Sec. 8.2. (a) Except as provided in subsection (f), a transaction in which a person acquires an aircraft for rental or leasing in the ordinary course of the person's business is not exempt from the state gross retail tax unless the person establishes, under guidelines adopted by the department in the manner provided in IC 4-22-2 (including the adoption of emergency rules under IC 4-22-2-37.1), that the annual amount of the gross lease revenue derived from leasing or rental of the aircraft, which may include revenue from related party transactions, is equal to or greater than seven and five-tenths percent (7.5%) of the:
(1) book value of the aircraft, as published in the VREF Aircraft Value Reference guide for the aircraft; or
(2) net acquisition price for the aircraft, which shall include the value of any trade or exchange and excluding any sales commissions paid to third parties.
(b) If a person acquires an aircraft below the VREF Aircraft Value Reference guide book value as set forth in subsection (a)(1), the person may appeal to the department for a lower lease or rental threshold equal to the actual acquisition price paid if the person demonstrates that the transaction was completed in a commercially reasonable manner based on the aircraft's age, condition, and equipment.
(c) For purposes of this section, the department may request the person to submit to the department supporting documents showing that the aircraft is available for general public lease or rental, copies of business and aircraft insurance policies, and other documents that assist the department in determining if an aircraft is exempt from the state gross retail tax.
(d) A person is required to meet the requirements of subsection (a) until the earlier of the date the aircraft has generated sales tax on leases or rental income that is equal to the amount of the original sales tax exemption, the elapse of thirteen (13) years, or the date the aircraft is sold. No additional sales or use tax is due from the seller on the seller's original purchase when the aircraft is sold if the person has met the terms of this section for all periods prior to the sale.
(e) A person is required to remit the gross retail tax on taxable lease and rental transactions the entire time the aircraft is used for lease and rental, even if the aircraft is used for lease and rental beyond a thirteen (13) year period.
(f) A transaction in which a person acquires an aircraft to rent or lease the aircraft to another person for predominant use in public transportation (as provided for in section 27 of this chapter) by the other person or by an affiliate of the other person is exempt from the state gross retail tax. The department may not require a person to meet the revenue threshold in subsection (a) with respect to the person's leasing or rental of the aircraft to receive or maintain the exemption. To maintain the exemption provided under this subsection, the department may require the person to submit annual reports showing that the aircraft is predominantly used to provide public transportation.
(g) The exemptions allowed under subsections (a) and (f) apply regardless of the relationship, if any, between the person or lessor and the lessee or renter of the aircraft.
As added by P.L.137-2022, SEC.23.
Structure Indiana Code
Article 2.5. State Gross Retail and Use Taxes
Chapter 5. Exempt Transactions of Retail Merchant
6-2.5-5-0.4. Intent of General Assembly Adding Section 36 of This Chapter
6-2.5-5-1. Animals, Feed, Seed, and Chemicals; Race Horse in a Claiming Race
6-2.5-5-2. Agricultural Machinery, Tools, and Equipment
6-2.5-5-3. Exemption; Acquisition for Direct Use in Direct Production
6-2.5-5-4. Property for Use in Producing Machinery, Tools, or Equipment
6-2.5-5-6. Exemption; Acquisition for Incorporation Into Product for Sale
6-2.5-5-7. Materials Used in Construction Business, Public Street, or Utility Service
6-2.5-5-8.5. Power Subsidiary; Public Utility
6-2.5-5-9. Returnable Containers; Nonreturnable Packaging
6-2.5-5-10. Electric or Steam Utilities; Production Plant or Power Production Expenses
6-2.5-5-11. Gas Utilities; Production or Storage Plants and Expenses
6-2.5-5-12. Water Utilities; Plants and Expenses
6-2.5-5-12.5. Wastewater Utilities; Plants and Expenses
6-2.5-5-14. Public Utilities; Acquisitions of Personal Property
6-2.5-5-15.5. Motor Vehicles; Intrafamilial Title Transfers
6-2.5-5-16. State or Local Government Acquisitions
6-2.5-5-18. Drugs, Medical Equipment, Supplies, and Devices; Acquisition by Patient
6-2.5-5-19. Drugs, Insulin, Oxygen, Blood, or Blood Plasma; Acquisition by Licensed Practitioner
6-2.5-5-19.5. Drugs; Insulin; Oxygen; Blood Glucose Monitoring Supply; Blood or Blood Plasma
6-2.5-5-20. "Food and Food Ingredients for Human Consumption"
6-2.5-5-22. Exemption; Sales of Meals; Schools; Fraternities; Sororities; Student Cooperatives
6-2.5-5-23. School Building Materials
6-2.5-5-29. Manufactured Homes; Industrialized Residential Structures
6-2.5-5-30. Environmental Quality Compliance; Manufacturing, Mining, Agriculture, or Recycling
6-2.5-5-31. Free Distribution Newspaper; Related Transactions
6-2.5-5-33. Tangible Personal Property Purchased With Food Stamps
6-2.5-5-34. Sale of Lottery Tickets; Gross Retail Tax
6-2.5-5-35. Tangible Personal Property Transactions
6-2.5-5-36. Commercial Printing Contracts
6-2.5-5-38.1. Qualified Computer Equipment Sales
6-2.5-5-38.2. Vehicle Lease Transactions
6-2.5-5-39. Cargo Trailers and Recreational Vehicles Registered for Use Outside Indiana
6-2.5-5-40. Research and Development Property
6-2.5-5-42. Aircraft Titled, Registered, or Based Outside Indiana
6-2.5-5-43. Type Ii Gambling Games
6-2.5-5-44. Sales to City or Town for Municipal Golf Course
6-2.5-5-45. Gross Retail and Use Tax Exemption; Cigarette and Tobacco Tax Meter Machines
6-2.5-5-45.8. Recycling and Recycling Materials
6-2.5-5-46. Aircraft Repair and Maintenance
6-2.5-5-47. Coins, Bullion, and Legal Tender
6-2.5-5-48. Drainage Water Management System
6-2.5-5-50. Required Product Labels
6-2.5-5-52. Hot Mix Asphalt Plant Equipment; Trucks; Pavers
6-2.5-5-54. Special Rule for Sharing of a Passenger Motor Vehicle for Fewer Than 15 Days
6-2.5-5-55. "Public Safety Equipment and Materials"; Exemption