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    Subdivision 1. Requirements for registration. An aircraft must not be registered or licensed
in this state unless the applicant presents proof that the sales or use tax imposed by this chapter
has been paid or that the transaction is exempt from the sales and use tax. The exemption for an
occasional sale under section 297A.67, subdivision 23, or 297A.68, subdivision 25, does not
apply to the sale or purchase of an aircraft.
    Subd. 2. Payment of tax to dealer. If an aircraft is purchased from a dealer holding a
valid sales and use tax permit under this chapter, the applicant shall present proof that the tax
has been paid to the dealer.
    Subd. 3. Payment of tax. If an aircraft is purchased from a person who is not the holder
of a valid sales and use tax permit under this chapter, the purchaser shall pay the tax prior to
registering or licensing the aircraft in this state.
    Subd. 4. Exemptions. (a) The following transactions are exempt from the tax imposed in
this chapter to the extent provided.
(b) The purchase or use of aircraft previously registered in Minnesota by a corporation or
partnership is exempt if the transfer constitutes a transfer within the meaning of section 351 or
721 of the Internal Revenue Code.
(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer of an
aircraft for which a commercial use permit has been issued pursuant to section 360.654 is exempt,
if the aircraft is resold while the permit is in effect.
(d) Airflight equipment when sold to, or purchased, stored, used, or consumed by airline
companies, as defined in section 270.071, subdivision 4, is exempt. For purposes of this
subdivision, "airflight equipment" includes airplanes and parts necessary for the repair and
maintenance of such airflight equipment, and flight simulators, but does not include airplanes with
a gross weight of less than 30,000 pounds that are used on intermittent or irregularly timed flights.
(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined in section
360.511 and approved by the Federal Aviation Administration, and which the seller delivers to a
purchaser outside Minnesota or which, without intermediate use, is shipped or transported outside
Minnesota by the purchaser are exempt, but only if the purchaser is not a resident of Minnesota
and provided that the aircraft is not thereafter returned to a point within Minnesota, except in the
course of interstate commerce or isolated and occasional use, and will be registered in another
state or country upon its removal from Minnesota. This exemption applies even if the purchaser
takes possession of the aircraft in Minnesota and uses the aircraft in the state exclusively for
training purposes for a period not to exceed ten days prior to removing the aircraft from this state.
    Subd. 5. Exempt purchase certificate. If the purchase of an aircraft is exempt under this
chapter, the commissioner shall issue a certificate that no sales or use tax is due and owing in
respect to the transaction.
    Subd. 6. Sales and leases; tax treatment. (a) A sale of aircraft and parts for the repair
of aircraft purchased by a nonprofit, incorporated flying club or association utilized solely by
the corporation by leasing the aircraft to shareholders of the corporation is exempt as property
purchased for resale. The leasing of the aircraft to the shareholders by the flying club or
association is taxable as a retail sale.
(b) A lease of aircraft utilized by a lessee for leasing to others, whether or not the lessee also
utilizes the aircraft for charter service or for flight instruction if no separate charge is made for
aircraft rental, is exempt as a purchase for resale. However, a proportionate share of the lease
payment reflecting use for flight instruction or charter service is taxable under section 297A.63.
    Subd. 7. Agreement with commissioner of transportation. Notwithstanding subdivisions
1 to 4, the commissioner may enter into an agreement with the commissioner of transportation
whereby, upon approval of both commissioners, the commissioner of transportation will collect
the sales tax on aircraft from persons required to register or license aircraft in this state. For
purposes of collecting the tax, the commissioner of transportation shall act as agent of the
commissioner of revenue and shall be subject to all rules not inconsistent with the provisions of
this chapter, that may be prescribed by the commissioner.
History: 2000 c 418 art 1 s 26,44 subd 3; 2000 c 490 art 8 s 7; 1Sp2001 c 5 art 7 s 53,54