Justia Aviation Opinion Summaries

Articles Posted in Tax Law
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Air 7, LLC, a Delaware limited liability company, and its owner, the Peter J. Koral Trust, owned a Gulfstream G-550 jet aircraft. Air 7’s headquarters were located at the Camarillo Airport in Ventura County. The owner was a resident of California. The County of Ventura (the “County”) imposed a tax on the aircraft that was permanently removed from California before the tax lien date of January 1 for the tax year 2017. Air 7 sued the County for a refund of the taxes, statutory interest, and penalties the County had imposed. The trial court found the aircraft was not permanently removed from Ventura County on the tax lien date because it had not established situs elsewhere. The trial court entered judgment for the County.   The Second Appellate District reversed. The court explained that the aircraft was removed from California with the intent that removal be permanent, and the aircraft never returned to California during the 2017 tax year. Accordingly, the court concluded the aircraft was not “situated” or “habitually situated” in California. The tax imposed on the aircraft violates California law irrespective of whether the aircraft was situated and taxed in another state. View "Air 7, LLC v. County of Ventura" on Justia Law

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The Supreme Court affirmed in part and reversed in part the decision of the administrative hearing commission (AHC) finding no use tax liability for APLUX LLC and Paul and Ann Lux Associates L.P. on the out-of-state purchase of two aircraft, holding that APLUX was not entitled to resale exemption on the purchase of either aircraft.After purchase, both aircraft - referred to as "the TBM" and "the Excel" - were brought to Missouri. APLUX asserted that it leased, on a non-exclusive basis, the TBM to its parent company, Luxco, Inc., and the Excel concurrently to both Luxco and Aero Charter, Inc. The AHC held that each lease agreement constituted a "sale" for purposes of the tax resale exemption set out in Mo. Rev. Stat. 144.018. The Supreme Court reversed in part, holding that a "sale" to Luxco did not occur, and therefore, APLUX was not entitled to a resale exemption based on the Luxco agreement. View "APLUX, LLC v. Director of Revenue" on Justia Law

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Richland Aviation filed this proceeding to determine whether it was a “scheduled airline” and therefore subject to central tax assessment by the Montana Department of Revenue (DOR). The district court concluded that Richland Aviation was not a scheduled airline because it “does not hold out to the public that it operates between certain places at certain times[.]” Therefore, the district court concluded that Richland Aviation was not subject to central assessment. Applying the definitions found in Montana Department of Revenue v. Alpine Aviation, Inc., 384 P.3d 1035, the Supreme Court affirmed, holding that Richland Aviation does not engage in “regularly scheduled flights” required for central assessment. View "Richland Aviation, Inc. v. State, Department of Revenue" on Justia Law

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Plaintiff Signal Aviation Services, Inc. (Signal) appealed a superior court grant of summary judgment in favor of defendant City of Lebanon (City) in this action by Signal for, among other things, breach of contract. The City cross-appealed a portion of the trial court’s order interpreting the contract. Signal leased 8.91 acres at the Lebanon Municipal Airport (airport) as assignee of a Lease and Operating Agreement (LOA). The City owned the airport and was the lessor under the LOA. The LOA granted Signal the nonexclusive right and obligation to provide fixed based operator (FBO) services at the airport. In granting this nonexclusive right, the City agreed in paragraph 3M(2) of the LOA that “[a]ny other operator of aeronautical endeavors or activities will not be permitted to operate on the Airport under rates, terms [or] conditions which are more favorable than those set forth in this Agreement.” In 2006, the City increased the assessed value of the land leased by Signal, not including the improvements, resulting in a corresponding increase in Signal’s property tax liability. Signal applied for an abatement of taxes for the years 2006 and 2007. The City’s assessors denied abatement, and Signal appealed to the New Hampshire Board of Tax and Land Appeals (BTLA). The BTLA dismissed the appeals because Signal failed to present evidence of the property’s market value. Signal did not appeal that decision, bringing instead this suit, claiming, among other things, breach of contract. Its writ alleged that the City “materially breached its obligations under the [LOA] by providing more favorable and disproportionate tax assessments and taxation schemes under agreements with other entities at the Airport providing commercial aeronautical services there.” After review, the Supreme Court affirmed, having concluded that paragraph 3M(2), so far as it concerned taxation, merely obligated the City to require all other operators to pay all lawfully levied or assessed taxes. View "Signal Aviation Services, Inc. v. City of Lebanon" on Justia Law

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Victor Bravo Aviation is a Connecticut company founded and established by E. Brian Cleary and his wife Vicki in 2002. In 2004, Victor Bravo contracted to purchase an aircraft from Columbia Aircraft Sales in Connecticut. The aircraft was constructed in France. It was flown to the USA with scheduled stops in Maine and Connecticut in 2005. Victor Bravo took possession of the aircraft in Connecticut as its owner. The aircraft was flown its first twelve months in Maine and other surrounding states. The aircraft made thirty-seven flights to Maine. It was stationary in Maine for 156 days with approximately 121 overnight lay-overs. Victor Bravo never had the aircraft registered in Maine. Victor Bravo was assessed with Maine use taxes on the aircraft in February 2007. Victor Bravo appealed this assessment to the Superior Court which was upheld. On appeal, the Supreme Court made the distinction between the facts of this case with those in the "Blue Yonder" case which was decided April 26, 2011. It was determined that the aircraft owned by Victor Bravo was used in a manner that went beyond having a “temporary, transient presence” in Maine. The Court held that under these circumstances, the aircraft should be properly considered to have “come to rest” in Maine, and therefore subject to the Maine use tax. The Court affirmed the Superior Court and Assessor’s decisions.View "Victor Bravo Aviation, LLC v. State Tax Assessor" on Justia Law