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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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105.0000 Aircraft—Regulation 1593
Annotation 105.0070
105.0070 Common Carrier Use. Taxpayer purchased a helicopter at a location outside California from a helicopter dealer. Taxpayer was a licensed pilot for fixed wing aircraft, and a student pilot for helicopters. Taxpayer and a flight instructor flew the aircraft to California. Taxpayer did not possess a commercial pilot license for helicopters at any time within the next twelve months (test period). The aircraft was leased to a firm, a licensed Part 135 carrier, which used the helicopter to take aerial surveying photos. The firm also subleased it to a television station involved in aerial camera filming of the Olympic Games. There were other uses of the helicopter that were not specifically identified.
Under common carrier provision, Part 135 of Title 14 of the Code of Federal Regulations, a Part 135 operator must comply with all rules of Part 135 (14 CFR 135.3(a)). Rules include that only authorized pilots are allowed to fly the aircraft and a log must be maintained of all use of the aircraft.
Based on the information available, less than 50 percent of the helicopter's "operational" usage constitutes common carriage hours. The aerial surveying flights are specifically excluded from Part 135 operations (14 FAR Part 135.1(b)(4)(iii)). The use of the helicopter for television production, (broadcasting the Olympics) was a subrental since the ultimate control of the helicopter and pilot during flights was under the sublessee. Also, any use made of the helicopter while taxpayer was the pilot does not qualify since he did not have a commercial license to pilot the aircraft. Therefore, tax applies to the purchase price of the helicopter since it was not used more than 50 percent of the time in common carrier operation during the first 12 month test period. 1/13/94.