Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 220. Aircraft Sales and Use Tax
5/22/2024

23VAC10-220-40. Exemptions.

The aircraft sales and use tax does not apply to sales to or use by the United States or any of the governmental agencies thereof, the Commonwealth of Virginia or any political subdivisions thereof, or any airline operating in intrastate, interstate or foreign commerce as a common carrier providing scheduled air service on a continuing basis to one or more Virginia airports.

1. For sales to the United States, the Commonwealth of Virginia or any political subdivision to be exempt from the tax, the purchases must be pursuant to required official purchase orders to be paid for out of public funds. Sales to governmental employees for their own use are taxable. If pursuant to an official purchase order, the tax will not apply to sales to or use by officers' clubs, noncommissioned officers' clubs, officers' messes, noncommissioned officers' messes, and post exchanges organized, operated and controlled under Department of Defense Regulations. The exemption does not cover individuals or organizations operating on a military reservation in their own right. No person is relieved from liability for payment of, collection of, or accounting for the tax on the ground that the sale or use occurred in whole or in part within a federal area.

2. For purposes of this section, the phrase "use by" relates to the exempt use in this state of any aircraft purchased without this state. It has no application in cases where the renter, lessee, or other user is a governmental agency since in such cases the tax is levied on the dealer's use in his leasing, charter or other business.

3. For purposes of this section, the phrase "scheduled air service" means service provided by a single air carrier consisting of regularly scheduled flights to one or more Virginia airports at least five days per week.

4. An aircraft owned and used by an airline only in its operations as a common carrier in intrastate, interstate or foreign commerce is exempt from Virginia aircraft sales and use tax.

a. For purposes of this exemption, an aircraft acquired under a leasing or rental agreement constituting a "sale" as defined in 23VAC10-220-5 shall be deemed to be owned by the lessee.

b. For purposes of this exemption, the sale price or value of an aircraft owned by an airline and used in non-exempt intrastate operations as a contract carrier as well as exempt operations will be apportioned on the basis of such use.

Note: The exemptions of this section do not apply with respect to rentals or leases not qualified as sales, or charters, in the case of a dealer who pays a gross receipts tax under the dealer exclusion, as the gross receipts tax is levied on the dealer and not upon the renter, lessee, or other user.

Statutory Authority

§§ 58.1-203, 58.1-609.1(5) and 58.1-1505 of the Code of Virginia.

Historical Notes

Derived from VR630-11-1505, eff. January 1, 1985, with retroactive effect according to § 58.1-203 of the Code of Virginia.

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