|The state of Texas enacted legislation (Senate Bill 1396) to dispel confusion surrounding aircraft sales and use tax laws that were leading to contradictory interpretations and in some cases hefty levies. Texas Governor Greg Abbot signed SB 1396 into law on June 16, following state House and Senate passage late last month. Business aviation groups, led by NBAA, pushed for the legislation after the former state comptroller had taken a narrow view of aircraft leasing, leading to contradictory interpretations during audits and subjecting some leasing agreements to new taxes.
“Using related party leases to own and operate a business aircraft is a common structure that also allows for compliance with complex FAA and IRS rules,” said Scott O’Brien, senior manager of finance and tax policy for NBAA. “Before passage of SB 1396, the previous comptroller’s office was invalidating what we believed were legitimate aircraft leasing structures.”
O’Brien added that after the new comptroller took office, “there was a willingness to confer with industry on tax policy that would be both fair and equitable.” The law takes effect September 1.
Source: AINalerts News