TAA 21A-017 Aircraft

QUESTION 1: Does Taxpayer’s purchase of aircraft XXXXX, which was delivered in Florida, removed and registered outside of Florida, qualify for the exemption from sales tax, pursuant to s. 212.05(1)(a)2., F.S. 

ANSWER 1: Yes 

QUESTION 2: Is Taxpayer’s use of aircraft XXXXX in Florida during the first six (6) months of purchase is exempt from use tax, pursuant to s.212.08(7)(fff)1., F.S. 

ANSWER 2: Yes. 

October 26, 2021

Technical Assistance Advisement (TAA) - 21A-017

Sales and Use Tax - Aircraft

Sections 212.02, 212.05, 212.06, 212.08, Florida Statutes (F.S.)

Rules 12A-1.007, Florida Administrative Code (F.A.C.)

XXXX (Taxpayer)

SSN ***-**-XXXX

Dear XXXX: 

In response to your letter dated July 7, 2021, requesting this Department’s issuance of a Technical Assistance Advisement (TAA) regarding the taxability of aircraft purchased by nonresidents. Your request has been carefully examined, and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.

REQUESTED ADVISEMENTS 

1. Whether Taxpayer’s purchase of aircraft XXXX, which was delivered in Florida, removed and registered outside of Florida, qualifies for the exemption from sales tax, pursuant to s. 212.05(1)(a)2., F.S. 

2. Whether Taxpayer’s use of aircraft XXXX in Florida during the first six months of purchase is exempt from use tax, pursuant to s.212.08(7)(fff)1., F.S.

FACTS PROVIDED 

On October 16, 20Taxpayer’s representative requested a TAA 20, regarding the taxability of aircraft sold and delivered to nonresident purchasers, in Florida. Since the transaction was pending and lacked the required documentation, on January 22, 2021, the Department issued a nonbinding Letter of Technical Advice (LTA) advising of the conditions that must be fulfilled in order for an aircraft purchase by a nonresident to be exempt pursuant to s. 212.05(1)(a)2., F.S. Taxpayer is a resident of XXXX. 1 Taxpayer also owns residential real property in XXXX, Florida, where Taxpayer stays four to five months a year but does not make his permanent place of abode. The Florida residential real property is not homesteaded.

On XXXX, XX, 2020, Taxpayer and XXXX, (Seller) entered into Aircraft Purchase Agreement - XXXX (Agreement), wherein Seller agreed to sell, and Taxpayer agreed to purchase and take delivery of a XXXX (aircraft), Serial Number XXXX, Federal Aviation Administration (FAA) Registration Number XXXX 

According to the Agreement, the Scheduled Delivery Month of the aircraft was XXXX 2020. The Aircraft was to be presented to Taxpayer for inspection, acceptance, and delivery in fly-away factory condition at the Seller’s XXXX, Florida location.

To establish Taxpayer’s entitlement to the exemption provided in s. 212.05(1)(a)2., F.S., on January 19, 2021, Taxpayer’s representative submitted2 the following documentation: 

• Aircraft Bill of Sale dated XXXX, 2020 
• XXXX Certificate of Registration 
• FAA Certificate of Aircraft Registration, issued on XXXX 
• Affidavit for Exemption of Aircraft Sold for Removal from the State of Florida by the Nonresident Purchaser executed on XXXX, 2020 
• Flight Aware activity log from XXXX, 2020, through XXXX, 2021 showing that the aircraft departed Florida on XXXX, 2020, and had not returned to Florida as of XXXX, 2021 
• Aircraft logbook showing all flight activity
• Various Fuel and Hangar receipts

On July 7, 2021, Taxpayer’s representative resubmitted Taxpayer’s request for a TAA and provided additional Flight records showing that during the first six months following purchase, (XXXX, 2020, through XXXX, 2021), the aircraft was in Florida 17 days. Taxpayer’s representative states that Taxpayer intends to continue to bring the aircraft into Florida after the first six months of purchase.

TAXPAYER’S POSITION 

Taxpayer’s representative asserts that Taxpayer meets the requirements for the exemptions set forth in ss. 212.05(1)(a)2., and 212.08(7)(fff), F.S. 

On XXXX2020, Taxpayer purchased an aircraft which was delivered in XXXX, Florida. Taxpayer’s representative asserts that Taxpayer meets the requirements set forth in s. 212.05(1)(a)2., F.S., and the purchase and delivery of aircraft XXXX is exempt from Florida sales tax. Taxpayer’s representative provides that Taxpayer is not a Florida resident and does not make his permanent place of abode in Florida. Taxpayer’s representative states that Taxpayer has provided documentation to satisfy the requirements for the exemption.

Additionally, Taxpayer’s representative asserts that Taxpayer qualifies for the exemption provided in s. 212.08(7)(fff), F.S. Taxpayer’s representative states that Taxpayer’s flight records demonstrate that within the first six (6) months after purchase (XXXX 2020, through XXXX 2021), the aircraft was present in Florida less than 21 days. 

Taxpayer’s representative provides that Taxpayer will not be carrying on in Florida of any employment, trade, business, or profession in which the aircraft will be used in Florida, but Taxpayer intends to continue to bring the aircraft into Florida after the first six months of purchase.

LAW AND DISCUSSION 

Nonresident Aircraft Purchase 

Section 212.05(1)(a)1., F.S., provides that sales of tangible personal property in Florida are subject to tax, unless a specific tax exemption applies.5 Section 212.05(1)(a)2., F.S., provides an exemption for the purchase of an aircraft sold by or through a registered Florida dealer or to a purchaser who, at the time of taking delivery of the aircraft, is a nonresident of Florida and does not make his permanent place of abode in Florida. To qualify for the exemption, the nonresident purchaser must comply with the following statutory and regulatory requirements:

1) Sign and provide to the selling dealer an affidavit attesting the: 

• purchaser has read subsection 12A-1.007(10), F.A.C., and s. 212.05, F.S.; 
• purchaser is not a resident of Florida and does not make his permanent place of abode in Florida at the time of taking delivery of the aircraft; and 
• purchaser is not engaged in Florida, in any employment, trade, business, or profession in which the aircraft will be used in Florida; and, represents a corporation which has no officer or director who is a resident of, or makes his or her permanent place of abode in Florida; and represents an artificial entity other than a corporation which has no individual vested with authority to participate in the management, direction, or control of the affairs of the entity who is a resident of, or makes his or her permanent place of abode in Florida.

2) Purchaser agrees to provide the Department within 90 days of purchase, written proof that the aircraft was licensed, registered, or documented outside Florida. 

3) Purchaser agrees to provide the Department within 30 days of the aircraft departing Florida invoices for fuel, tie-down charges, or hangar charges issued by out-of-state vendors or suppliers, or other documentary evidence specifically identifying the aircraft, including the FAA registration number. 

4) Purchaser indicates that its reason for claiming the exemption under Section 212.05(1)(a)2., F.S., from Florida sales and use tax on the aircraft purchase is the:

i) Aircraft will be removed from Florida within 10 days of purchase; or 

ii) Aircraft is being repaired or altered and will be removed within 20 days after the completion of the repairs or alterations.

The purchaser, whether a natural person or a corporation, limited liability company, partnership, joint adventure, association, syndicate, business trust, trust, estate, or other form of artificial entity, must not be engaged in Florida in any employment, trade, business, or profession in which the aircraft will be used. The purchaser, if a corporation, cannot have an officer or director who is a resident of, or makes his or her permanent place of abode in, Florida. The purchaser, if an artificial entity other than a corporation, must have no individual vested with authority to participate in the management, direction, or control of the affairs of the entity who is a resident of, or makes his or her permanent place of abode in, Florida. Artificial entities other than corporations include, but are not limited to partnerships, joint adventures, associations, syndicates, limited liability companies, business trusts, trusts, and estates. See Rule 12A-1.007(10)(b), F.A.C. 

In the present case, Taxpayer purchased aircraft XXXX from a registered Florida dealer on XXXX 2020. On XXXX 2021, Taxpayer submitted a copy of the executed affidavit. The affidavit stated that Taxpayer is not a Florida resident and is not engaged in the carrying on in Florida of any employment, trade, business, or profession in which the aircraft will be used in Florida. Taxpayer also provided documentation demonstrating that the aircraft was removed from Florida within the established timeframes, as follows:

• Within 90 days of purchase, Taxpayer submitted copies of the U.S. Department of Transportation Federal Aviation Administration (FAA) - Aircraft Bill of Sale; XXXX Certificate of Registration; Federal Aviation Administration (FAA) - Certificate of Aircraft Registration, as written proof that the aircraft was licensed, registered, or documented outside Florida.
• Within 30 days after removing the aircraft from Florida, Taxpayer furnished invoices for fuel, tie-down charges, or hangaring charges from out-of-state vendors, specifically identifying the aircraft, to demonstrate the timely removal of the aircraft. 
• Within ten (10) days of purchase, Taxpayer provided documentation demonstrating that the aircraft was removed from Florida.

In accordance with s. 212.05(1)(a)2., F.S., and Rule 12A-1.007(10), F.A.C., Taxpayer has satisfied the requirements to establish that its purchase of aircraft XXXX is exempt from Florida sales tax.

Aircraft Temporarily in Florida 

Section 212.08(7)(fff), F.S., provides an exemption for aircraft that is temporarily used in Florida. An aircraft owned by a nonresident is exempt from use tax when the aircraft enters and remains in this state for less than a total of 21 days during the 6-month period after the date of purchase. The temporary use of the aircraft and subsequent removal from Florida can be demonstrated by invoices for fuel, tie-down, or hangar charges issued by out-of-state vendors or suppliers or similar documentation that clearly and specifically identifies the aircraft. This exemption is in addition to the exemption provided in s. 212.05(1)(a)2., F.S., discussed above.

Here, Taxpayer, a resident of XXXX, has provided documentation listed on page two of this advisement, which included flight records demonstrating that during the first six (6) months after purchase (XXXX 2020, through XXXX 2021), aircraft XXXX was present in Florida fewer than a total of 21 days. 

Based on the facts and documentation provided, Taxpayer qualifies for the exemption provided under s. 212.08(7)(fff)1., F.S. As suggested by the reasoning in your request, s. 212.08(7)(fff)1., F.S., is in the nature of a “safe harbor” exemption from otherwise taxable “use” in Florida. Accordingly, the taxpayer is entitled to the rebuttable presumption provided in s. 212.06(8)(a), F.S. – that tangible personal property used in another state, U.S. territory, or the District of Columbia for six months or longer before being imported into Florida was not purchased for use in Florida.

CONCLUSION 

Taxpayer’s purchase of aircraft XXXX, which was delivered in Florida, removed and registered outside of Florida, qualifies for the exemption from sales tax, pursuant to s. 212.05(1)(a)2., F.S. Additionally, pursuant to s. 212.08(7)(fff)1., F.S., Taxpayer’s temporary use of aircraft XXXX in Florida during the period of XXXX 2020, through XXXX 2021, is exempt from use tax.

This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes, or judicial interpretations of the statutes or rules, upon which this advice is based, may subject similar future transactions to a different treatment than that expressed in this response.

You are further advised that this response, your request and related backup documents are public records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material, and this response, deleting names, addresses, and any other details which might lead to identification of the taxpayer. Your response should be received by the Department within 15 days of the date of this letter.

Shundra McClean 

Tax Conferee 

Technical Assistance and Dispute Resolution

^{(1) The documentation and information provided reflect different addresses for Taxpayer. The TAA request and copies of Taxpayer’s XXXX Driver’s License issued on XXXX, with an expiration date of XXXX and XXXX Voter Registration Card, signed on XXXX reflect an address of XXXX. However, the Aircraft Purchase Agreement and Aircraft Bill of Sale, reflect an address of XXXX.} 

^{(2) Taxpayer also mailed the documentation to the Department on XXXX 2021.}

^{(3) XXXX hangar lease invoice numbers: XXXX (dated XXXX 2020) and XXXX (dated XXXX 2020) are addressed to “XXXX” at XXXX.} 

^{(4) The invoice dated XXXX2021, reflects the vendor as XXXX, and is billed to XXXX.}

^{(5) It is well-settled law that exemptions are strictly construed against the Taxpayer, shifting the burden of proof for the exemption to the taxpayer. See State ex rel. Szabo Food Services, Inc. of N.C. v. Dickinson, 286 So.2d 529, 530-32 (Fla. 1973); Green v. City of Pensacola, 126 So.2d 566, 569 (Fla. 1961); State v. Thompson, 101 So.2d 381, 386 (Fla. 1958). Any doubt as to an exemption is resolved favorably towards the State. See Szabo Food Servs., 286 So.2d at 531; United States Gypsum Co. v. Green, 110 So.2d 409, 413 (Fla. 1959).}