Operators of Bombardier jets are dismayed because they now have to pay state sales taxes on parts purchased through Bombardier’s Smart Parts program. Several operators who spoke to AIN on condition of anonymity said one of the primary reasons they participate in Smart Parts is to control and budget annual operating costs. “This adds a new dimension to overhead we didn’t budget for 2010,” one said.
State Board of Equalization
Although some operators expressed concern because Bombardier has begun charging sales tax for parts covered under its Smart Parts program, this is a fairly normal requirement, according to tax expert Nel Stubbs, vice president of Conklin & de Decker. “If an aircraft is based in a state that has a sales/use tax,” she explained, “and the part is brought into that state and installed on an aircraft, that state’s tax rules apply.
California has amended its aircraft sales and use tax law, essentially closing a loophole that allowed buyers of aircraft and other big-ticket items to escape paying sales taxes.