Sales Tax Exemptions In Other Midwest States

Minnesota joins other Midwest states in exempting sales tax on aircraft parts and associated installation labor.

Wisconsin currently has an interstate commercial operations exemption. Interstate commercial operations, although a bit vague, refers to airline travel, though in some instances it can apply to Part 135, as well. Part 135 operations pertain to commuter and on-demand air operations.

Iowa currently exempts Part 135 operations. There may be an ongoing effort to expand this, however, to include parts and labor on all aircraft.

Illinois exempts “rolling stock,” and has a partial exemption for Class IV Part 145 stations. Rolling stock is a term only used in Illinois and gets its background from rail. But in terms of aviation, rolling stock status can be claimed by anyone using their aircraft for interstate operations in furtherance of commerce. There is some nuance that it does not apply to only commercial air travel, but can also apply to anyone conducting business in their aircraft, as opposed to solely transporting goods or people. However, an aircraft needs to be used 50% or more in rolling stock to claim this exemption. Class IV refers to the highest class of FAA Part 145 repair station licensing.

Michigan exempts out-of-state aircraft, only.

Indiana exempts all aircraft parts and labor, as does Kansas, Ohio and Missouri (through 2015). Nebraska exempts commercial air carriers and aircraft based out-of-state.

Neither North Dakota nor South Dakota have exemptions on parts and labor, but they do not charge sales tax on aviation fuel.

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This entry was posted in Columns, Columns, October/November 2013, Products & Services and tagged , . Bookmark the permalink.

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