Ezel / Tax Rulings / CA

Did use tax apply when four aircraft co-owners sold a fractional interest to a fifth person?

Short answer Yes. Assuming the original owners held the aircraft as tenants in common, the fifth person purchased an interest in tangible personal property and owed use tax measured by the amount paid for that interest.
State
CA
Ruling
Annotation 540.0280
Tax type
Sales and Use Tax
Issued
1966-09-16
Issued by
California State Board of Equalization
Requested by
Aircraft co-owners asking about a fifth person's buy-in (identity redacted)
Topics
aircraft fractional interests tenants in common ownership transfer use tax
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1966. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1966
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a California State Board of Equalization Tax Counsel letter dated September 16, 1966, published by CDTFA as support for a sales and use tax annotation. It assumes four individuals owned an aircraft as tenants in common and transferred a fractional interest to a fifth buyer after paying use tax on their original purchase. Another taxpayer should not treat this brief staff opinion as binding and should check current aircraft, co-ownership, tenant-in-common, fractional-interest, title-transfer, registration, sales-tax, and use-tax rules. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Four individuals purchased an aircraft and paid use tax. A fifth individual later wanted to buy into the aircraft ownership.

Assuming the four owners held the aircraft as tenants in common and transferred an interest to the fifth person, the letter treated the transaction as a purchase of tangible personal property.

Use tax applied to the fifth buyer, measured by the amount paid for the fractional aircraft interest.

Citations and references

  • The source letter cites no statute or regulation by number.

Source

Original ruling text

540.0280

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
September 16, 1966

Dear ______,
It appears from your letter of September 7, 1966, that four individuals purchased an aircraft and paid use tax on the purchase. Subsequently, a fifth individual desires to “buy in” on the aircraft. We shall assume that the four individuals are tenants in common of the aircraft and will transfer an interest therein to the fifth party. In our opinion, this is a purchase by the fifth party of an interest in tangible personal property, i.e., an airplane, and that the use tax applies and is measured by the amount paid for the interest purchased. Very truly yours,

E. H. Stetson
Tax Counsel

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