Ezel / Tax Rulings / TX
TX 8501L0609E06 Sales and/or Use Tax (State,Local,MTA) 1985-01-14

Which aircraft sales, rentals, repairs, charters, instruction, and support services were taxable in Texas?

Short answer: Aircraft sales to individuals, rentals, parts, and supplies were taxable. Repairs, charters, pilot services, flight instruction, hangaring, preheating, and washing were not taxable.

Apply this to your situation

This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller gave an aircraft business a transaction-by-transaction sales-tax matrix:

  • Aircraft sales to individuals were taxable, while a dealer could give a resale certificate instead of paying tax.
  • Labor and repairs on the business's aircraft or customers' aircraft were not taxable.
  • Aircraft chartering, pilot services, and flight instruction were not taxable.
  • Renting aircraft to others was taxable.
  • Sales of miscellaneous parts and supplies to the public were taxable.
  • Overnight hangaring, engine preheating, and washing of customers' aircraft were not taxable.

The letter directed the taxpayer to Comptroller Rule 3.297 for aircraft sales.

What this means for you

Aircraft dealers and rental businesses

The Comptroller distinguished taxable aircraft sales and rentals from nontaxable charters and pilot services. Dealer resale certificates applied to purchases for resale.

Maintenance and fixed-base operators

Under this 1985 letter, repair labor and the listed support services—hangaring, engine preheating, and washing—were not taxable, while parts and supplies sold to the public were taxable.

Flight schools and pilots

Flight instruction and pilot services on other parties' aircraft were not taxable on the facts presented.

Common questions

Q: Were aircraft repairs taxable?
A: No. The letter says labor and repair on company-owned and customer-owned aircraft were not taxable.

Q: Was renting an aircraft taxable?
A: Yes.

Q: Was chartering an aircraft taxable?
A: No, according to the letter.

Q: Were aircraft parts taxable?
A: Yes, when miscellaneous parts and supplies were sold to the public.

Q: Could a dealer buy an aircraft for resale without paying tax?
A: The letter says the seller could accept a resale certificate from a dealer in lieu of tax.

Citations and references

  • Comptroller Rule 3.297 (cited by the letter for aircraft sales)

Source

Original ruling text

January 14, 1985

Dear ***:

Thank you for your recent letter which I have restated below.

We understand that you provide brochures and other information
regarding the proper interpretation of the sales tax regulations.
We would like to receive the information that is applicable to our
business. We are involved in aircraft sales, service, charter,
instruction, and rental.

Therefore, we are particularly interested in the regulations
affecting:

  1. Aircraft sales to individuals and dealers.

Response: Sales to individuals are taxable. You may accept a resale
certificate from a dealer in lieu of tax. I am enclosing several rules
which should be helpful. Specifically, please see Rule 3.297.

  1. Labor and repair to aircraft owned by our company and to aircraft
    belonging to other parties.

Response: Not taxable.

  1. Aircraft chartering.

Response: Not taxable.

  1. Providing pilot service on aircraft belonging to other parties.

Response: Not taxable.

  1. Flight instruction provided in our own aircraft and in aircraft
    belonging to other parties.

Response: Not taxable

  1. Renting our aircraft to others.

Response: Taxable.

  1. Selling miscellaneous parts and supplies to the public.

Response: Taxable.

  1. Providing miscellaneous services to aircraft belonging to
    other parties, such as hangaring overnight, engine preheating,
    and washing.

Response: Not taxable.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

You may write me at the Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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