S.B. No. 1396
 
 
 
 
AN ACT
  relating to the sales and use taxation of aircraft.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle E, Title 2, Tax Code, is amended by
  adding Chapter 163 to read as follows:
  CHAPTER 163. SALES AND USE TAXATION OF AIRCRAFT
         Sec. 163.001.  CERTIFICATED OR LICENSED CARRIERS. (a)  For
  purposes of Chapter 151, "certificated or licensed carrier" means a
  person authorized by the Federal Aviation Administration to operate
  an aircraft to transport persons or property in compliance with the
  certification and operations specifications requirements of 14
  C.F.R. Part 121, 125, 133, or 135.
         (b)  Section 151.328(a)(1) applies with respect to a
  certificated carrier's acquisition of an aircraft, without regard
  to whether the certificated carrier acquired the aircraft by
  purchase, lease, or rental.
         Sec. 163.002.  RESALE OF AIRCRAFT. (a)  For purposes of
  Section 151.006, "sale for resale" includes the sale of an aircraft
  to a purchaser who acquires the aircraft for the purpose of leasing,
  renting, or reselling the aircraft to another person in the United
  States of America or a possession or territory of the United States
  of America or in the United Mexican States in the form or condition
  in which it is acquired.
         (b)  The leasing or renting of an aircraft under Subsection
  (a) includes the transfer of operational control of the aircraft
  from a lessor to one or more lessees pursuant to one or more written
  agreements in exchange for consideration, regardless of whether the
  consideration is in the form of a cash payment and regardless of
  whether the consideration is fixed, variable, or periodic.  For
  purposes of this subsection, "operational control" has the meaning
  assigned by the Federal Aviation Regulations and includes the
  exercise of authority over initiating, conducting, or terminating a
  flight.
         (c)  Subsection (a) applies to a purchase of an aircraft
  regardless of whether the purchaser, in addition to leasing,
  renting, or reselling the aircraft to another person, also uses the
  aircraft if, for a period of one year beginning on the date the
  purchaser purchases the aircraft, more than 50 percent of the
  aircraft's departures are made under the operational control of one
  or more lessees pursuant to one or more written agreements as
  described by Subsection (b).
         (d)  Section 151.154(a) does not apply to a purchaser of an
  aircraft.
         Sec. 163.003.  USE OF AIRCRAFT. For purposes of the tax
  imposed under Subchapter D, Chapter 151, an aircraft that is
  brought into this state for the sole purpose of being completed,
  repaired, remodeled, or restored is not brought into the state for
  storage, use, or other consumption in this state.
         Sec. 163.004.  NO PRESUMPTION OF USE. For purposes of the
  tax imposed under Subchapter D, Chapter 151, there is no
  presumption that an aircraft was purchased for storage, use, or
  consumption in this state if the person bringing the aircraft into
  this state did not acquire the aircraft directly from a seller by
  means of a purchase, as that term is defined by Section 151.005.
         Sec. 163.005.  NO IMPOSITION OF TAX FOLLOWING OUT-OF-STATE
  USE. (a)  No tax is imposed under Subchapter D, Chapter 151, with
  respect to an aircraft that is brought into this state if the
  aircraft is predominantly used outside of this state for a period of
  one year beginning on the later of:
               (1)  the date the aircraft was acquired, whether by
  purchase, lease, rental, or otherwise, by the person bringing the
  aircraft into this state; or
               (2)  the date the aircraft:
                     (A)  was substantially complete in the condition
  for its intended use; and
                     (B)  conducted its first flight for the carriage
  of persons or property.
         (b)  For purposes of this section, an aircraft is
  predominantly used outside of this state if more than 50 percent of
  the aircraft's departures are from locations outside of this state.
         Sec. 163.006.  CERTAIN TRANSACTIONS BETWEEN RELATED
  PERSONS. (a)  For purposes of the tax imposed under Chapter 151, a
  sale, lease, rental, or other transaction between a person and a
  member, owner, or affiliate of the person involving an aircraft
  that would not be subject to tax or would qualify for an exemption
  from tax if the transaction were between unrelated persons remains
  not subject to tax or exempt from tax to the same extent as if the
  transaction were between unrelated persons.
         (b)  No tax is imposed under Chapter 151 with respect to the
  use of an aircraft by an owner or member of the purchaser of the
  aircraft, by an entity that is an affiliate of the purchaser of the
  aircraft, or by an owner or member of an affiliate of the purchaser
  of the aircraft if:
               (1)  with respect to the purchase of the aircraft, the
  purchaser paid the tax imposed under Chapter 151; or
               (2)  the purchaser's purchase of the aircraft was
  exempt from the tax imposed under Chapter 151, other than under:
                     (A)  Section 151.302; or
                     (B)  Section 151.304, unless the purchase would
  have been exempt from tax under Section 151.304 if the owner,
  member, affiliate, or owner or member of the affiliate who is using
  the aircraft had been the purchaser.
         (c)  For purposes of this section, the term "affiliate" means
  an entity that would be classified as a member of the purchaser's
  affiliated group under Section 171.0001.
         Sec. 163.007.  AIRCRAFT OPERATED UNDER FRACTIONAL OWNERSHIP
  PROGRAMS. No tax is imposed under Chapter 151 with respect to the
  purchase, sale, or use of an aircraft that is operated pursuant to
  14 C.F.R. Part 91, Subpart K.
         Sec. 163.008.  NO IMPOSITION OF TAX UNDER THIS CHAPTER.
  Nothing in this chapter shall be construed to impose a tax.
         Sec. 163.009.  CONFLICTS WITH OTHER LAW. This chapter
  controls over Chapter 151 to the extent of any conflict.
         SECTION 2.  This Act takes effect September 1, 2015.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1396 passed the Senate on
  May 6, 2015, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1396 passed the House on
  May 24, 2015, by the following vote:  Yeas 141, Nays 0, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor