Did crop-dusting qualify as common-carrier use because the aircraft carried treatment material from a loading point to the fields?

Plain-English summary

California said an aircraft did not need to operate under Federal Aviation Regulations Part 135 to qualify for the state common-carrier exemption. It still had to be used as a common carrier under state or federal authority, transport people or property for compensation, offer the carriage indiscriminately to the public or a segment of it, and operate within its FAA certificate.

Carrying firefighters or firefighting supplies from one point to another could qualify when the other requirements were met. Carrying water and dropping it on a fire did not; the purpose was firefighting service rather than transportation.

Crop-dusting followed the same distinction. Although the aircraft carried treatment material from its loading point to the field, its purpose was the agricultural service of applying that material, not transporting property for compensation. The flight therefore did not qualify as common-carrier use.

What this means for you

Agricultural aircraft operators

Moving the applied material through the air did not make the application mission a transportation service.

Aircraft owners and tax professionals

Analyze the flight's actual purpose, compensation, public offering, route, FAA authority, and whether people or goods are delivered rather than used in performing another service.

Common questions

Q: Was crop-dusting common-carrier use?

A: No.

Q: Did carrying dusting material count as transporting property?

A: No, because the flight's purpose was agricultural application.

Q: Was Part 135 operation mandatory for the exemption?

A: No, but the other common-carrier and governmental-authority requirements still applied.

Q: Could firefighting flights qualify?

A: Point-to-point carriage of firefighters or supplies could; dropping water on a fire was a service flight.

Citations and references

• California Revenue and Taxation Code §§ 6366 and 6366.1
• California Sales and Use Tax Regulation 1593

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.0955
• Original supporting opinion: 515.0955 PDF

Original ruling text

State of California

Memorandum

To:

Mr. J. W. Cornelius
Supervisor, Petition Section

From:

David H. Levine
Senior Tax Counsel

Subject:

Common Carrier Exemption

Board of Equalization

515.0955

May 14, 1991

ATSS 485-5550
(916) 445-5550

In a memorandum dated April 16, 1991, I responded to your inquiry regarding the application of the common carrier exemptions provided by section 6366 and 6366.1 and Regulation 1593. It has now come to my attention that the subject of your inquiry was also the subject of much wrangling a number of years ago, and I believe that some further discussion in the context of my April 26 memorandum is appropriate. I assume that you were not aware of the previous opinions on this issue since, had you been, you would have so advised us. In your inquiry, you noted that, with the exception of ferry flights made in connection with an otherwise qualifying common carriage flight, it had been the policy of the Petition Section to grant or deny claims for common carrier exemption using the guidelines established pursuant to FAR Part 135.1. In my memorandum, I concluded that operating pursuant to Part 135 was not a requirement for the exemption from California Sales or Use Tax. Rather, I concluded that: the aircraft must be used as a common carrier; and that use must be under the authority of this state or under the authority of the United States. This was the main focus of my memorandum and remains the applicable rule. Your inquiry was specifically in the context of firefighting flights and external load operations. Since the main focus of my memorandum was to clarify that an aircraft operated pursuant to some Part other than 135 could still qualify for the common carrier exemption, my reference to the firefighting flights and external load operations will qualify as common carrier sue provided: the flight transports persons or property for compensation; are offered indiscriminately to the public or to some portion of the public; and the flights are authorized by the person’s FAA certificate. Again, these conclusions remain applicable, but a bit mor discussion would have been helpful. When a person provides carriage for firefighters from Point A to Point B, that flight qualifies as a common carrier flight if meeting the other requirements. Similarly, if that person provides carriage of firefighting supplies picked up at Point A and delivered to Point B, that flight also qualifies as common carrier flight if meeting the other requirements. On the other hand, if that same

Mr. J. W. Cornelius

-2-

May 14, 1991
515.0955

person carries water in its aircraft from Point A and drops the water on a fire at Point B, we would not regard that flight as qualifying as a common carrier flight. That is, we do not regard such a flight as for the purpose of transporting persons or property for compensation but rather as a flight to provide the service of firefighting. The same analysis would apply, for example, to cropdusting. Even though the aircraft carries the dusting material from one point to the location of the fields, we do not regard such a flight as for the purpose of transporting property for compensation. Rather, we regard that flight as for the agricultural service of cropdusting. Such a flight does not qualify as a common carrier flight. If you have further questions on this subject, feel free to contact me.

DHL:cl

bc:

515.0955.doc

Mr. Donald J. Hennessy