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Ezel / Tax Rulings / TX
TX 8712L0852E12 Sales and/or Use Tax (State,Local,MTA) 1987-12-30

Did an aircraft lessor's sale qualify as an occasional sale, and was additional tax due after rental taxes already exceeded purchase tax?

Short answer: Yes, on the stated facts. The aircraft sale qualified as an occasional sale, and no additional tax was due because tax collected and paid on rental or lease charges exceeded the tax that would have applied to the aircraft purchase.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a taxpayer-specific December 1987 Texas Comptroller letter. It says the opinion may change if the facts differ. STAR expressly alerts that, effective September 1, 2015, related-entity aircraft sales, rentals, and leases are governed by Tax Code Chapter 163 rather than Chapter 151 under S.B. 1396. The historical result depends on an occasional-sale qualification and prior rental tax exceeding hypothetical purchase tax. Aircraft, related-entity, occasional-sale, resale, lease, rental-tax, and credit rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

Company A's sale of the aircraft to Company B qualified as an occasional sale under Section 151.304(a) and (b)(2).

No additional sales or use tax was due under Section 151.055(a) because Company A had already collected and paid more tax on aircraft rental or lease charges than would have been due if it had not acquired the aircraft for resale.

What this means for you

The historical no-additional-tax result depended on both the occasional-sale facts and the amount of rental or lease tax already paid.

Common questions

Did the sale qualify as occasional? Yes.

Was additional tax due? No, under the stated prior-tax comparison.

Citations and references

  • Tex. Tax Code § 151.304(a), (b)(2) — historical occasional-sale exemption.
  • Tex. Tax Code § 151.055(a) — tax previously collected on rental or lease charges.
  • Tex. Tax Code ch. 163 and S.B. 1396, 84th Legislature — 2015 related-entity aircraft alert on STAR.

Source

Original ruling text

Alert: Effective 9/01/2015, sales, rental or leasing of aircraft between related entities are now governed by Chapter 163 (instead of Chapter 151) of the Tax Code. S.B 1396, 84th Reg. Legislative Session.

December 30, 1987

Dear ***:

I have been asked to respond to your request dated December 23, 1987, for a
written ruling by Mona Shoemate regarding an exemption from sales tax on the
sale of an aircraft by way of an occasional sale.

Based on the facts presented in your letter, Company A's sale of the aircraft
to Company B, will qualify as an occasional sale pursuant to Tex. Tax Code Sec.
151.304(a) and (b)(2). No additional sales and use tax would be due pursuant
to Tex. Tax Code Sec. 151.055(a), because Company A has collected and paid to
the state an amount of sales tax on rental or lease charges in excess of the
amount of sales tax that would have been due if Company A had not acquired the
aircraft at a sale for resale.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call our toll-free
number 1-800-531-5441. The regular number is 512/463-4600. You may write me at
the Tax Policy Division.

Sincerely,

Julie Pesl
Tax Policy Division

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