On July 24, 2015, the New York Department of Taxation and Finance published guidance on the sales and use tax exemption for “general aviation aircraft,” effective September 1, 2015.  N.Y. Dep’t of Taxation & Finance, TSB-M-15(3)S (July 24, 2015).  The exemption, to be added as subsection (a)(21-a) of section 1115 of the Tax Law, exempts from sales and use tax “general aviation aircraft, and machinery or equipment to be installed on such aircraft.”  Previously, such sales and uses were fully taxable.

“General aviation aircraft” is defined broadly as aircraft used in civil aviation, except for commercial or military aircraft or “an unmanned aerial vehicle or drone.”  With respect to “general aviation aircraft,” the ruling states receipts from the following items are tax-exempt:

• Aircraft itself
• Property affixed to aircraft for its equipping, including furniture, fixtures, built-in appliances, window coverings, climate control systems or entertainment systems
• Property that the aircraft has at the time of its sale that is necessary for its operation, such as avionics, radios, weather radar systems, and navigation and emergency lighting

Similarly, receipts from machinery and equipment installed on a general aviation aircraft after its purchase and necessary for equipping and normal operation are also tax-exempt.  The sales and use tax exemption for “general aviation aircraft” also applies to leases of one year or more of certain noncommercial aircraft (seating capacity of less than 20 passengers and maximum payload capacity of less than 6,000 pounds) subject to the accelerated tax payment provisions of section 1111(i) of the Tax Law.  However, effective September 1, 2015, these provisions no longer apply to aircraft.

However, receipts from the following items (termed “accessories”) are not exempt with respect to a general aviation aircraft:

• Items of décor (paintings or other artwork)
• Tableware, glassware or cookware
• Small appliances
• Linens, pillows, or towels
• Other ancillary property

Regarding timing, the exemption applies generally to sales or uses occurring on or after September 1, 2015.  For the transition period, the exemption applies to sales made prior to September 1 if the purchaser takes delivery on or after that date, and applies to leases entered into before September 1 to the extent of the lease term beyond that date.