Were engines, parts, and equipment bought for later Florida installation on fixed-wing aircraft over 15,000 pounds exempt from sales tax?

Plain-English summary

The Florida Department of Revenue concluded that replacement engines, parts, and equipment bought for repair or maintenance of fixed-wing aircraft over 15,000 pounds were exempt when installed on qualifying aircraft in Florida.

The seller did not have to perform the installation, and purchase and installation did not have to occur in one transaction or immediately. Because the taxpayers owned multiple aircraft and maintained parts inventory, they were to provide Form DR-97 identifying the intended qualifying use rather than listing one aircraft registration number for each purchase.

If an item bought tax-free was later used for a nonexempt purpose, the purchaser had to accrue and remit use tax on its purchase price.

What this means for you

Aircraft fleet managers

Inventory purchases can qualify before installation, but keep use records connecting the part to an eligible aircraft and Florida installation.

Parts dealers

Retain the required aircraft-use documentation; the exemption did not depend on your performing the installation.

Common questions

Q: Did installation have to occur at the time of sale?
A: No.

Q: Did the selling dealer have to install the part?
A: No.

Q: What if the item was later used for a nonexempt purpose?
A: The purchaser owed use tax on the purchase price.

Citations and references

• Fla. Stat. §§ 212.08(7)(rr) and 213.22
• Fla. Admin. Code r. 12A-1.038(5)(d)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12A-026

Original ruling text

Interim Executive Director
Marshall Stranburg

SUMMARY
QUESTION: Whether parts sold in Florida for use in the repair and maintenance of aircraft
with a maximum certified takeoff weight in excess of 15,000 pounds are exempt from sales and
use tax if the parts are installed in Florida at a time subsequent to the sale. If such parts are
exempt, whether the issuance of a Purchaser’s Blanket Exemption Certificate substantially in the
form of the example provided in Rule 12A-1.038, F.A.C., is the appropriate proof of exemption
at the point of sale.
ANSWER: Taxpayers’ purchases of replacement engines, parts, and equipment used in the
repair or maintenance of fixed-wing aircraft of more than 15,000 pounds are exempt from
Florida sales and use tax as long as such engines, parts, and equipment are installed on aircraft in
Florida. The exemption under s. 212.08(7)(rr), F.S. (2011), does not require that the vendor
selling the replacement engine, parts, and/or equipment perform the installation thereof.
Moreover, the exemption does not require that the parts be installed immediately, or as part of a
single transaction with the purchase of the replacement engine, parts, and/or accessories.
Dealers who sell replacement engines, parts, and equipment for installation on fixed-wing
aircraft that qualify for the exemption in s. 212.08(7)(rr), F.S., are required to simply document
the FAA Registration Number (i.e., “N number”) on the bill of sale, invoice, or other tangible
evidence of the sale. However, since Taxpayers own multiple aircraft and keep an inventory of
parts, Taxpayers should provide Form DR-97 and indicate that the exemption is based on the
purchased properties’ uses as replacement engines, parts, and equipment used in the repair or
maintenance of aircraft with a maximum certified takeoff weight of more than 15,000 pounds, as
provided in s. 212.08(7)(rr), F.S. In the event that items purchased tax-exempt are subsequently
used for a nonexempt purpose, use tax based on the purchase price of the item should be accrued
and remitted to the Department.

November 19, 2012
XXX
XXX
XXX
Re:

Technical Assistance Advisement 12A-026
Sales and Use Tax – Aircraft Parts & Equipment
Section 212.08(7)(rr), Florida Statutes [F.S.]
Rule 12A-1.038, Florida Administrative Code [F.A.C.]
Petitioners: XXX and XXX [“Taxpayers” or “Taxpayer”]
Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Tony Powell, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
Dear
This letter is a response to your petition dated August 16, 2012, for the Department’s issuance of
a Technical Assistance Advisement [“TAA”] concerning the above referenced petition and
matter. Your petition has been carefully examined and the Department finds it to be in
compliance with the requisite criteria set forth in Chapter 12-11, F.A.C.. This response to your
request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.
FACTS

Taxpayers are program managers XXX. As such, they perform flight related and aircraft
management services XXX. Taxpayers are responsible for aircraft management services such as
maintaining program aircraft to Federal Aviation Administration specifications.
Taxpayers purchase parts in Florida from XXX [“Supplier”], and other Florida vendors, for the
repair and maintenance of aircraft in Florida. The parts are purchased and stored at the XXX
[“the Airport”]. Installation of the aircraft parts generally occurs at the Airport; however, repair
and maintenance work may occur at the Airport or other locations within Florida by road crews
employed by Supplier, or other vendors. When maintenance is performed at the Airport, aircraft
parts may be removed from Taxpayer-owned inventory or inventory sold by Supplier to
Taxpayer for installation by Supplier.
REQUESTED ADVISEMENTS

1. Whether parts sold in Florida for use in the repair and maintenance of aircraft with a
   maximum certified takeoff weight in excess of 15,000 pounds are exempt from sales and
   use tax if the parts are installed in Florida at a time subsequent to the sale.
2. Whether the issuance of a Purchaser’s Blanket Exemption Certificate substantially in the
   form of the example provided in Rule 12A-1.038, F.A.C., is the appropriate proof of
   exemption at the point of sale.
   TAXPAYER’S POSITION
   Taxpayers assert that their purchase and use of parts for the repair or maintenance of aircraft
   meeting the weight criteria under s. 212.08(7)(rr), F.S., are exempt from Florida tax when those
   parts are purchased from either the Florida vendor performing the repair or maintenance work or
   the vendor that sold the parts to Taxpayers for installation in Florida by another dealer.
   LAW & DISCUSSION
   Section 212.08(7)(rr), F.S. (2011), provides that there shall be exempt from sales tax replacement
   engines, parts, and equipment used in the repair or maintenance of aircraft of more than 15,000
   pounds maximum certified takeoff weight, and of rotary wing aircraft of more than 10,300
   pounds maximum certified takeoff weight, when such parts or equipment are installed on these
   aircraft that are being repaired or maintained in Florida.

Technical Assistance Advisement
Page 3
Taxpayers’ purchases of replacement engines, parts, and equipment used in the repair or
maintenance of fixed-wing aircraft of more than 15,000 pounds are exempt from Florida sales
and use tax as long as such engines, parts, and equipment are installed on aircraft in Florida. The
exemption under s. 212.08(7)(rr), F.S. (2011), does not require that the vendor selling the
replacement engine, parts, and/or equipment perform the installation thereof. Moreover, the
exemption does not require that the parts be installed immediately, or as part of a single
transaction with the purchase of the replacement engine, parts, and/or accessories.
Effective January 1, 2013, the exemption for replacement engines, parts, equipment, and labor 1
used in or for the maintenance or repair of fixed wing aircraft will be expanded to include
aircraft that exceed 2,000 pounds in maximum certified takeoff weight.
Dealers who sell replacement engines, parts, and equipment for installation on fixed-wing
aircraft that qualify for the exemption in s. 212.08(7)(rr), F.S., are required to simply document
the FAA Registration Number (i.e., “N number”) on the bill of sale, invoice, or other tangible
evidence of the sale. However, in the case of Taxpayers, who own multiple aircraft and keep an
inventory of parts, identifying the N number of the aircraft whereon a purchased part will be
installed may not be feasible at the time of purchase.
Accordingly, Taxpayers should issue exemption certificates, respectively, to their vendors using
the language suggested in Rule 12A-1.038(5)(d), F.A.C., when purchasing parts for subsequent
installation to aircraft repaired and maintained in Florida. The suggested language in Rule 12A1.038(5)(d), F.A.C., has been promulgated as Suggested Format for Blanket Exemption
Certificate Based on Property’s Use (Form DR-97). Taxpayers should provide Form DR-97 and
indicate that the exemption is based on the purchased properties’ uses as replacement engines,
parts, and equipment used in the repair or maintenance of aircraft with a maximum certified
takeoff weight of more than 15,000 pounds, as provided in s. 212.08(7)(rr), F.S. In the event that
items purchased tax-exempt are subsequently used for a nonexempt purpose, use tax based on
the purchase price of the item should be accrued and remitted to the Department.
CONCLUSION
Aircraft parts sold in Florida for use in the repair and maintenance of aircraft with a maximum
certified takeoff weight in excess of 15,000 pounds are exempt from sales and use tax if the parts
are installed in Florida at a time subsequent to the sale. Issuance of Form DR-97 is the
appropriate proof of exemption at the point of sale.
This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which
is binding on the Department only under the facts and circumstances described in the request for
this advice, as specified in Section 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above.
You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the statutes or rules upon which this
advice is based may subject similar future transactions to a different treatment than expressed in
this response.
1

The exemption from tax of labor charges for the repair and maintenance of aircraft is provided under s.
212.08(7)(ee), F.S.

Technical Assistance Advisement
Page 4
You are further advised that this response, your request, and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of Section 213.22, F.S. Confidential information must be deleted before public disclosure. In an
effort to protect confidentiality, we request you provide the undersigned with an edited copy of
your request for Technical Assistance Advisement, the backup material, and this response,
deleting names, addresses, and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department within 10 days of the date of this
letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850) 717-7670.
Sincerely,

Ryan Marlar, CPA
Tax Law Specialist
Technical Assistance & Dispute Resolution
Record ID: 130448