Amended House Bill 3568 Tax exemption on parts used in general aviation aircraft repair…more information included below from Tax Analyst from the SC Department of Revenue.
Signed by governor: June 6, 2015
Effective date: 01/01/16
House Bill: 3568:
An act to amend section 12-36-2120 code of laws of South Carolina, 1976, relating to exemptions from the state sales tax, so as to exempt certain construction materials used by an entity organized under section 501 (C) (3) of the internal revenue code as a nonprofit organization, to expand the Exemption for parts and supplies used by persons engaged in the business of repairing or reconditioning aircraft, and to exempt certain children’s clothing sold to a private charitable organization exempt from federal and state income tax and to provide exceptions.
General Aviation repair and parts sales tax was previously 6% in the state of South Carolina. As a result, many repair jobs were sent off to surrounding Southern states. With overall costs lowered, this bill will truly enhance general aviation in South Carolina and support it’s economic development. The South Carolina Aviation Association President, Don Purcell and the AOPA Director of State and Government Affairs, Jared Esselman met with key legislators to explain how these state taxes hindered general aviation growth in the state. All of those involved in general aviation are incredibly excited and proud as they worked hard to receive the support and the attention to the issue. “Another step in making South Carolina Aviation friendly!!” South Carolina Aviation Association President, Don Purcell.
Additional information from a Tax Analyst, Ulysses Byrd, from the SC Department of Revenue includes:
Code Section 12-36-2120 (52) was amended to provide that “parts and supplies used by persons engaged in the business of repairing or reconditioning aircrafts are exempt from sales tax. This exemption does not extend to tools and other equipment not attached to or that do not become a part of the aircraft”. As a result, if a customer takes an aircraft in need of repairs or reconditioning to a business engaged in repairing or reconditioning aircrafts for repairs then the charge for the parts and supplies used in repairing or reconditioning the aircraft would be exempt from sales tax.
It is an opinion that the above sales tax exemption does not apply to the sale of over-the-counter parts. The sales tax exemption provided under Code Section 12-36-2120 (52) applies when the parts and supplies are used by the person engaged in the business of repairing or reconditioning of the aircrafts.
Under South Carolina Sales Tax law, the sale of parts and supplies by a dealer are made either as a sale at retail or wholesale sale. If the dealer make sales at retail, such sales are considered subject to tax unless otherwise specifically exempted or excluded from tax as wholesale sales.
If the sale of the parts by the dealer are wholesale sales (e.g., sales of tangible personal property to licensed retail merchants, dealers or wholesalers for resale) then such sales are excluded from sales tax when sold to licensed retail merchants, dealers or wholesalers for resale.
Under exemption (52) above, parts and supplies used by persons engaged in the business of repairing or reconditioning aircrafts applies to such parts and supplies as engines, engine parts, brake parts, oil, lubricants, and paint used to repair or recondition aircrafts.