23 Va. Admin. Code § 10-220-10

Current through Register Vol. 41, No. 8, December 2, 2024

Section 23VAC10-220-10 - Tax levied

A. Generally. The Virginia aircraft sales and use tax is imposed at the rate of 2.0% upon the retail sale of every aircraft sold in the Commonwealth and upon the nonexempt use in Virginia of any aircraft.

B. Tax rate application. The tax is to be collected by applying the 2.0% rate as follows:

1. Aircraft sold in Virginia. For aircraft sold in Virginia, the amount of tax is 2.0% of the sale price of the aircraft. The tax is levied on the date the application was required to be made to the Department of Aviation to obtain the license to operate the aircraft. See 23VAC10-220-50.

a. The Virginia aircraft sales tax applies to all aircraft sold and required to be licensed in Virginia, including occasional sales. "Occasional sale" means a sale of an aircraft by anyone not a dealer in aircraft. See 23VAC10-220-50 for information concerning payment of tax.

b. No tax is applicable to an aircraft that is not required to be licensed by the Department of Aviation.

Example 1: Individual A purchased a plane in Virginia on January 1, 1983, and applied for a license to operate the aircraft on the same day. The purchase price of the plane was $12,000. The tax is levied on the date of purchase and A must pay the Virginia aircraft sales tax of $240 based upon the sale price.

Example 2: Individual B purchased a plane in Virginia for $25,000 on January 1, 1982, and stored the plane for use in Virginia while she took flying lessons. B applied to the Department of Aviation for a license to operate the aircraft on September 1, 1982. The tax is levied September 1, 1982, on the original purchase price of $25,000.

Note: 23VAC10-220-50 requires the aircraft sales and use tax to be paid prior to the time the owner applies to the Department of Aviation for and obtains a license to operate the aircraft. 23VAC10-220-20 requires the tax to be based upon the current market value of the aircraft if first used or stored for use in Virginia six months or more after its acquisition. The current market value is not applicable in the case at hand because the plane qualified as an aircraft when purchased on January 1, 1982, and was first stored for use in this state on that date, even though the aircraft was not required to be licensed until nine months later.

Example 3: Individual C purchased a plane kit in Virginia on June 1, 1982. The kit is subject to the retail sales and use tax when purchased since the kit does not meet the definition of an aircraft at the time of purchase. When the kit is assembled, and qualifies as an aircraft, it is subject to the aircraft sales and use tax on the assembled cost. See 23VAC10-220-30 C.

2. Aircraft not sold in Virginia. For aircraft not sold in Virginia but required to be licensed for use in Virginia, the amount of tax is 2.0% of the sale price of the aircraft, wherever sold; however, if the aircraft is not sold in Virginia and is first required to be licensed in Virginia six months or more after its acquisition, the tax is imposed at 2.0% of the current market value of the aircraft if such current market value is less than the sale price of the aircraft including the cost of any modifications, improvements, or additions subsequent to initial acquisition. See 23VAC10-220-20.

a. The term "required to be licensed" as used in this section refers to the licensing provisions of Chapter 1 (§ 5.1-1 et seq.) of Title 5.1 of the Code of Virginia. Section 5.1-5 requires that before operating any aircraft, the owner must obtain from the Department of Aviation an aircraft license for such aircraft.

b. The term "current market value" as used in this section means an average value considering age, make, model, and included accessories in accordance with such publications or other data as are customarily employed in ascertaining the sale price of used aircraft.

c. The same transaction will not be subject to the tax more than once. However, each time a sale takes place, or an aircraft is brought into use in Virginia and required to be licensed, the new owner or new user in Virginia will be subject to the tax on the transaction.

d. The Virginia aircraft sales and use tax is not applicable to the use of any aircraft that is not required to be licensed by the Department of Aviation.

3. Aircraft leased, rented, or chartered. Dealers in aircraft as defined in 23VAC10-220-5 may elect to license for commercial use one or more aircraft held for lease, rental, charter, or other compensatory use, without payment of the Virginia aircraft sales and use tax based upon the sale price, subject to certain requirements and restrictions as regulated.

Any person who revokes his election immediately becomes liable for the Virginia aircraft sales and use tax as regulated in subdivisions 1 and 2 of this subsection.

C. Tax levy on lease or rental defined as sale. The Virginia aircraft sales tax is imposed upon the retail sale of an aircraft; however, the purchaser is responsible for payment of the tax. For purposes of a lease or rental defined as a sale under 23VAC10-220-5, the lessee or person renting the aircraft is deemed the purchaser of the aircraft and is responsible for payment of the applicable tax.

23 Va. Admin. Code § 10-220-10

Derived from VR630-11-1502, eff. January 1, 1985, with retroactive effect according to §58.1-203 of the Code of Virginia; Amended, Virginia Register Volume 33, Issue 10, eff. 3/27/2017.

Statutory Authority: § 58.1-203 of the Code of Virginia.