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Favorable New York Guidance on Sales and Use Tax Exemption for Noncommercial Aircraft

On July 24, 2015, the New York Department of Taxation and Finance published guidance on the sales and use tax exemption for “general aviation aircraft,” effective September 1, 2015.  N.Y. Dep’t of Taxation & Finance, TSB-M-15(3)S (July 24, 2015).  The exemption, to be added as subsection (a)(21-a) of section 1115 of the Tax Law, exempts from sales and use tax “general aviation aircraft, and machinery or equipment to be installed on such aircraft.”  Previously, such sales and uses were fully taxable.

“General aviation aircraft” is defined broadly as aircraft used in civil aviation, except for commercial or military aircraft or “an unmanned aerial vehicle or drone.”  With respect to “general aviation aircraft,” the ruling states receipts from the following items are tax-exempt:

  • Aircraft itself
  • Property affixed to aircraft for its equipping, including furniture, fixtures, built-in appliances, window coverings, climate control systems or entertainment systems
  • Property that the aircraft has at the time of its sale that is necessary for its operation, such as avionics, radios, weather radar systems, and navigation and emergency lighting

Similarly, receipts from machinery and equipment installed on a general aviation aircraft after its purchase and necessary for equipping and normal operation are also tax-exempt.

However, receipts from the following items (termed “accessories”) are not exempt with respect to a general aviation aircraft:

  • Items of décor (paintings or other artwork)
  • Tableware, glassware or cookware
  • Small appliances
  • Linens, pillows, or towels
  • Other ancillary property

Regarding timing, the exemption applies generally to sales or uses occurring on or after September 1, 2015.  For the transition period, the exemption applies to sales made prior to September 1 if the purchaser takes delivery on or after that date, and applies to leases entered into before September 1 to the extent of the lease term beyond that date.

© 2020 McDermott Will & EmeryNational Law Review, Volume V, Number 210


About this Author


Jane Wells May is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm's Chicago office.  Jane heads the Firm’s State & Local Tax Practice Group.  She focuses her practice on state and local tax matters.

 McDermott Will Emery Law Firm, Lauren A. Ferrante, Tax Attorney

Lauren A. Ferrante is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. She focuses her practice on state and local taxation. Lauren represents taxpayers at all stages of state and local controversy disputes, at the audit, administrative, and judicial levels. She also assists taxpayers with planning, transactional, and compliance matters with respect to various state and local taxes, including income and franchise taxes, sales and use taxes, gross receipts taxes, and other miscellaneous taxes.

Lauren regularly speaks on state and local tax matters and has authored publications on nexus, procedure, and state tax false claims act issues.