Can a student training for a pilot certificate or the next level of flight rating (instrument, commercial, multi-engine, airline transport, etc.) claim a Texas sales tax exemption on aircraft rentals used for training, including solo flights?

Plain-English summary

This letter explains a Texas sales tax exemption for renting aircraft while training for a pilot certificate or the next level of flight rating — a private certificate, instrument rating, commercial rating, multi-engine rating, or airline transport pilot rating. It was issued while the Comptroller was working with the Aircraft Owners and Pilots Association to implement legislative changes and revise Rule 3.297 (on carriers) to reflect them, so it reflects updated policy rather than older rules.

A student enrolled in an FAA-approved program can claim the exemption when renting aircraft for flight training — and that includes solo flights, as long as the solo flight is approved by an appropriately rated flight instructor, evidenced by a written endorsement in the student's logbook. One instructor endorsement can cover a whole series of solo flights, not just a single flight.

To actually claim the exemption, the student's exemption certificate must include specific identifying information: either the name and address of the flight school the student is enrolled in, or — if the student isn't enrolled in a school — the name and address of their primary flight instructor. On top of that certificate, the student must separately keep evidence that they're actively pursuing a flight rating: a logbook endorsement for simulator training, receipts and scores from tests administered by the school or instructor, or an instructor's endorsement documented in both the student's and instructor's flight logbooks. Without that evidence on hand, tax becomes due on the aircraft rentals even if an exemption certificate was submitted.

What this means for you

Student pilots renting aircraft for training

You can claim a sales tax exemption on your training aircraft rentals — including solo flights signed off by your instructor — but you need both a properly completed exemption certificate (naming your school or instructor) and separate documentary evidence that you're actually working toward a rating. Keep your logbook, test scores, and instructor endorsements on file.

Flight schools and instructors renting aircraft to students

Make sure your exemption certificates from students include the required identifying information (school name/address, or instructor name/address if the student isn't enrolled in a school), and encourage students to maintain logbook documentation — if a student can't later produce evidence of pursuing a rating, the rental could become taxable.

Accountants and tax professionals

This letter reflects a specific point-in-time policy update (tied to then-pending revisions to Rule 3.297) — worth checking the current version of Rule 3.297 for any further changes since 1998, since the letter itself flags that the underlying rule was being actively revised.

Common questions

Q: Can a student pilot rent an aircraft tax-free while training for a certificate or rating?
A: Yes, if enrolled in an FAA-approved program, including for instructor-approved solo flights evidenced by a logbook endorsement.

Q: What has to be on the student's exemption certificate?
A: Either the flight school's name and address, or — if not enrolled in a school — the student's primary flight instructor's name and address.

Q: Is the exemption certificate enough by itself?
A: No — the student must also separately maintain evidence of actively pursuing a flight rating (logbook endorsements, test receipts/scores, or instructor endorsements), or tax will be due on the rentals.

Q: Can I rely on this letter for my own flight training arrangement today?
A: No. This opinion is rendered based on the facts presented in 1998 (during an active revision of Rule 3.297), and additional or different facts may change the result; it binds the Comptroller only as to the taxpayer it was issued to. Check the current version of Rule 3.297 for any subsequent changes.

Citations and references

• 34 Tex. Admin. Code Rule 3.297 (carriers; being revised at the time of this letter to reflect flight-training exemption changes)

Subject

Aircraft — Flight Training Schools — Students Or Person Training For Pilot Certificate Or Flight Rating — Definition And Guidelines For Exemption

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9802160L

Original ruling text

February 25, 1998

Dear ***:

Thank you for your recent letter concerning the taxability of the rental of
aircraft by persons who are training for a private certificate or for the next
level of pilot certificate such as instrument, commercial, multi-engine, or
airline transport pilot.

We have been working with representatives of the Aircraft Owners and Pilots
Association in the process of implementing legislative changes in this area and
are in the process of revising Rule 3.297 on carriers to reflect those changes.
The answers below reflect those changes.

A student enrolled in an FAA-approved program may claim a tax exemption when
renting aircraft for flight training, including solo flights that are approved
(as evidenced by written endorsement in the student's logbook) by an
appropriately rated flight instructor. An instructor's endorsement may cover a
series of flights.

The student must include the following information when completing an exemption
certificate claiming sales tax exemption:

• The student must identify the flight school (name and address), or
• If the student is not enrolled in a flight school, the student must list his
  or her primary flight instructor with the instructor's address.

The student must maintain evidence that he or she is in pursuit of flight
rating. Evidence may include a logbook endorsement for simulator training,
receipts and scores for tests administered by a flight school or instructor, or
an instructor's endorsement as documented in the student's and instructor's
flight logbook. Without evidence that the student is in pursuit of flight
rating, tax will be due on aircraft rentals.

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

You may call me toll free at 1-800-531-5441, ext. 3-4680. The direct line is
512/463-4680. You may also write to Tax Policy, Comptroller of Public
Accounts. The email address is .

Sincerely,

Al Van Allen
Tax Policy Division