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Pacific Southwest Airlines v. State Board of Equalization … (1977)

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Six-Month Principal Use Test Invalid Where More Information Is Available

The Board had utilized a six-month principal use test for the first six months of ownership of an aircraft to establish whether tax applied to the sale of an aircraft which was used for common carrier purposes and for pilot-training purposes. Because plaintiff's use of the aircraft for common carrier purposes was less than 50 percent of the total use of the aircraft during the first six months of ownership of the aircraft by plaintiff, the Board denied plaintiff the exemption set forth in Section 6366 of the Revenue and Taxation Code.

That section exempts from sales and use tax aircraft sold to persons using such aircraft as common carriers. The court held that the exemption applied because the test had not been promulgated as a formal regulation, which would have assured constructive notice to plaintiff, and because plaintiff had no actual notice of the test. The court further held that the six month test was not justified by administrative necessity where plaintiff's records were available to establish that the aircraft was used for common carrier purposes for over 50 percent of the total use of the aircraft during the time that it was owned by plaintiff. Pacific Southwest Airlines v. State Board of Equalization (1977) 73 Cal.App.3d 32.