Laws, Regulations and Annotations
Business Taxes Law Guide – Revision 2023
Sales And Use Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 4. Exemptions
Article 1. General Exemptions
6366.1. Aircraft leased to common carriers, foreign governments, and nonresidents. (a) There are exempted from the taxes imposed by this part, the gross receipts from the sale of and the storage, use, or other consumption in this state of aircraft which are leased, or are sold to persons for the purpose of leasing, to lessees using such aircraft as common carriers of persons or property under authority of the laws of this state, of the United States or any foreign government, or to any foreign government as lessees for use by such government outside the state, or to persons as lessees who are not residents of this state and who will not use such aircraft in this state otherwise than in the removal of such aircraft from this state.
(b) There are exempted from the taxes imposed by this part, the gross receipts from the sale of and the storage, use, or other consumption in this state of tangible personal property sold to an aircraft manufacturer and incorporated into aircraft to be leased by the manufacturer under conditions set forth in subdivision (a) of this section.
(c) With respect to aircraft leased, or sold for the purpose of leasing, on or after January 1, 1997, it shall be presumed that the aircraft is not regularly used in the business of transporting for hire property or persons if the lessor's yearly gross receipts from the lease of that aircraft to persons using the aircraft as common carriers of property or persons do not exceed 20 percent of the cost of the aircraft to the lessor, or fifty thousand dollars ($50,000), whichever is less. This presumption may be rebutted by contrary evidence satisfactory to the board showing that the aircraft is regularly used as a common carrier of property or persons.
In no event shall "gross receipts" include compensation by the lessor or related parties for use of the aircraft as a common carrier.
History—Added by Stats. 1964, p. 276 (First Extra Session), in effect August 22, 1964. Stats. 1965, p. 3450, in effect September 17, 1965, substituted "common" carriers for "certificated or licensed" carriers, deleted "in interstate or foreign commerce" and added "of this state." Stats. 1986, Ch. 1361, effective January 1, 1987, added a rebuttable presumption regarding an aircraft not regularly used in the business of transporting for hire. Stats. 2000, Ch. 923 (AB 2894), in effect January 1, 2001, substituted "With respect to … it shall be" for "For purposes of this section, it shall be rebuttably" before "presumed that", added "lessor's" after "persons if the", deleted "of the lessor" after "gross receipts", substituted "the" for "that" after "persons using", substituted "20" for "10" after "do not exceed", substituted "fifty thousand dollars ($50,000)" for "twenty-five thousand dollars ($25,000)" after "the lessor, or" and added the second sentence in subdivision (c).
Note.—Sec. 41, Stats. 1986, Ch. 1361 required that:
(a) On January 15, of each year from 1988 to 1992, inclusive, the State Board of Equalization and the Franchise Tax Board shall submit a report to the Legislature on implementation of the provisions of this act, with the exception of Section 40 of this act (for which separate reporting requirements are set out).
(b) The revenue and taxation policy committees of each house of the Legislature shall hold a public hearing no later than June 30 of each year from 1988 to 1992, inclusive, on the reports submitted pursuant to subdivision (a).
(c) The intent of this section is to assure the Legislature the opportunity to oversee the implementation of this act. The intent of the Legislature in enacting this act is to improve enforcement and voluntary compliance with the tax system and cash-pay reporting rules. The intent of the Legislature in enacting this act is not to cause harassment of or undue burden on innocent taxpayers.
Sec. 41 applies to the following Revenue and Taxation Code Sections: 6069, 6071, 6366, 6366.1, 6368.1, 6452, 6455, 6776, 6777, 7154, 8404, 9355, 30481, 32556, 40188, 41143, and 44186.
Tangible Personal Property Later Becoming Aircraft Parts.—Sales tax applies to sales of tangible personal property thereafter becoming component parts of aircraft which have already been sold, leased, or sold for the purpose of leasing, to persons using such aircraft as common carriers of persons or property. National Aircraft Leasing, Ltd. v. State Board of Equalization (1979) 90 Cal.App.3d 549.