Tennessee Court Rules Aircraft Purchase and Lease Qualifies As Exempt Sale for Resale
State and Local Tax Alert - Tennesee Edition
In a much-anticipated decision on the tax exemption for aircraft sales and purchases, a Tennessee trial court has ruled that a taxpayer's purchase of an aircraft outside the state and subsequent transportation into the state is exempt from Tennessee use tax as a sale for resale when the aircraft was leased to a third party. In this case the aircraft was leased to an affiliate of the taxpayer. CAO Holdings Inc. v. Roberts, Davidson County, Tennessee, Chancery Court Dkt. No. 06-719-II (Sept. 29, 2011).
The case was tried on remand after the Tennessee Supreme Court reversed a summary judgment ruling in favor of the taxpayer by the trial court that had been affirmed by the Tennessee Court of Appeals. CAO Holdings, Inc. v. Chumley, No. M20081679COAR3CV, 2009 WL 1492230 (Tenn. Ct. App. 2009). The Supreme Court found that there were genuine issues of material fact precluding summary judgment as a matter of law and remanded the case for trial on these merits. CAO Holdings, Inc. v. Trost, 333 S.W.3d 73 (Tenn. 2010).
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