Sales Tax Articles
Sales Tax State Activity Update - January 2005
Installation Services Performed on Aircraft Exempt in New York
In recently signed tax legislation, Section 1115(dd) was added, exempting from state and local use tax, the services of installing tangible personal property in aircraft and maintaining, servicing or repairing an aircraft. The exemption is also extended to the person providing the exempt services provided the property becomes a physical component of the aircraft. Lubricants applied to aircraft are now exempt.
Regulation 527.5(a) (3) provides that maintaining, servicing and repairing means keeping tangible personal property in a condition of fitness, efficiency, readiness or safety or restoring it to such a condition.
Examples of exempt services include but are no limited to the following:
- Cleaning, repairing or replacing upholstery of seating, walls, etc.
- Painting and repairing the interior or exterior of aircraft
- Interior and exterior cleaning of aircraft, including ordinary janitorial services such as,dusting, cleaning and washing of walls, floors and windows
- Mechanical services
- Ramp services to aircraft, such as emptying lavatories and de-icing, and
- Operating tugs to tow an aircraft or operating other equipment to provide maintenance
- Service or repair to the aircraft
Exempt items (provided they are purchased by the person who performs the exempt service to aircraft, and the item becomes a physical component part of the aircraft) include, but are not limited to:
- Machinery and equipment installed on the aircraft
- Engine parts
- Waxing and polishing agents
- Headsets that are hardwired into the aircraft and plug-in headsets used by the flight crew
- Paint
- Light bulbs
- Cloth and other material purchased to repair or replace upholstery of seating, walls, etc
In addition the service of storing or providing parking for an aircraft is exempt.
The above changes are effective December 1, 2004, and are due to expire on December 1, 2009.
For more information on this subject please click here.
(New York Office of Tax Policy analysis Technical services Division, TSB-M-04(8)S
Sales Tax, 12/03/2004)
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