§ 6-2.5-5-8.2 — Aircraft acquired for rental or leasing in the ordinary course of the person's business; determination of the exemption; rental threshold

Indiana § 6-2.5-5-8.2

• Jurisdiction: Indiana
• Art. 2.5: STATE GROSS RETAIL AND USE TAXES
• Ch. 5: Exempt Transactions of Retail Merchant

Text

2. (a) Except as provided in subsection (f), a
transaction in which a person acquires an aircraft for rental or leasing
in the ordinary course of the person's business is not exempt from the
state gross retail tax unless the person establishes, under guidelines
adopted by the department in the manner provided in IC 4-22-2, that
the annual amount of the gross lease revenue derived from leasing or
rental of the aircraft, which may include revenue from related party
transactions, is equal to or greater than seven and five-tenths percent
(7.5%) of the:
(1) book value of the aircraft, as published in the VREF Aircraft
Value Reference guide for the aircraft; or
(2) net acquisition price for the aircraft, which shall include the
value of any trade or exchange and excluding any sales
commissions paid to third parties.
(b) If a person acquires an aircraft below the VREF Aircraft Value
Reference guide book value as set forth in subsection (a)(1), the person
may appeal to the department for a lower lease or rental threshold equal
to the actual acquisition price paid if the person demonstrates that the
transaction was completed in a commercially reasonable manner based
on the aircraft's age, condition, and equipment.
(c) For purposes of this section, the department may request the
person to submit to the department supporting documents showing that
the aircraft is available for general public lease or rental, copies of
business and aircraft insurance policies, and other documents that
assist the department in determining if an aircraft is exempt from the
state gross retail tax.
(d) A person is required to meet the requirements of subsection (a)
until the earlier of the date the aircraft has generated sales tax on leases
or rental income that is equal to the amount of the original sales tax
exemption, the elapse of thirteen (13) years, or the date the aircraft is
sold. No additional sales or use tax is due from the seller on the seller's
original purchase when the aircraft is sold if the person has met the
terms of this section for all periods prior to the sale.
(e) A person is required to remit the gross retail tax on taxable lease
and rental transactions the entire time the aircraft is used for lease and
rental, even if the aircraft is used for lease and rental beyond a thirteen
(13) year period.
(f) A transaction in which a person acquires an aircraft to rent or
lease the aircraft to another person for predominant use in public
transportation (as provided for in section 27 of this chapter) by the
other person or by an affiliate of the other person is exempt from the
state gross retail tax. The department may not require a person to meet
the revenue threshold in subsection (a) with respect to the person's
leasing or rental of the aircraft to receive or maintain the exemption. To
maintain the exemption provided under this subsection, the department
may require the person to submit annual reports showing that the
aircraft is predominantly used to provide public transportation.
(g) The exemptions allowed under subsections (a) and (f) apply
regardless of the relationship, if any, between the person or lessor and
the lessee or renter of the aircraft.

Legislative History

As added by P.L.137-2022, SEC.23. Amended by P.L.93-2024, SEC.53.