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DEPARTMENT OF STATE REVENUE

Information Bulletin #74
Sales Tax
May 2012
(Replaces Bulletin #74 Dated September 2007)


DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is not consistent with the law, regulations, or court decisions is not binding on either the Department or the taxpayer. Therefore, the information provided herein should serve only as a foundation for further investigation and study of the current law and procedures related to the subject matter covered herein.

SUBJECT: Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured

DIGEST OF CHANGES: Extends the exemption to completion work on an aircraft and exempts materials, parts, equipment, and engines installed on a foreign aircraft weighing more than 5,000 pounds and that is equipped with a turboprop or turbojet engine.


EFFECTIVE DATE: January 1, 2009 (Retroactive)

INTRODUCTION

P.L. 211-2007 was passed by the Indiana General Assembly effective July 1, 2007, to provide a sales and use tax exemption for aircraft brought into Indiana to be repaired, refurbished, or remanufactured or for a prepurchase evaluation. Effective January 1, 2009, the exemption applies to aircraft brought to Indiana for completion work.

Exemption from Use Tax

IC 6-2.5-3-2 provides an exemption from the use tax for an aircraft that meets the following requirements:
1. The aircraft is titled, registered, or based in another state or country;
2. The aircraft is delivered to Indiana by or for a nonresident owner or purchaser of the aircraft;
3. The aircraft is delivered to Indiana for the sole purpose of being repaired, being refurbished, being remanufactured, have completion work performed, or is subject to a prepurchase evaluation; and
4. Within 30 days after completion of the repair, refurbishment, remanufacture, or prepurchase evaluation, the aircraft is transported to a destination outside Indiana.

Exemption from Sales Tax

IC 6-2.5-5-42 provides that a transaction involving an aircraft including completion work performed is exempt from the sales tax if:
1. The purchaser is a nonresident;
2. The purchaser transports the aircraft to a destination outside Indiana within 30 days after:
A. Accepting delivery of the aircraft;
B. A repair, refurbishment, or remanufacture of the aircraft is completed, if the aircraft remains in Indiana after the purchaser accepts delivery for the purpose of accomplishing the repair, refurbishment, or remanufacture of the aircraft; or
C. Accepting delivery of the aircraft following completion work or a prepurchase evaluation.
3. The aircraft will be:
A. Titled or registered in another state or country; or
B. Based in another state or country, if the state or country does not require a title or registration for aircraft; and
4. The aircraft will not be titled or registered in Indiana.

Within 60 days after a purchaser accepts delivery of an aircraft and claims an exemption for an aircraft to be registered outside Indiana, the purchaser shall provide the seller with a copy of the purchaser's title or registration of the aircraft outside Indiana.

Within 60 days after a repair, refurbishment, or completion or remanufacture of the aircraft is completed, and if the aircraft remains in Indiana after the purchaser accepts delivery of the aircraft for the purpose of accomplishing the repair, refurbishment, or completion or remanufacture of the aircraft, the purchaser shall provide the seller with a copy of the purchaser's title or registration of the aircraft outside Indiana.

IC 6-2.5-5-46, effective July 1, 2012, provides a sales tax exemption for parts, materials, equipment, and engines used, consumed, or installed in the repair, maintenance, refurbishing, remodeling, or remanufacturing of an aircraft or an avionics system of an aircraft that is registered in a foreign country and has a minimum landing weight of at least 5,000 pounds or is equipped with a turboprop or turbojet power plant. The exemption applies only if the work is performed by a retail merchant who possesses a valid repair station certificate issued by the Federal Aviation Administration.

This exemption does not apply to an aircraft registered in the United States that weighs less than 5,000 pounds or is not equipped with a turboprop or turbojet power plant.
________________________________
John Eckart
Commissioner

Posted: 05/30/2012 by Legislative Services Agency

DIN: 20120530-IR-045120254NRA
Composed: Jul 14,2014 6:41:55AM EDT
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