200704937L




April 25, 2007

Subject: Repairs to Texas Aircraft.

Dear **************:

This is in response to your e-mail question concerning whether Texas use tax is 
due on the inspection and repair performed in Oklahoma on an aircraft hangared 
in Texas. 

Response: Generally, taxable items purchased outside of Texas that are brought, 
delivered or shipped into Texas for storage, use, or consumption in Texas 
within one year of their purchase are subject to Texas state and local use tax, 
unless otherwise exempt. See Rule 3.346, Use Tax.

The labor to repair, remodel or maintain an aircraft is not subject to Texas 
sales or use tax. Only the parts and/or materials used to repair, remodel or 
maintain an aircraft are subject to Texas sales and use tax. Whether Texas use 
tax is due on the parts and/or materials used to repair, remodel or maintain an 
aircraft located outside of Texas is determined by the type of contract 
(lump-sum or separated) the owner has with the repair person. See Rule 3.292, 
Repair, Remodeling, Maintenance, and Restoration of Tangible Personal Property.

A person remodeling, refurbishing or maintaining a private aircraft located 
outside of Texas under a separated contract (separated charges for parts and 
labor) is considered to be the seller of the parts and materials; therefore, 
the owner of a Texas hangared aircraft repaired, remodeled or maintained at a 
location outside of Texas owes Texas use tax on the separate price for the 
parts when the aircraft is brought back and hangared in Texas, unless otherwise 
exempt. 

On the other hand, if the repair, remodeling, refurbishing or maintenance is 
performed under a lump-sum contract (single price for both parts and labor), 
the repair, remodeling or maintenance performed on the aircraft is a 
non-taxable service for Texas sales and use tax purposes and the repair person 
is the consumer of all parts and materials used to repair, remodel or maintain 
the aircraft.  Thus, since the lump-sum repair, remodeling or maintenance of an 
aircraft is a non-taxable service, no Texas use tax is due when the aircraft is 
brought back and hangared in Texas.

Therefore, if the inspection and repair in Oklahoma was performed under a 
separated contract, your company must accrue and remit Texas use tax on all 
parts and materials purchased outside of Texas and brought into Texas, unless 
the parts and materials are otherwise exempt from Texas taxes. 

Also, as a member of the multistate compact, Texas allows credit against Texas 
use tax due for any legally imposed sales or use tax paid on the same taxable 
item by the same taxpayer to another state or any subdivision of another state. 
The taxpayer has the burden to show that both the sales tax was paid to the 
other state and the actual amount of the sales tax paid to the other state. See 
Texas Tax Code Section 151.303(c) and Rule 3.338 Multistate Tax Credits etc.

For online access to the sections of the Tax Code and rules noted above go to: 
www.window.state.tx.us/taxinfo/sales/index.html. Scroll down to either 
“Statutes” or "Rules" and click to open. 

This opinion is based on the facts presented. Other facts, though similar, may 
yield different results. I hope this information helps. If you have further 
questions, please e-mail them to tax.help@cpa.state.tx.us. You may also call me 
toll-free at 1-800-531-5441, extension 5 0613. 

Our goal is to provide you with prompt, professional service. Please take a 
moment to complete our on-line survey at 
http://aixtcp.cpa.state.tx.us/surveys/tpsurv2/index.html

Sincerely,


Ken Koch
Tax Policy Division




From: **************
Sent: Thursday, April 19, 2007 8:37 AM
To: Tax Help
Subject: Oklahoma repairs

Can you please answer a use tax question for me:

If we take our airplane to Oklahoma for Inspections and Repair, do we have to 
pay Use tax since our Airplane is hangered in Texas?  I have read the rules on 
Labor being non-taxable, and the different rules on Parts and Consumables, 
etc.; but need confirmation on the fact that the repair shop is in Oklahoma.

Thanks in advance for your help.


**************




ACCESSION NUMBER: 200704937L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 04/25/2007
TAX TYPE: SALES