Ezel / Tax Rulings / TX
TX 8804L0873G11 Sales and/or Use Tax (State,Local,MTA) 1988-04-06

Did out-of-state testing prevent Texas tax on aircraft components installed before the customer took possession of the aircraft in Texas?

Short answer: No. Texas tax was due on the components because the customer took possession of the aircraft in Texas, even though the aircraft then went out of state for required testing.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 1988 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Its conclusion depended on the customer taking possession of the aircraft in Texas before out-of-state testing; verify current aircraft-sale sourcing and exemption law before applying it today. Letters on STAR can support detrimental reliance only for the taxpayer directly issued the letter and may no longer represent current policy. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional.
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

A seller installed components on a customer's general-aviation aircraft in Texas. Some components required testing that the seller could not perform, so the customer's crew took the aircraft to an out-of-state facility for testing and release to normal use.

The Comptroller said Texas tax was due on the components because the customer took possession of the aircraft in Texas. The later out-of-state testing did not change that result.

What this means for you

Under this 1988 letter, the location where the customer received possession controlled the stated sales-tax result. The need for additional testing outside Texas did not move the component sale out of Texas.

Common questions

Were the installed components taxable? Yes.

Why? The customer took possession of the aircraft in Texas.

Did required out-of-state testing prevent Texas tax? No.

Citations and references

The letter defined a sale as the transfer of title or possession of tangible personal property for consideration but did not cite a statute or rule number.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS

STATE OF TEXAS

AUSTIN, 78774

BOB BULLOCK

Comptroller

April 6, 1988

Dear ***:

Thank you for your recent letter regarding taxability of the sale and installation of components to a customer's general aviation aircraft.

You stated that some of the components installed required testing that you were unable to perform because of lack of equipment. The customer's crew took the aircraft to an out-of-state facility where the required testing was performed and the aircraft was released for normal use.

A sale is defined as the transfer of title or possession of tangible personal property for consideration. Texas tax is due on the components since the customer took possession of the aircraft in Texas.

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

If you have any questions or need more information, please call our toll-free number 1-800-531-5441. The regular number is 512/463-4600. You may write me at the Tax Policy Division.

Sincerely

(Mrs.) Jo Ann Dieck

Tax Policy Division

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