South Carolina Code of Regulations › Chapter 117 - DEPARTMENT OF REVENUE › Article 11 - SALES AND USE TAX REGULATIONS › Section 117-331 - Airport Fixed Based Operators

Current through Register Vol. 48, No. 6, June 28, 2024
Airport fixed base operators do business in a number of ways.
				In addition to making sales of new and used aircraft, charter service is
				available, in some instances aircraft are available for lease or rental or
				flight instruction, and gasoline, lubricating oils and greases and repair
				services are generally sold.
Only aircraft purchased for resale or rental may be purchased
				tax free as for resale.
When an aircraft is withdrawn for use primarily in flight
				instruction or charter service a tax is due measured by the reasonable and fair
				market value (purchase price) of the aircraft and a tax is also due when the
				aircraft is subsequently sold.
Conversely, when an aircraft purchased for resale is regularly
				demonstrated for that purpose and also used for charter, instruction, or for
				the private use of the owner, the tax may be paid on the value of the aircraft
				(purchase price), or the tax base may be arrived at by multiplying the actual
				number of flight hours by fifty percent (50%) of the posted hourly solo rental
				rate. By electing to pay a tax on the value of the aircraft withdrawn for
				demonstration purposes a person may reduce his tax liability on a replacement
				demonstrator up to the amount realized on the sale of the used
				demonstrator.
In general, the following would be for application:
1. Sales. All sales of new and used aircraft
			 are subject to the tax when delivered to customers in South Carolina. When
			 aircraft are purchased for use outside this State the tax likewise applies
			 unless the seller, as a condition of the sale, delivers the aircraft to
			 customers at points outside this State. The most acceptable proof of
			 transportation outside the state would be a trip ticket signed by the seller's
			 delivery agent and showing also the signature and address of the person outside
			 this State who received the delivered aircraft.
2. Rental of aircraft. Proceeds derived from
			 lease or rental of aircraft are subject to the tax.
3. Flight instruction. Receipts from courses
			 of instruction given by base operators to students seeking private, commercial,
			 instrument and/or instructor's licenses are not subject to the sales tax.
			 Included in such exempt services are receipts from dual and solo flights which
			 are a part of a course of instruction.
4. Charter service. No tax is due on charges
			 made for charter service. Additionally, no tax would be due on withdrawals of
			 aircraft for use in charter flights originating and terminating in states other
			 than South Carolina.
5. Sales of
			 gasoline for use in aircraft are subject to the tax.
6. Sales of lubricating oils and greases are
			 subject to the tax. Charges made for lubricating services are not taxable, the
			 tax being paid on the value of the lubricant or grease used in furnishing this
			 service.
7. Repair service.
a. No tax is due on the purchase or
			 withdrawal of parts used to repair or recondition aircraft for sale. Likewise,
			 no tax is due on repairs by a person electing to report use on the basis of
			 flight hours.
b. No tax is due on
			 parts withdrawn for use in replacing parts under written warranty contracts
			 given without charge to the purchaser at the time of original purchase,
			 provided the tax was paid on the sale of the part found to be defective or on
			 the sale of the property of which the defective part was a component, and
			 provided no charge for labor or materials is made to the warrantee.
c. All other proceeds derived from the sale
			 of repair parts and service are subject to the tax; provided, however, that
			 where a separation is made between the sale of the parts and the sale of the
			 service, the tax is due only on the sale of the repair parts. The invoice to
			 the customer must show this separation.