La. Admin. Code tit. 61 § I-4402

Current through Register Vol. 50, No. 4, April 20, 2024

Section I-4402 - Exemptions from Lease or Rental Tax, Helicopters

A. This Section (R.S. 47:302.1) provides for special treatment of the state and local sales taxes on rental transactions involving helicopters used directly in the exploration for, or the extraction or production of, oil, gas, and other minerals, or helicopters used in providing services to other businesses which are engaged in such activities. It provides that any helicopter which is to be used primarily for the aforementioned uses may be acquired through a lease transaction, and the entire transaction will be treated as a sale. The transaction may be entitled a rental, lease, lease purchase, sale and lease-back, or any other similar term. In any case, the lessor or rentor shall not incur a sales or use tax liability on the acquisition of the helicopter for lease, nor on the withdrawal of a helicopter from resale inventory to be placed in rental service, when the lessee is engaged in the exploration or production of oil, gas, or other minerals, or related service industries. Unlike rental transactions involving other tangible personal property, the lease contracts involving such helicopters will not be required to contain language which guarantees any rights of title to the lessee, nor will it need any obligations to maintain the lease for its full term.

B. The sales taxes due on such transactions shall be payable in equal monthly installments over the entire term of the lease, rather than at the inception of the lease agreement, as with rental transactions involving other tangible personal property. In addition, unlike conventional lease transactions, the tax is due and payable by the dealer/lessor for the period the receipts are invoiced to the buyer/lessee, and not for the period in which active collection is made.

C. For state and local sales or use tax purposes, these transactions shall be taxed as sales and not as leases. Thus, the location of intended use of the helicopters will not determine taxability as it would in a rental transaction.

La. Admin. Code tit. 61, § I-4402

Promulgated by the Department of Revenue and Taxation, Sales Tax Section, LR 13:107 (February 1987), amended by the Department of Revenue, Policy Services Division, LR 31:91 (January 2005).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:302.1, R.S. 47:337.2, and R.S. 47:1511.