Was a $25 introductory airplane flight taxable as instruction or as an amusement service?

Plain-English summary

The requester offered a $25 "Intro Flight" to promote flight lessons. The Comptroller distinguished genuine instruction from an amusement ride.

An introductory dual flight conducted as part of an actual course under FAA regulations in 14 C.F.R. Part 61 or Part 141 was not a taxable service or amusement. The provider had to keep adequate records showing that the flight was actual instruction.

A piloted flight that did not transport the customer to another location and was instead taken for the enjoyment of flying or sightseeing was a taxable amusement service under Rule 3.298(a)(1)(F)(iv), comparable to a helicopter or balloon ride. The letter also said an aircraft bought for Part 61 instruction or for noninstructional flights was not exempt from sales tax.

What this means for you

The $25 label did not decide taxability. The result depended on whether the flight was part of a documented FAA-regulated instruction course or simply an experience ride that returned the customer without transportation to another destination.

The provider needed records supporting instructional status. Without that factual foundation, the letter treated the nontransportation flight as taxable amusement.

Common questions

Was an actual introductory flight lesson taxable? No, if it was part of a Part 61 or Part 141 course and adequately documented.

Was a sightseeing or enjoyment flight taxable? Yes.

Why was the sightseeing flight not transportation? The customer was not transported to another location.

Was the aircraft itself exempt because it was used for instruction? No. The letter said aircraft used for Part 61 instruction or noninstructional flights were not exempt from sales tax.

Citations and references

• 14 C.F.R. Part 61 — FAA flight-instruction framework identified in the letter.
• 14 C.F.R. Part 141 — FAA pilot-school framework identified in the letter.
• 34 Tex. Admin. Code Rule 3.298(a)(1)(F)(iv) — amusement services.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9107L1122E12

Original ruling text

July 30, 1991

Dear **:

Thank you for your recent letter concerning an "Intro Flight" your
company provides to promote flight lessons.

Introductory dual flights that are part of an actual flight
instruction course are not taxable services or amusements. An
actual flight instruction course means the course is conducted
under Federal Aviation Administration Regulation, 14 Code of
Federal Regulations, Part 61 or under Part 141. You must keep
adequate records to substantiate the flights are actually flight
instruction.

Non-instructional flights with a pilot that do not transport the
person or persons to another location are taxable amusement
services. The person or persons are paying for the enjoyment of
riding in a plane and for sight seeing. This is similar to
helicopter rides or balloon rides which are taxable amusement
services. See section (a)(1)(F)(iv) of the enclosed Rule 3.298 on
amusement services. It is not considered a transportation service
because the person is not being transported to another location.

If the "Intro Flight" is a flight conducted as part of an actual
flight instruction course, the $25 fee is not taxable. If the
"Intro Flight" is non-instructional, you are correct in collecting
sales tax on the service. Also, an aircraft purchased for use in
Part 61 flight instruction or for non-instructional flights is not
exempt from sales tax.

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

You may call me toll free at 1-800-252-5555, ext. 3-3690. The
Austin number is 512/463-3690. You may also write to Tax
Administration at the above address.

Sincerely,

David Somerville
Tax Administration Division