example 1: Individual D purchased in Virginia on January 1, 1982, an inoperable wrecked plane. The aircraft was stored for repairs until September 1, 1982, when the aircraft license application was made. The aircraft sales and use tax is levied on the acquisition cost on September 1, 1982, when the plane qualified as an "aircraft." No credit is allowable for the retail sales and use tax imposed pursuant to Chapter 6 (§ 58.1-600 et seq.) of Title 58.1 of the Code of Virginia paid on the purchase of repair parts.

Example 2: Individual E purchased an aircraft in Maryland on January 1, 1982, and used it in Maryland until September 1, 1982, when licensed for use in Virginia. The tax is levied on the current market value of the aircraft on September 1, 1982, since it was brought into Virginia for use more than six months after acquisition.

Example 3: On January 1, 1982, individual A purchased an inoperable wrecked plane in North Carolina and transported the wreckage to Virginia on the day of purchase. The plane was brought into Virginia for restoration and ultimate use in the Commonwealth. The repairs were completed and the aircraft license application was made on September 1, 1982. The tax is levied on September 1, 1982, on the original cost of the wrecked plane plus restoration cost. The plane did not qualify as an aircraft in Virginia until capable of flight and therefore the tax is levied at such date.

# B.

Basis of tax for monthly gross receipts return. An approved and registered dealer must submit monthly returns to the department and remit Virginia aircraft sales and use tax upon the gross receipts from the lease, rental, charter, or other compensatory use of any aircraft he elects to exclude from the sales tax at time of purchase. For purposes of this section, the terms "lease" and "rental" refer only to leases or rentals not qualifying as sales under 23VAC10-220-5.

# C.

Invoice not available, assessment by commissioner. Where the invoice is not available, or where the commissioner has reason to believe the invoice does not reflect the true sale price, or the aircraft was purchased more than six months prior to its use or storage in Virginia, the commissioner may assess the tax. Under these circumstances, the tax may be assessed in accordance with such publications or other data as are customarily employed in ascertaining the maximum sale price of aircraft.

# D.

Fair price for rental or use. If the commissioner finds that a dealer has made a charge for the rental or use of an aircraft that is lower than the fair market value of such rental or use, he may estimate a fair price. An estimate of fair price as used here means in accordance with the cost of the aircraft, the cost of maintenance, the normal rental value as shown in similar transactions, or other relevant data. The amount by which the fair price estimated under this section exceeds the charge actually made by the dealer will be included in "gross receipts" as used in this section.

# E.

Misrepresentation. Any person who knowingly misrepresents on an invoice between buyer and seller, on any return, or to the commissioner the value of an aircraft or the amount of tax due shall be, upon conviction, guilty of a Class 1 misdemeanor.