SALES TAX ON AIRCRAFT PARTS AND REPAIRS IN FLORIDA
The general rule is aircraft parts are considered to be tangible personal property, which are subject to tax when purchased or used in Florida. Sections 212.02(19), 212.05, and 212.06, Florida Statutes (“F.S.”). However, the legislature has provided an exception to this general rule.
Specifically, parts used to repair an aircraft that is repaired or maintained in Florida are exempt from Florida sales and use taxes. Section 212.08(7)(rr), F.S. The key to this exemption is the aircraft must have a maximum certified takeoff weight of more than 2,000 pounds. Since labor charges are taxable when paired with an otherwise taxable repair, the legislature has also exempted the labor on these usually taxable repairs of aircraft with a maximum certified takeoff weight of more than 2,000 pounds. Section 212.08(7)(ee), F.S.
Naturally, the next question is how do you prove you are entitled to the exemption? The Florida Department of Revenue (“Department”) has published guidance that the tail number (or “N” number) as well as the maximum certified takeoff weight should be documented on the bill of sale, invoice, or other proof of sale. Whether you are a purchaser or a seller, please ensure you follow this direction by the Department. It is incredibly easy to do ahead of time instead of trying to piece it together afterwards during an audit.
For foreign aircraft, there is an obscure provision that allows for parts to be exempt from tax, regardless of the aircraft’s weight. This exemption states the aircraft owner, agent, or operator must furnish the seller a notarized statement that the aircraft was brought to the United States for the purpose of having the parts installed and that once complete, the aircraft will leave under its own power from the continental United States. Rule 12A-1.007(10)(d)2., Florida Administrative Code (“F.A.C.”). Remember, since this is an exemption, the burden is on the person claiming the exemption to have everything needed to complete the exemption. At the end of this article is a link to a sample affidavit for this exemption.
A final repair exemption is for repairs or changes done under the authority of a supplemental certificate issued by the Federal Aviation Administration (“FAA”). Rule 12A-1.007(10)(f), F.A.C. Like with foreign aircraft, the exemption is regardless of the aircraft’s weight. However, the changes to the aircraft must not cause a new type certificate to be needed. A copy of the FAA supplemental certificate and FAA Form 337 describing the change and signed by a holder of an FAA inspection authorization should be kept by the business performing the repairs or changes. The Department also requires a copy of this information to be mailed to:
Florida Department of Revenue
Compliance Determination – Campaigns
P.O. Box 6417
Tallahassee, FL 32314-6417.
In conclusion, there are various ways to have the repairs or changes to an aircraft exempt from tax. Most aircraft qualify. Ensuring the aircraft qualifies is key to protecting yourself from having the exemption disallowed and owing a lot in tax, penalties, and interest.
About the author: David Brennan is an associate attorney with Moffa, Sutton, & Donnini, P.A. His primary practice area is multistate tax controversy. David received a B.S. in Accounting and Finance, with a minor in Computer Science, from Florida State University. He worked as an accountant for a CPA firm before attending law school at Regent University. He received his Juris Doctor in 2013 and was licensed to practice law in Florida in the same year. In 2015, David earned his Masters of Laws in Taxation from Boston University. While working for the Florida Department of Revenue as a Senior Attorney, David focused on aircraft sales and use tax issues, among various other areas. You may contact David via email at DavidBrennan@FloridaSalesTax.com or 850-250-3830. You can read his BIO HERE.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
AUTHORITY
AFFIDAVIT FOR PARTS AND EQUIPMENT INSTALLED ON AIRCRAFT OF FOREIGN
ADDITIONAL ARTICLES TO READ
SALES TAX ON AIRCRAFT LEASING IN FLORIDA, published March 31, 2017, by David Brennan, Esq.
No Florida Sales Tax On Aircraft Purchased By Non-Resident?, published November 6, 2016, by David Brennan, Esq.
Florida Airplane - Florida Use Tax Considerations, published January 9, 2017, by David Brennan, Esq.
AIRCRAFT AIRPLANE vs FLORIDA SALES TAX, published September 13, 2015, by Jerry Donnini, Esq.
FLORIDA USE TAX AUDIT LETTER?, published June 14, 2015, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.
GO TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.
FL TAX – VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, published October, 5, 2012, by Jerry Donnini, Esq.