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BTLG Table of Contents > Transactions And Use Tax Regulations > Regulation 1825

Transactions And Use Tax Regulations

Title 18. Public Revenues
Division 2. California Department of Tax and Fee Administration — Business Taxes (State Board of Equalization — Business Taxes — See Chapters 6 and 9.9)
Chapter 4. Sales and Use Tax
Article 20. Transactions (Sales) and Use Taxes

Regulation 1825

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Regulation 1825. Aircraft Common Carriers.

Reference: Sections 7261 and 7262, Revenue and Taxation Code.

(a) Definition—"Common Carriers." As used herein, the term "common carriers" means persons who engage in the business of transporting persons or property for hire or compensation and who offer their services indiscriminately to the public or to some portion of the public.

(b) Aircraft Common Carriers.

(1) State-administered district transactions (sales) tax does not apply to sales of tangible personal property to operators of aircraft to be used or consumed principally outside the county in which the sale is made if such property is to be used or consumed directly and exclusively in the use of such aircraft as common carriers of persons or property under the laws of this state, the United States, or any foreign government. Tax applies, however, to sales of fuel and petroleum products on and after July 29, 1991.

(2) State-administered district use tax does not apply to the storage, use, or other consumption of tangible personal property purchased by operators of aircraft when such property is used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government. Effective July 29, 1991, this exemption is not available for the storage, use, or other consumption of fuel and petroleum products. This exemption is in addition to that provided in sections 6366 and 6366.1 of the Revenue and Taxation Code.

(c) Conditions of Exemption. The exemption for operators of aircraft common carriers applies only if the property is used directly and exclusively in the exempt activity. This exemption is limited to supplies and equipment (excluding fuel and petroleum products effective July 29, 1991) used or consumed directly in the carriage of persons or property. It does not include office or shop equipment or supplies or any other property not directly used or consumed in the carriage of persons or property.

(d) Leases. If property is leased to an operator of an aircraft common carrier under a lease which is a continuing sale or a continuing purchase, unless otherwise exempted, either the use tax or transactions (sales) tax applies to the gross receipts from the lease during such period of time that the property is in a taxing jurisdiction.

History—Adopted January 6, 1970, effective February 25, 1970.

Amended December 12, 1973, effective January 18, 1974.

Amended September 24, 1974, effective October 26, 1974.

Amended October 22, 1975, effective November 29, 1975.

Amended February 6, 1980, effective March 29, 1980. In (c) added exemption expiration date.

Amended April 16, 1985, effective May 16, 1985. Amended heading to subdivision (c) by changing date to 1986, and added footnote.

Amended March 30, 1988, effective June 8, 1988. Amended subdivisions (b) and (c) and Appendix (b)(2) to remove reference to a specific exemption of sales to operators of waterborne vessels from the transactions (sales) tax which expired on December 31, 1987.

Amended September 30, 1992, effective January 8, 1993. Amended to repeal the exemption from the transactions tax for the sale of use of fuel or petroleum products to or by operators of aircraft effective July 29, 1991.

Amended August 24, 2004, effective January 13, 2005. Subdivision (b)(2)—word "Section" changed to "section." Appendix— (a), second sentence—words "county tax" and "county" deleted and phrases "of the Bradley-Burns local taxes," "of the 1.25% local tax … to 75 percent," "1 percent local," and "(i.e., .75%)" added. (b)—phrase "under Regulation 1825," "district … from," "local … is," and "; and, … percent" added and phrase "local … 1825" deleted. (b), first unnumbered paragraph—phrase "(check which is applicable)" added to body and deleted from option (3). (b), third unnumbered paragraph—phrase "exemption from" delete and ":" and phrase "(check which is applicable)" added to body; (1) phrases " added to body; (1) phrases—"Partial exemption from" and "local … is .75" and phrase "local tax only" deleted; (2) capital "D" replaced with "Exemption from d" (3) phrases "exemption from district tax and partial exemption from" and "local tax which: On or before June 30, 2004 is," "percent: … .75" added and phrases "tax and district tax," and "(check which is applicable)" deleted.

Amended October 27, 2015, effective December 16, 2015. Amended the Appendix subdivisions (a) and (b) to reflect the one-quarter percent (0.25%) reduction in the rate of local sales and use tax caused by the expiration of Revenue and Taxation Code (RTC) section 7203.1 on December 31, 2015, and the corresponding restoration of the partial 80 percent local sales and use tax exemption for aircraft common carriers provided by RTC sections 7202, subdivision (g), and 7203, subdivision (e), operative January 1, 2016.

Appendix—FORM OF EXEMPTION CERTIFICATE FOR CLAIMING EXEMPTION UNDER REGULATIONS 1805 AND 1825.

(a) Certificate Necessary to Support Exemption. All purchasers of tangible personal property claiming exemption from Bradley-Burns local taxes under the provisions of Regulation 1805 or from both Bradley-Burns local taxes and district transactions (sales) and use taxes under Regulation 1825 should file with the seller an exemption certificate in the form shown below. On and after July 1, 1972, for purposes of the Bradley-Burns local taxes, this exemption is limited to 80 percent of the 1.25 percent local tax (i.e., 1%); on and after July 1, 2004 until December 31, 2015 this exemption is limited to 75 percent of the 1 percent local tax (i.e., .75%); and, on and after January 1, 2016 this exemption is limited to 80 percent of the 1.25 percent local tax (i.e., 1%).

(b) Form of Certificate: Aircraft Common Carrier. The following certificate may be used by a purchaser claiming exemption under Regulation 1825 from district transactions (sales) and use taxes, and/or claiming partial exemption under Regulation 1805 from Bradley-Burns local taxes which: On or before June 30, 2004 is 1 percent; and, on and after July 1, 2004 until December 31, 2015 is .75 percentand, on and after January 1, 2016 is 1 percent.