Aircraft Jet Fuel Tax
Aircraft Jet Fuel

Aircraft Jet Fuel (AJF)

The AJF tax is owed by the person who owns the AJF fuel when a taxable event occurs (the tax is assessed).

A taxable event occurs when AJF is:

  • Sold to a jet fuel user and delivered into the:
    • Fuel tanks of aircrafts, or
    • Storage facility from which the fuel is withdrawn for aircraft use.
  • Used by the dealer as an AJF user.

The AJF tax is collected by the State Controller's Office.

Exemptions

In general, AJF sales for propulsion of aircrafts are subject to tax unless it is sold to:

  • An aircraft common carrier engaged in the business of transporting people or property for hire or compensation under a certificate of public convenience and necessity issued according to California, the United States, or of any foreign government laws.
  • A person engaged in the business of constructing or reconstructing by manufacture or assembly of completed aircraft or modifying, overhauling, repairing, maintaining, or servicing of aircrafts.
  • The United States Armed Forces.

Exempt sales to common carriers and aircraft manufacturers must be supported by an exemption certificate as prescribed by Regulation 1137, Exempt Sales of Jet Fuel.

Note that, generally the sale of AJF to private jet operators is subject to tax because private jet operators are not considered common carriers.

In addition to the exemptions noted above, AJF sold to other AJF dealers is not taxable and should be claimed on the proper exemption schedule on the Aircraft Jet Fuel Dealer Tax Return. See the Motor Vehicle Fuel Tax Annotations to Aircraft Jet Fuel Tax Regulation 1137 for more information.

If you believe you have overpaid your tax liability, there are special rules for filing AJF tax claims for refund. Visit our Refunds section on the Industry Topics page for more information.

Certificate of Public Convenience and Necessity

In order to be excluded from the definition of an AJF user under Revenue and Taxation Code section 7389(a), an air common carrier must hold a Certificate of Public Convenience and Necessity issued by the United States or a foreign government.

  • The following satisfy the certificate requirement under section 7389(a):
  • The following do not satisfy the certificate requirement under section 7389(a):
    • Air Carrier Certificate issued by the Federal Aviation Administration

Requirements to Support Exempt Jet Fuel Sales to Common Carriers

Documents to support tax exempt sales:

  • An exemption certificate for each common carrier you claim on Schedule 10K, and for each manufacturer you claim on Schedule 10G.
  • The Certificate of Public Convenience and Necessity issued by the U.S. Department of Transportation (this is different than the Federal Aviation Administration [FAA] Air Carrier Certificate) from each common carrier.
  • A government purchase order to the United States Armed Forces.

Good Faith Acceptance of Exemption Certificate

If an AJF dealer accepts an exemption certificate from a purchaser in good faith, they will be relieved from liability from the tax due on the sale.

If the purchaser subsequently uses the fuel as an AJF user, the purchaser is liable for the tax on fuel at the time of use and is required to report and pay the tax.

However, if the AJF dealer accepts an exemption certificate from a purchaser who, based on the dealer's experience or knowledge, would likely use the fuel in a nonexempt manner, the dealer's good faith acceptance may be questioned. In such a situation, the dealer should not accept the exemption certificate and must collect tax reimbursement from the purchaser.

Nonexempt Sales to State, Local, and United States Governments

The following sales are nonexempt:

  • State and local government sales—Since state and local governmental agencies are included in the definition of “person” under the Motor Vehicle Fuel Tax Law, state and local governmental agencies are “aircraft jet fuel users.” Therefore, an AJF dealer is liable for the tax on sales of AJF to state and local governmental agencies.
  • United States government sales—Although sales of AJF to the armed forces of the United States are exempt from the AJF tax, an AJF dealer is liable for the tax on sales of AJF to other departments, agencies, and instrumentalities of the United States.

See the Motor Vehicle Fuel Tax Annotations to Aircraft Jet Fuel Tax Regulation 1137 for more information.

Returns

Bill of Lading (BOL)/Receipt Number That is Lost

Generally, you enter the BOL/Receipt number when product is removed from the rack. In the case of bulk plant removals or entries of tax-paid fuel on your return schedules, the sales/purchase invoice number may be used in place of a lost BOL/Receipt number.

All parties to a transaction must report the same document (BOL/Receipt/Invoice) number to us on the pertinent schedules of their returns. In the case of a sale or purchase, if you are unable to obtain this information from the other party, you may report document ID XXSALEMMDDYY where XX is the last two digits of your account number and MMDDYY is the date of the transaction. For example, account 12345678 reporting an August 13, 2019, transaction would report document ID 78SALE081319.

Sales Reported on Schedule 5

Sales for an entire month cannot be reported as a single amount on Schedule 5. Transactions involving sales of jet fuel placed into an aircraft may be reported as summarized daily totals by airport location. For transactions involving placement of jet fuel into storage, individual transaction details are required. Detailed reporting instructions are provided in CDTFA-810-FTE, Instructions for Preparing Motor Fuels Schedules.