City and County of Denver , Colorado

TAX GUIDE

Topic No. 3

AIRCRAFT

The sale and purchase of aircraft are subject to sales and use tax unless exempt. Exempt aircraft include:

 

A.    Aircraft engaged in interstate commerce, owned or used by air carriers as such term is defined by the Federal Civil Aeronautics Act of 1938, as amended, and aircraft owned or leased by carriers valued for assessment by the Division of Property Taxation of the Colorado Department of Local Affairs. (These would be scheduled air carriers engaged in interstate commerce whose aircraft are engaged in inter-state commerce on their first use/storage in Denver .)  

B.    Aircraft owned or leased by any department of the federal or state government.  

C.    Aircraft held for resale constituting stock in trade of a manufacturer, dealer, distributor, or retailer of aircraft, if such aircraft is not used for commercial purposes. 

D.    Aircraft operated from a fixed base outside of Denver .  

Aircraft are required to be registered with the Federal Aviation Administration (FAA). They are not required to be registered by the State of Colorado or the City and County of Denver .  

NOTE: The DRMC includes aircraft in its definition of automotive vehicles.     

All aircraft engines, other parts, and accessories are taxable when purchased, sold, stored, used, distributed or consumed in Denver , including but not limited to when installed on aircraft in Denver regardless of where the aircraft is registered.   For purposes of administrative feasibility, Denver ís tax practice is to only tax the following parts when removed from an aircraft in Denver : aircraft engines; however, if an engine is not taxed at the time of removal the engine remains subject to tax.   Each lease payment is a separate sale under the DRMC, including, but not limited to lease payments on aircraft engines (under a separate engine lease or as part of an aircraft lease). 

EXAMPLE  

A Denver fixed base operator repairs and replaces technical instruments. The instruments delivered and installed in Denver at retail would be subject to sales/use tax. Instruments delivered and installed outside of the City would not be subject to sales/use tax.  

 RELATED TAX GUIDE TOPIC

Common Carriers

 * DRMC Section 53-24(1). Definitions.

* DRMC Section 53-26(11). Exemptions.

* DRMC Section 53-95(1). Definitions.

* DRMC Section 53-97(12). Exemptions.

* Civil Aeronautics Act of 1938. 

THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT DENVER TAX LAW FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE DRMC AND APPLICABLE RULES AND REGULATIONS.

04/07                                                                               3 -1 of 1