200811262H



STAR SUPERSEDED INFORMATION
Accession No.(s) - 200811262H
Supersede type - Complete  
Document superseded on - October 7, 2009
Issue(s) that caused the document to be superseded - agricultural use
of aircraft used for predator control
Reason(s) - Statutory change (SB 958, 81st Legislative session, effective
September 1, 2009).


SOAH DOCKET NO. 304-07-1917.26
CPA DOCKET NO. 48,076

RE: **************
TAXPAYER NO.: **************
AUDIT OFFICE: **************
AUDIT PERIOD: September 1, 2001 THROUGH September 30, 2001

Limited Sales, Excise & Use Tax/RDT

BEFORE THE COMPTROLLER 
OF PUBLIC ACCOUNTS 
OF THE STATE OF TEXAS

SUSAN COMBS
Texas Comptroller of Public Accounts

JOHN TRESNICKY
Representing Tax Division

**************
Representing Petitioner


COMPTROLLER’S DECISION

On April 24, 2007, the State Office of Administrative Hearings (SOAH) issued a 
Proposal for Decision in the above referenced matter.  The parties were given 
fifteen days from the date of the Decision to file exceptions with SOAH.  No 
exceptions were filed, and the Comptroller has determined that the 
Administrative Law Judge’s Proposal for Decision in this case should be adopted 
as written.  

The Texas Comptroller of Public Accounts (the Comptroller) assessed 
************** (Petitioner) for sales and use tax due on the purchase of a 
helicopter.  Petitioner contends the helicopter was exempt as machinery and 
equipment exclusively used on a farm or ranch in the production of agricultural 
products.  The Administrative Law Judge (ALJ) recommends that the tax 
assessment be upheld because the evidence submitted does not establish 
exclusive exempt agricultural use.

I.  PROCEDURAL HISTORY, JURISDICTION AND NOTICE

There are no disputed issues of notice and jurisdiction in this proceeding.  
Therefore, those  matters are set out in the Findings of Fact and Conclusions 
of Law without further discussion here.

Petitioner elected to have this case decided on the written submissions of the 
parties. Petitioner was represented by **************.  The Comptroller was 
represented by Assistant General Counsel Kaci J. Price.  The case was assigned 
to ALJ Alvin Stoll, who issued a scheduling order closing the record as of 
April 13, 2007.

II.  REASONS FOR DECISION

A. Evidence Presented

Comptroller Staff presented the Texas Notification of Exam Results, the tax, 
penalty, and interest computation work sheets, the Comptroller work manager 
comments,  the aircraft history for the helicopter, and a Comptroller aircraft 
questionnaire completed on behalf of Petitioner.

Petitioner submitted an Aerial Wildlife and Exotic Animal Management Permit 
issued by the Texas Parks and Wildlife Department.

B. Contentions of the Parties

Petitioner contends that the helicopter purchase was exempt as aircraft used 
exclusively for “cattle gathering, aerial depredating animals and predator 
control.”

Comptroller Staff takes the position that exemption must be denied because the 
helicopter was not exclusively used on a farm or ranch for production of 
agricultural products.  Staff cites Comptroller policy documents that state use 
of aircraft for predator control is not an exempt agricultural use.

C. Analysis and Recommendation

Helicopters and other aircraft are tangible personal property that are subject 
to the sales and use tax. [ENDNOTE: (1)]  Sales tax is therefore presumptively 
due unless an exemption is established by clear and convincing evidence. 
[ENDNOTE: (2)]  Statutory exemptions, as the antithesis of equality and 
uniformity, cannot be raised by implication and are subject to strict 
construction. [ENDNOTE: (3)]  Petitioners’ claim for exemption is based on 
Section 151.316 of the Tax Code [ENDNOTE: (4)], which exempts machinery and 
equipment exclusively used or employed on a farm or ranch in the production of 
food for human consumption or other agricultural products to be sold in the 
regular course of business.  Petitioner states that the helicopter is used 
exclusively for “cattle gathering, aerial depredating animals and predator 
control.” [ENDNOTE: (5)]  As supporting evidence, Petitioner submitted an 
Aerial Wildlife and Exotic Animal Management Permit issued by the Texas Parks 
and Wildlife Department.  The permit allows Petitioner to use the helicopter 
for the “administration or protection of land, water, wildlife, livestock, 
domesticated animals, human life or crops.” [ENDNOTE: (6)]

Petitioner states, and has submitted supporting documentation, that the 
helicopter was used at least part of the time for predator control.  However, 
under long-standing Comptroller policy, the use of aircraft for predator 
control is not an exempt agricultural use under Section 151.316. [ENDNOTE: (7)] 
A Comptroller policy that is a reasonable interpretation of the statute is 
entitled to deference. [ENDNOTE: (8)] Therefore, according to Petitioner’s own 
statement and evidence, the helicopter was used at least part of the time for 
predator control, a nonexempt use under Comptroller policy.  The helicopter 
therefore does not qualify as machinery or equipment exclusively used or 
employed on a farm or ranch in the production of food for human consumption or 
other agricultural products.

III.  FINDINGS OF FACT

1. ************** (Petitioner) purchased a ************** helicopter.

2. The Texas Comptroller of Public Accounts (the Comptroller) assessed sales 
and use tax against Petitioner based on the purchase price of the helicopter by 
Texas Notification of Audit Results dated February 3, 2006, 

3. Petitioner timely requested a redetermination hearing.

4. Petitioner obtained an Aerial Wildlife and Exotic Animal Management Permit 
from the Texas Parks and Wildlife Department for the helicopter. The permit 
authorized Petitioner to use the helicopter for “cattle gathering, aerial 
depredating animals and predator control.”

5. Petitioner’s use of the helicopter included  predator control.

6. Under long-standing Comptroller policy, aircraft used for predator control 
is not exempt as machinery and equipment exclusively used or employed on a farm 
or ranch in the production of food for human consumption or other agricultural 
products.

7. On February 22, 2007, Comptroller Staff sent a notice of hearing  to 
Claimant’s address of record.

8. The notice of hearing contained a statement of the time, place, and nature 
of the hearing; a statement of the legal authority and jurisdiction under which 
the hearing was to be held; a reference to the particular sections of the 
statutes and rules involved; and a short, plain statement of the matters 
asserted.

IV.  CONCLUSIONS OF LAW

1. The Comptroller has jurisdiction over this matter pursuant to TEX. TAX CODE 
ANN. ch. 111.

2. The State Office of Administrative Hearings has jurisdiction over matters 
related to this proceeding, including the authority to issue a proposal for 
decision, pursuant to TEX. GOV’T CODE ANN. ch. 2003.

3. The Comptroller provided proper and timely notice of the hearing pursuant to 
TEX. GOV’T CODE ANN. ch. 2003.

4. The Comptroller’s policy that use of aircraft for predator control is not an 
exempt agricultural use is a reasonable interpretation of the statute.

5. Petitioner has not met its burden of proof under 34 TEX. ADMIN. CODE 
1.40(2)(A) to prove by clear and convincing evidence that the helicopter was 
exclusively used for an agricultural use. 

6. The tax, penalty, and interest assessment should be upheld.


Hearing No. 48,076


ORDER OF THE COMPTROLLER

On April 24, 2007 the State Office of Administrative Hearings’ Administrative 
Law Judge (ALJ), Alvin Stoll, issued a Proposal for Decision in the above 
referenced matter.  No Exceptions were filed.  The Comptroller has considered 
the ALJ’s Proposal for Decision and determined that the Proposal for Decision 
should be adopted without change.  This decision represents the ruling thereon.

The above decision resulting in Taxpayer's liability as set out in “Attachment 
A,” which is incorporated by reference, is approved and adopted in all 
respects.  The decision becomes final twenty days after the date Petitioner 
receives notice of this decision, and the total sum of the tax, penalty, and 
interest amounts is due and payable within twenty days thereafter.  If such sum 
is not paid within such time, an additional penalty of ten percent of the taxes 
due will accrue, and interest will continue to accrue.  If either party desires 
a rehearing, that party must file a Motion for Rehearing, which must state the 
grounds for rehearing, no later than twenty days after the date Petitioner 
receives notice of this decision.  Notice of this decision is presumed to occur 
on the third day after the date of this decision.

Signed on this 21st day of November 2008.


SUSAN COMBS
Texas Comptroller of Public Accounts

by: Martin A. Hubert
Deputy Comptroller


ENDNOTE(S):

(1) TEX. TAX CODE ANN. 151.009, 151.051.
(2) See 34 TEX. ADMIN. CODE 1.40(2)(A).
(3) Bullock v. National Bancshares Corp., 584 S.W.2d 268 (Tex. 1979).
(4) TEX. TAX CODE ANN. 151.316(a)(7).
(5) Statement of Grounds, February 13, 2006.
(6) Attachment to Statement of Grounds, February 13, 2006
(7) See STAR Document Nos. 7809T0128B02 (September 26, 1978), 8612L0780A09 
(December 10, 1986), and 9103L1096A08 (March 28, 1991).
(8) See, e.g., TEX. GOV’T CODE ANN. 311.023(6).




ACCESSION NUMBER: 200811262H
SUPERSEDED: S
DOCUMENT TYPE: H
DATE: 11/21/2008
TAX TYPE: SALES