A. GENERAL INFORMATION
1. Sales of new and used airplanes are
subject to sales or use tax. If gross receipts, sales, compensating (use) or
other similar tax has been legally paid by the taxpayer to another state, then
the taxpayer is entitled to credit for that tax. The taxpayer shall provide
sufficient proof of such tax payment before credit is allowed.
2. If the total gross receipts or gross
proceeds for the sale of new or used aircraft is less than $2,000.00, then
sales or use tax is not due.
B. DEFINITIONS
The term "gross receipts" or "gross proceeds" means the total
amount of consideration for the sale of the airplane whether the consideration
is in money or otherwise, without any deduction therefor on account of the cost
of the property sold, labor service performed, interest paid by the retailer,
losses or any expenses whatsoever. The term "gross receipts" or "gross
proceeds" includes the value of any property taken in lieu of or in addition to
money as consideration for a sale.
C. CALCULATION OF TAX DUE
If the seller takes used aircraft in trade as credit or part
payment of a sale of a new or used aircraft, tax shall be paid on the
difference between the total gross receipts or gross proceeds for the aircraft
sold and credit given for the traded-in aircraft. No trade-in credit will be
allowed if an item other than a used aircraft is taken in trade.
D. SALES TAX REPORTS
Every seller of an airplane is required to obtain a sales tax
permit and to collect tax from the purchaser. The seller is to report the sale
as any other taxpayer subject to the Arkansas Gross Receipts Tax laws. The
seller is to provide the Commissioner with the following information along with
the seller's regular sales tax report:
1. Purchaser's name and address.
2. Make, model, serial number and gross sales
price of each aircraft sold.
3.
Make, model, serial number and value assigned to any aircraft taken in trade as
part payment on the sale of a new or used aircraft.
4. Amount of state and local tax collected
from the purchaser.
5. Copies of
invoices, sales tickets or bills of sale concerning each aircraft sold and
taken in trade. (If the invoice, sales ticket or bill of sale contains the
information required by ale must accompany the sales tax report.)
E. RECORDS
The seller shall retain records reflecting the total gross
receipts or gross proceeds and description of each aircraft sold along with the
value and description of each aircraft taken in trade. If the seller's records
are inadequate or incomplete, the Commissioner may utilize any of the following
for purposes of determining sales tax liability:
1. Affidavit signed by the seller and
purchaser attesting to the sales price or trade-in value of the
aircraft.
2. Aircraft valuation
schedules prepared by the Assessment Coordination Division of the Arkansas
Public Service Commission.
3. Any
national trade publication generally accepted by aircraft dealers as accurately
reflecting current aircraft market value.
4. The higher of two appraisals prepared by
other aircraft dealers.
F. AIRCRAFT RENTAL
1. Any person engaged in the business of
selling aircraft in Arkansas who holds aircraft for resale in stock, may rent
or use the aircraft in a charter service operated by that person for a period
of one year from the date of purchase of the aircraft without remitting the tax
on the aircraft so used. When the aircraft is eventually sold, however, the tax
must be remitted at the time of sale. If the aircraft is sold within the one
year period, the tax shall be computed on the actual sale price of such
aircraft or the price paid for the aircraft by the seller, whichever is
greater. If a year passes and the rented or chartered aircraft has not been
sold, then the tax must be remitted by the person engaged in the business of
selling aircraft in Arkansas on his purchase price.
2. If an aircraft is rented by an aircraft
charter service with a pilot's service included, the rental of aircraft and
pilot service is a non-taxable service. If the aircraft alone is rented for a
period of less than 3 0 days, then the sales tax and the 1% short term rental
tax must be collected on the rental charge. If the aircraft alone is rented for
3 0 days or more, then the tax must be collected and remitted upon the rental
charges unless the Arkansas tax was paid on the purchase price of the
aircraft.
G. NEWLY
MANUFACTURED AIRCRAFT
On and after June 17, 1981, the gross receipts or gross
proceeds derived from the sale of new aircraft manufactured or substantially
completed within the State of Arkansas shall not be subject to the gross
receipts tax when sold by the manufacturer or substantial completer to a
purchaser for use exclusively outside this state notwithstanding the fact that
possession may be taken in this state for the sole power of removing the
aircraft from this state under its own power.
H. EFFECTIVE DATES
For purposes of determining whether a sale occurred before the
effective date of Act 3 of 1991, the date on the bill of sale, contract, or
other documents provided by the taxpayer controls.
