This page contains a Flash digital edition of a book.
FEA TURE

Clearing the Air on the Taxability of Aircraft Equipment

By Brent. A. Auberry

Many states tax personal property, but they exempt aircraft or subject aircraft to an excise tax in lieu of personal property. And equipment installed into aircraft may be exempt from a state’s sales and use tax. But when is equipment taxable, and when does it escape tax? The answer is – it de- pends on the facts and the law at issue. In Indiana, the State’s property tax ap- peal agency recently ruled that assessors might not tax as personal property med- ical equipment that is affixed to and be- comes part of a helicopter. In Key Equipment Finance, Inc. v Vanderburgh County Assessor (Oct. 19, 2009), the In- diana Board of Tax Review held that the interior of a medical evacuation helicopter retrofitted with equipment was a perma- nent part of the aircraft and was not tax- able as personal property. Personal property is generally considered to include all types of machinery and equipment. The air transport company had stripped the Bell Helicopter’s interior and retrofit- ted it to allow the treatment of patients in flight, including the addition of special flooring for patient stretchers, oxygen sys- tems, medical pumps and monitors, as well as radios and satellite phones for communication with hospitals. All of the disputed medical equipment became a permanent part of the aircraft. Without it, the helicopter was no longer a medical air- craft. The Board concluded that the equipment was an integral part of the he- licopter and was not separate, taxable per- sonal property.

The Oregon Tax Court applied a similar

An MD520N practices refilling its bucket during a training exercise prior to the fire season. photo: MD Helicopters

22 ROTORCRAFT PROFESSIONAL • March 2010 Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52
Produced with Yudu - www.yudu.com