Wed, Sep 07, 2016
Ruling Issued By State's Department Of Finance And Administration
The Arkansas Department of Finance and Administration recently issued a ruling on the application of the Arkansas agricultural exemption to a taxpayer's purchase of an aircraft. The taxpayer in question operated an agricultural flying service and purchased a used aircraft outside the state and brought it into Arkansas to use in the business.
The Department conducted an audit and determined that because airplanes are specifically excluded from the definition of farm equipment and machinery, the purchase was subject to use tax and consequently assessed use tax and interest.
The taxpayer appealed, arguing that the purchase should qualify for the agricultural exemption under GR-51(B)(1)(a). This regulation defines "farm equipment and machinery" as agricultural implements used exclusively and directly for the agricultural production of food or fiber as a commercial business or the agricultural production of grass sod or nursery products as a commercial business. Although it does exclude airplanes, it specifically includes "sprayer" and "spreaders." The taxpayer contended that because the airplane was used solely in crop-dusting, it should be considered a "sprayer" or "spreader" and did not fit the meaning of "airplane" as used in applicable Arkansas statutory laws and rules.
The Appellate Court ultimately upheld the Department's assessment, finding that although the taxpayer provided evidence showing the aircraft had no function other than the application of seeds, fertilizers, and chemicals, it did fit the plain and ordinary meaning of the word airplane and, therefore, was excluded from the exemption.
(Source: Ryan Tax Services news release. Image from file)
More News
Also: SkyReach Parts Support, Piper Service Ctr, Airliner Near-Miss, Airshow London The Judge overseeing Icon's convoluted Chapter 11 process has approved $9 million in Chapter 11 >[...]
ILS PRM Approach An instrument landing system (ILS) approach conducted to parallel runways whose extended centerlines are separated by less than 4,300 feet and at least 3,000 feet >[...]
Aero Linx: FlyPups FlyPups transports dogs from desperate situations to fosters, no-kill shelters, and fur-ever homes. We deliver trained dogs to veterans for service and companion>[...]
Also: Skydio Chief, Uncle Sam Sues, Dash 7 magniX, OR UAS Accelerator US Secretary of the Air Force Frank Kendall was given a turn around the patch in the 'X-62A Variable In-flight>[...]
Also: NBAA on FAA Reauth, DJI AG Drones, HI Insurance Bill Defeated, SPSA Airtankers The Beechcraft Denali continues moving forward towards certification, having received its FAA T>[...]