Ezel / Tax Rulings / TX
TX 9103L1089A14 Sales and/or Use Tax (State,Local,MTA) 1991-03-14

Did the occasional-sale exemption cover a Texas manufacturer selling an aircraft used for employee transportation and charter activity?

Short answer: No. Texas said the aircraft was a general-business-purpose asset, and the manufacturer was not selling the business's entire operating assets.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A Texas-nexus manufacturer used an aircraft to transport employees and also chartered it to certified carriers. It planned to sell the aircraft to a Texas resident and asked for occasional-sale treatment.

The Comptroller denied the exemption because the aircraft was used for general business purposes and the manufacturer was not selling the business's entire operating assets.

What this means for you

Selling one general business asset did not become an exempt occasional sale merely because the seller was not ordinarily in the aircraft business.

Common questions

Was the aircraft sale exempt? No.

Why not? The aircraft was a general business asset and the entire operating assets were not being sold.

Did the manufacturer use the aircraft only internally? No; it also chartered the plane to certified carriers.

Citations and references

The letter did not cite a statute or rule.

Source

Original ruling text

March 14, 1991

Dear ***:

Thank you for your recent letter questioning the application of the occasional
sale provisions to your client's fact situation. The facts are restated with
response below.

  • Client is a manufacturer with nexus in Texas.
  • They own an aircraft which they use to transport employees.
  • They also charter the plane to certified carriers.
  • They have accurate records of income and expenses attributable to the
    aircraft.
  • They plan to sell the aircraft to a Texas resident and ask if the sale will
    be exempt as an occasional sale.

Response: The transaction will not be exempt as an occasional sale because the
asset (aircraft) is used for general business purposes and the client is not
selling the entire operating assets of the business.

This opinion is based on the facts you presented. Other facts, though similar,
may yield different results.

If you have questions or need more information, please call our toll-free
number 1-800-531-5441. My direct line number is 512-463-4680 [FAX (512)
475-0900]. You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

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