Aircraft And Flying Services

Sections 21-101, 63-3612, 63-3622GG, Idaho Code 01. Definitions. For the purposes of this section, the following terms have the following meanings: (7-1-26) a. Aircraft. The term aircraft is defined in Section 21-101(b), Idaho Code. (7-1-26) b. Freight. Goods transported by a carrier between two (2) points. (7-1-26) c. Nonresident Businesses and Other Organizations. A limited liability company (LLC) or other legal entity formed by an Idaho resident under the laws of another state primarily for the purpose of purchasing and owning one (1) or more aircraft isn’t a nonresident. The use of an aircraft owned by such an entity will be subject to use tax upon its first use in Idaho. (7-1-26) d. Day. Any part of a 24-hour period from midnight to midnight is a day. (7-1-26) e. Transportation of passengers or freight for hire. The business of transporting persons or property for compensation from one (1) location on the ground or water to another. It doesn’t include any flight that begins and ends at the same point. (7-1-26) f. Common Carrier. The operation of an aircraft in the transportation of passengers or freight for hire by members of the public. For flights in which federal regulations limit or minimize profit, the aircraft is likely not IDAHO ADMINISTRATIVE CODE IDAPA 35.01.02 State Tax Commission Idaho Sales & Use Tax Administrative Rules Section 038 Page 18 operating as a common carrier. The term “public” doesn’t include: (7-1-26) i. Owners or operators of the aircraft; (3-31-22) ii. Employees of the aircraft owner or operator; (3-31-22) iii. Guests of the aircraft owner or operator; (3-31-22) iv. Any of the above with the same relationship to a parent of the aircraft owner, a subsidiary of that parent, or a subsidiary of the aircraft owner; (3-31-22) v. An individual or entity flying under a time sharing agreement which is an arrangement where an aircraft owner leases their aircraft with flight crew to another individual or entity and the aircraft owner limits the amount charged in accordance with federal regulations; or (7-1-26) vi. An individual or entity flying under an interchange agreement which is an arrangement where an aircraft owner leases their aircraft to another aircraft owner in exchange for equal time on the other owner’s aircraft and any fees charged can’t exceed the difference between the costs of owning, operating, and maintaining the two (2) aircraft. (7-1-26) 02. Aerial Contracting Services. Businesses primarily engaged activities involving the carrying of external loads, such as aerial logging, are performing aerial contracting services. Such businesses are not primarily engaged in the transportation of freight. (7-1-26) a. Aircraft purchased, rented, or leased for aerial contracting are taxable unless an exemption applies. It makes no difference if the service is provided to a government agency or a private individual or company. The purchase of repair parts, oil, and other tangible personal property are taxable. (7-1-26) 03. Flying Instructions. Flying instructions or lessons which may include solo flights are a service and the fees are not taxable. (3-31-22) a. Aircraft purchased, rented, or leased to be used primarily for flying instruction are taxable. (3-31-22) b. When aircraft held for resale are used by the aircraft dealer for flying instructions or lessons, a taxable use occurs. The use tax is due on a reasonable rental value for the time the aircraft is used to provide the service. (3-31-22) 04. Examples. Available at Sales and Use Tax Examples. (7-1-26)