Airport fixed base operators do business in a number of ways.
In addition to making sales of new and used aircraft, charter service is
available, in some instances aircraft are available for lease or rental or
flight instruction, and gasoline, lubricating oils and greases and repair
services are generally sold.
Only aircraft purchased for resale or rental may be purchased
tax free as for resale.
When an aircraft is withdrawn for use primarily in flight
instruction or charter service a tax is due measured by the reasonable and fair
market value (purchase price) of the aircraft and a tax is also due when the
aircraft is subsequently sold.
Conversely, when an aircraft purchased for resale is regularly
demonstrated for that purpose and also used for charter, instruction, or for
the private use of the owner, the tax may be paid on the value of the aircraft
(purchase price), or the tax base may be arrived at by multiplying the actual
number of flight hours by fifty percent (50%) of the posted hourly solo rental
rate. By electing to pay a tax on the value of the aircraft withdrawn for
demonstration purposes a person may reduce his tax liability on a replacement
demonstrator up to the amount realized on the sale of the used
demonstrator.
In general, the following would be for application:
1. Sales. All sales of new and used aircraft
are subject to the tax when delivered to customers in South Carolina. When
aircraft are purchased for use outside this State the tax likewise applies
unless the seller, as a condition of the sale, delivers the aircraft to
customers at points outside this State. The most acceptable proof of
transportation outside the state would be a trip ticket signed by the seller's
delivery agent and showing also the signature and address of the person outside
this State who received the delivered aircraft.
2. Rental of aircraft. Proceeds derived from
lease or rental of aircraft are subject to the tax.
3. Flight instruction. Receipts from courses
of instruction given by base operators to students seeking private, commercial,
instrument and/or instructor's licenses are not subject to the sales tax.
Included in such exempt services are receipts from dual and solo flights which
are a part of a course of instruction.
4. Charter service. No tax is due on charges
made for charter service. Additionally, no tax would be due on withdrawals of
aircraft for use in charter flights originating and terminating in states other
than South Carolina.
5. Sales of
gasoline for use in aircraft are subject to the tax.
6. Sales of lubricating oils and greases are
subject to the tax. Charges made for lubricating services are not taxable, the
tax being paid on the value of the lubricant or grease used in furnishing this
service.
7. Repair service.
a. No tax is due on the purchase or
withdrawal of parts used to repair or recondition aircraft for sale. Likewise,
no tax is due on repairs by a person electing to report use on the basis of
flight hours.
b. No tax is due on
parts withdrawn for use in replacing parts under written warranty contracts
given without charge to the purchaser at the time of original purchase,
provided the tax was paid on the sale of the part found to be defective or on
the sale of the property of which the defective part was a component, and
provided no charge for labor or materials is made to the warrantee.
c. All other proceeds derived from the sale
of repair parts and service are subject to the tax; provided, however, that
where a separation is made between the sale of the parts and the sale of the
service, the tax is due only on the sale of the repair parts. The invoice to
the customer must show this separation.
8. Rental of hanger or tie space. No
tax.