Which aircraft-fuel tax receipts did RR 97-12 treat as the tax on aviation gasoline credited to South Carolina's Aviation Fund?

Plain-English summary

South Carolina Revenue Ruling 97-12 interpreted the phrase "the tax on aviation gasoline" for deposits to the State Aviation Fund.

The ruling said the tax meant South Carolina sales and use taxes. For the 1997 rule, aviation gasoline meant gasoline manufactured exclusively for airplane use and meeting the aviation-gasoline specifications in the cited ASTM manual.

Tax collected on jet fuel was not credited to the Aviation Fund because the ruling treated turbine fuel as different from aviation gasoline. Tax on ordinary automotive gasoline used in an airplane also was not credited because that gasoline was not manufactured exclusively for aircraft.

RR 05-3 later modified RR 97-12 after the statutory definition was expanded. The later ruling included qualifying civil aviation turbine fuels meeting ASTM D 1655 when sold for airplane use.

Taxability versus fund credit

RR 97-12 addressed which receipts belonged in the State Aviation Fund. It separately noted that fuel sold to transportation companies could qualify for the cited exemption, while jet fuel sold to others was subject to sales and use tax. Gasoline used in aircraft was not exempt under the provision quoted in the ruling.

Common questions

Q: What tax did RR 97-12 identify? South Carolina sales and use taxes.

Q: Did jet fuel count as aviation gasoline under the 1997 ruling? No. The ruling treated jet fuel as a different product and did not credit its tax receipts to the Aviation Fund.

Q: Did using automotive gasoline in an airplane make it aviation gasoline? No. The ruling focused on whether the gasoline was manufactured exclusively for airplane use.

Q: Is that jet-fuel conclusion current? Not as stated. RR 05-3 expressly modified RR 97-12 after the statutory definition expanded to include qualifying aviation jet fuel.

Citations and references

• S.C. Code Ann. §§ 55-5-20(12) and 55-5-280 (aviation-gasoline definition and State Aviation Fund)
• S.C. Code Ann. §§ 12-36-2120(9)(d) and 12-36-2120(15)(a) (fuel exemptions and aircraft gasoline)
• S.C. Code Ann. § 12-28-710(16) (motor-fuel provision cited)
• SC Revenue Ruling #05-3 (expressly modified RR 97-12): https://dor.sc.gov/sites/dor/files/policies/RR05-3.pdf
• ASTM aviation-gasoline specifications quoted by RR 97-12

Subject

Aviation Gasoline

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR97-12.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING # 97-12

SUBJECT:

Aviation Gasoline
(Sales and Use)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 55-5-280
S. C. Code Ann. Section 12-36-2120(9)(d)
S. C. Code Ann. Section 12-36-2120(15)(a)
S. C. Code Ann. Section 55-5-20(12)
S. C. Code Ann. Section 12-28-710(16)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure #94-1

SCOPE:

A Revenue Ruling is the Department of Revenue's official advisory
opinion of how laws administered by the Department are to be applied to
a specific issue or a specific set of facts, and is provided as guidance for
all persons or a particular group. It is valid and remains in effect until
superseded or modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue Procedure.

Question(s):
Code Section 55-5-280 provides that “the tax on aviation gasoline” is to be credited to the State
Aviation Fund. The following questions have arisen concerning the phrase “the tax on aviation
gasoline”:

1. What is “the tax” referred to in the phrase?
2. What is “aviation gasoline”?
3. Is the tax on jet fuel and motor vehicle gasoline used in airplanes to be credited to the
   State Aviation Fund?
   Conclusion(s):
4. “The tax[es]” on aviation gasoline are the sales and use taxes.
   1

2. “Aviation gasoline” is gasoline which meets the specifications contained in the “Manual
on Significant Tests for Petroleum Products: 5th Edition” published by the American
Society of Testing and Materials (“ASTM Manual”).

3. The sales and use taxes imposed on sales of jet fuel and motor vehicle gasoline used in
   airplanes are not to be credited to the State Aviation Fund.
   Facts:
   Code Section 55-5-280 reads:
   All moneys received from licensing of airports, landing fields or air schools, the
   tax on aviation gasoline and fees for other licenses issued under this chapter shall
   be paid into the State Treasury and credited to the fund known as the ‘State
   aviation fund.” (Emphasis added.)
   Code Section 55-5-290 provides that the moneys in the State Aviation Fund are to be used for
   the necessary expenses of the Aeronautics Division of the Department of Commerce.
   The purpose of this document is to address questions that have arisen concerning the phrase “the
   tax on aviation gasoline.”
   Discussion:
   We will first determine the type of tax referred to in Code Section 55-5-280.
   Effective July 1, 1955, the gasoline tax law was amended by adding the following language:
   Gasoline sold or dispensed for use in aircraft shall not be subject to the now
   existing gasoline tax, but shall be subject to the retail sales and use tax.
   At the same time, the sales and use tax law was amended by adding the current language which
   specifically states that gasoline used in aircraft is not exempt from the sales and use taxes.
   Therefore, “the tax[es]” referred to in Section 55-5-280 are the sales and use taxes. There are no
   other state taxes imposed on gasoline used in aircraft.
   As for the meaning of the term “aviation gasoline,” Section 55-5-20(12) of The Uniform State
   Aeronautical Regulatory Law defines “aviation gasoline” as “gasoline manufactured exclusively
   for use in airplanes and sold for such purposes.” For a more complete definition of the term, we
   look to the “Manual on Significant Tests for Petroleum Products: 5th Edition,” which is
   published by the American Society of Testing and Materials (“ASTM”). This manual contains
   the excepted standards for fuels, as well as other products, and is used by the South Carolina
   Department of Agriculture’s Laboratory Division to ensure that fuels sold and used in South
   Carolina are in compliance with state regulations.
   2

Chapter 5 of the ASTM Manual contains the specifications for aviation gasoline. Those
gasolines which meet the specifications contained therein are, for purposes of Section 55-520(12), “aviation gasoline.” They are “manufactured exclusively for use in airplanes and sold
for such purposes.”
We will now address whether the sales and use taxes imposed on sales of jet fuel and automotive
gasoline used in airplanes are to be credited to the State Aviation Fund.
There are two sections in the sales and use tax law pertinent this issue - Section 12-362120(9)(d) and Section 12-36-2120(15)(a). Section 12-36-2120(9)(d) provides an exemption for
“...fuel sold to...transportation companies for the generation of motive power for transportation”
and Section 12-36-2120(15)(a) provides that “gasoline used in aircraft is not exempt from the
sales and use tax.” We will address the issue concerning jet fuel and automotive gasoline, in
light of these sections.
As for jet fuel, Chapter 5 of the ASTM Manual contains information and specifications for
“aviation turbine fuels” (i.e. “jet fuels”). As stated in the Manual, “aircraft gas-turbine engines
require a fuel with quite different properties from those for aviation gasoline.” In other words, jet
fuel is not aviation gasoline; therefore, the tax on sales of jet fuel is not to be credited to the State
Aviation Fund. NOTE: Section 12-36-2120(9)(d) exempts sales of fuel to transportation
companies. Therefore, sales of jet fuel to other than transportation companies are subject to the
sales and use taxes.
Lastly, we consider automotive gasoline. As stated in Section 12-36-2120(15)(a), sales of
gasoline used in airplanes are taxable. Even though most gasoline used in aircraft today is
“aviation gasoline,” as defined in the ASTM Manual, some aircraft still use automotive gasoline.
Because automotive gasoline is not manufactured exclusively for use in airplanes - it may also
be used in motor vehicles - the sales and use taxes on sales of automotive gasoline used in
airplanes is not to be credited to the State Aviation Fund.
NOTE: For answers to technical questions concerning the specifications in the ASTM Manual
for aviation gasoline, jet fuel and automotive gasoline, please contact:
Mr. Terry Wessinger, Chemist I
South Carolina Department of Agriculture - Petroleum Lab
(803) 737-9700
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank III, Director
Columbia, South Carolina
September 13
, 1997
3