Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) AIR TAXIS. An aircraft whose owner on the
lien date used it in scheduled air taxi service at any time during the 12-month
period from January 1 through December 31 of the previous year immediately
preceding the lien date, or which has been purchased for scheduled air taxi
service but not yet put into such service and not yet used in any other
service, is assessable under sections
1150
to
1157
of the Revenue and Taxation Code and not under Part 10, Division 1, or under
other situs provisions of Part 2, Division 1, of the Revenue and Taxation
Code.
(b) SITUS. Aircraft of United
States registry operated by certificated air carriers (within the meaning of
section
1150
of the Revenue and Taxation Code) or scheduled air taxis (within the meaning of
subdivisions (a) and (b) of section
1154
of the Revenue and Taxation Code) and flown in intrastate, interstate, or
foreign commerce shall be deemed to be situated only in those taxing agencies
(within the meaning of section
404
of the Revenue and Taxation Code) in which the aircraft normally make physical
contact. The physical contact must be intentional rather than by accident or as
the result of an emergency, and it must involve embarking or disembarking of
crew, passengers, or freight.
(1) Aircraft
flying over the state without landing do not acquire situs for property tax
purposes. Conversely, the situs of aircraft that depart from a taxing agency
within the state, fly out of the state, and return to the same or another
taxing agency within the state without landing outside the state is within the
state's taxing jurisdiction throughout the flight.
(2) Situs for property tax purposes is not
affected by the legal or commercial domicile of the operator of the aircraft,
except that foreign-owned and -based aircraft operated solely in foreign
commerce do not acquire a situs within the state for property tax
purposes.
(c) ALLOCATION
FORMULA. The allocation formula to be used by each assessor is the
proportionate amount of time, both in the air and on the ground, that
certificated aircraft have spent within the state during the 12-month period
from January 1 through December 31 of the previous year immediately preceding
the lien date as compared to the total time during that 12-month period.
(1) Time in the air consists of flight time
and taxi time within California's borders.
(A) Time in the air shall be based on the
State Board of Equalization's "California Standard Flight Times" table in the
most recently published Letter To Assessors that address intrastate and
interstate standard flight times.
(B) These standard times shall be multiplied
by the number of departures to and from the airports listed in the Letter To
Assessors.
(C) Absence of a flight
on the State Board of Equalization's "California Standard Flight Times" table
in the most recently published Letter To Assessors that addresses intrastate
and interstate standard flight times does not preclude the inclusion of that
flight in the allocation formula.
(D) Commercial air carriers shall notify, in
writing, the lead county for that air carrier of any missing flights not listed
in the "California Standard Flight Times" table in the most recently published
Letter To Assessors that address intrastate and interstate standard flight
times.
(2) Time on the
ground is all time in the state that is not flight or taxi time.
(A) Time on the ground at each airport shall
be reported on a summary basis by fleet type pursuant to subdivision (m) of
section
441
of the Revenue and Taxation Code.
(B) Time on ground allocated to heavy
maintenance that requires a certificated aircraft or scheduled air taxi to be
removed from revenue service shall be excluded.
i. An air carrier claiming such exclusion
shall identify such maintenance and supply sufficient documentation that will
enable the assessor to confirm the amount of time the aircraft was not in
revenue service.
ii. Routine line
maintenance that does not require removal from revenue service shall not be
excluded from time allocable to the airport.
(3) Time allocable to each airport is the
amount of time a certificated aircraft or scheduled air taxi is on the ground
at the airport computed pursuant to subdivision (c)(2) of this rule, plus the
portion of incoming and outgoing flight time computed pursuant to subdivision
(c)(1) of this rule.
(4) All time,
both in the air and on the ground, that certificated aircraft have spent within
the state prior to the aircraft's first entry into the revenue service of the
air carrier in control of the aircraft on the current lien date shall be
excluded from the time-in-state factor.
(d) ALLOCATION OF FLIGHT TIME. For aircraft
flying from one California airport to another California airport, the flight
time attributable to each airport is one-half the flight time between the
airports. For aircraft arriving from an airport outside the state or leaving
for an airport outside the state, the flight time from or to the state boundary
shall be allocated to the California airport in which the aircraft first lands
or last takes off, as the case may be. The flight time to the state boundary
shall be computed as follows:
(1) determine
the mileage from the airport to the state boundary crossing point on a great
circle flight to the first landing point outside the state;
(2) divide this mileage by the total great
circle mileage from the airport to the first landing point outside the
state;
(3) multiply this percentage
by the total flight time from the airport to the first landing point outside
the state. The same procedure shall be used for inbound flights from outside
the state. To allow for differences in takeoff, landing, and cruising speeds
and for varying take-off and landing patterns, the time allocated to an airport
shall not be less than five minutes for an incoming or an outgoing flight. In
lieu of the actual flight time for a single flight, the average flight time
between two ports, or between a port and the state line, for two or more
flights of a single carrier or of more than one carrier shall be used when such
an average is promulgated by the board unless the assessor has documented
evidence which justifies departure from such average time.
(e) SOURCES OF ALLOCATION DATA. For all
operations, including, but not limited to, overhaul, pilot training, charter,
military contract flights, and standby services, ground time and departures
shall be derived from the carrier's recorded operations.
(f) LEAD COUNTY ASSESSOR'S OFFICE.
(1) After consulting with commercial air
carriers in the state, the Aircraft Advisory Subcommittee of the California
Assessors' Association shall do both of the following:
(A) On or before March 1, 2020 and on or
before each March 1 thereafter, designate a lead county assessor's office for
each commercial air carrier operating certificated aircraft in
California.
(B) Every third year
thereafter, redesignate a lead county assessor's office for each of these air
carriers, unless an air carrier and its existing lead county assessor's office
concur to waive this redesignation.
(2) The lead county assessor's office shall
do all of the following:
(A) Calculate an
unallocated value of the certificated aircraft of each commercial air carrier
to which that assessor is designated.
(B) Electronically transmit to the assessor
of each county in which the property described in subdivision (f)(1) of this
rule has situs for the assessment year the values determined by the lead county
assessor's office under subdivision (f)(1) of this rule.
(C) Receive the property statement, as
described in subdivision (m) of section
441
of the Revenue and Taxation Code, of each commercial air carrier to which the
assessor is designated.
(D) Receive
and electronically transmit to the assessor of each affected county flight data
received pursuant to paragraph (3) of subdivision (m) of section
441
of the Revenue and Taxation Code.
(E) Lead the audit team described in
subdivision (f)(4) of this rule when that team is conducting an audit of a
commercial air carrier to which the assessor is designated.
(F) Notify, in writing, each commercial air
carrier for which the assessor has been designated of this designation on or
before the first March 15 that follows that designation.
(G) Notify, in writing, the State Board of
Equalization, of any missing flights not listed in the "California Standard
Flight Times" table in the most recently published Letter To Assessors that
addresses intrastate and interstate standard flight times.
(3) The county assessor of each county in
which the personal property of a commercial air carrier has situs for an
assessment year is solely responsible for assessing that property, applying the
allocation formula set forth above and enrolling the value of the property in
that county, but, in determining the allocated fleet value for each make,
model, and series of certificated aircraft of a commercial air carrier, the
assessor may consult with the lead county assessor's office designated for that
commercial carrier.
(4) An audit of
a commercial air carrier shall be conducted once every four years on a
centralized basis by an audit team of auditor-appraisers from one to three
counties, as determined by the Aircraft Advisory Subcommittee of the California
Assessors' Association. Such audit shall encompass all of the California
Personal Property and fixtures of the air carrier and is deemed to be made on
behalf of each county for which an audit would otherwise be required under
section
469
of the Revenue and Taxation Code.
(A) The
audit team shall be the point of contact for all aircraft-related questions to
or from each county and the commercial air carrier.
(B) The audit team shall also ensure that all
aircraft-related concerns regarding the taxable value of the aircraft and
aircraft parts are resolved with each county before finalizing the
audit.
(g)
APPLICATION OF ALLOCATION FORMULA. The aircraft of certificated air carriers
and scheduled air taxi operators shall be segregated by subfleet type, and a
separate allocation ratio shall be computed for each subfleet type that has
established a taxable situs within the state, excluding those makes within a
type that have not established a taxable situs within the state. Each
allocation ratio shall then be applied to the total value of the carrier's
aircraft of each subfleet type to which the allocation ratio applies.
1. Amendment
filed 2-24-70; effective thirtieth day thereafter (Register 70, No. 9). For
prior history, see Register 69, No. 50.
2. New (g)(4)(F) filed
12-20-71; effective thirtieth day thereafter (Register 71, No.
52).
3. Amendment of subsection (c) filed 2-26-74 as an emergency;
effective upon filing. Certificate of Compliance included (Register 74, No.
9).
4. Amendment of subsection (e) filed 12-26-75; effective
thirtieth day thereafter (Register 75, No. 52).
5. Amendment of NOTE
filed 10-26-77; effective thirtieth day thereafter (Register 77, No.
44).
6. Amendment filed 10-20-80; effective thirtieth day thereafter
(Register 80, No. 43).
7. Amendment filed 1-11-83; effective
thirtieth day thereafter (Register 83, No. 3).
8. Editorial
correction of subsection (g)(4) filed 3-15-83 (Register 83, No.
12).
9. Editorial correction of subsection (c) filed 10-31-83
(Register 83, No. 45).
10. Amendment filed 5-13-98; operative
6-12-98 (Register 98, No. 20).
11. Amendment of section and NOTE
filed 12-26-2019 as an emergency; operative 1-1-2020 (Register 2019, No. 52). A
Certificate of Compliance must be transmitted to OAL by 6-29-2020 or emergency
language will be repealed by operation of law on the following
day.
12. Emergency filed 12-26-2019 extended 60 days pursuant to
Executive Order N-40-20 and an additional 60 days pursuant to Executive Order
N-66-20. A Certificate of Compliance must be transmitted to OAL by 10-27-2020
or emergency language will be repealed by operation of law on the following
day.
13. Amendment of section and NOTE refiled with further
amendments 8-31-2020 as an emergency; operative 10-27-2020. Emergency
expiration extended 60 days (Executive Order N-40-20) plus an additional 60
days (Executive Order N-66-20) (Register 2020, No. 36). A Certificate of
Compliance must be transmitted to OAL by 5-25-2021 or emergency language will
be repealed by operation of law on the following day.
14.
Certificate of Compliance as to 8-31-2020 order, including amendment of NOTE,
transmitted to OAL 5-6-2021 and filed 6-16-2021; amendments operative 6-16-2021
pursuant to Government Code section
11343.4(b)(3)
(Register 2021, No. 25).
Note: Authority cited: Section
15606,
Government Code. Reference: Sections
1150,
1151,
1152,
1153.5,
1154,
1155,
1156
and
1157,
Revenue and Taxation Code.
