West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-15K - Aircraft Operated Under A Fractional Ownership Program
Section 110-15K-2 - Definitions

Universal Citation: 110 WV Code of State Rules 110-15K-2

Current through Register Vol. XLI, No. 38, September 20, 2024

2.1. Terms used in this legislative rule or in the administration and enforcement of the sales tax exemption authorized by §11-15-9p of this code, and not otherwise defined in this rule or §11-15-1, et seq., §11-15A-1, et seq., or §11-15B-1, et seq. of the West Virginia Code, shall have the meanings ascribed to them in Subpart K of 14 C.F.R. 91, as amended, related to Fractional Ownership Operations.

2.2. As used in this rule:

2.2.a. "Affiliate" of a program manager means a manager that, directly, or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, another program manager. The holding of at least forty percent (40 percent) of the equity and forty percent (40 percent) of the voting power of an entity will be presumed to constitute control for purposes of determining an affiliation under this Rule.

2.2.b. "Directly used or consumed," in the context of repair, remodeling or maintenance of aircraft, aircraft engines or aircraft component parts for an aircraft operated under a fractional ownership program, shall mean used or consumed in those activities which constitute an integral and essential part of such activities, as contrasted with and distinguished from those activities which are simply incidental, convenient or remote to such activities.
2.2.b.1. Sales of machinery, tools or equipment directly used or consumed exclusively in the repair, remodeling or maintenance of aircraft, aircraft engines or aircraft component parts for an aircraft operated under a fractional ownership program shall include only:
2.2.b.1.A. Machinery, tools or equipment physically incorporated into the finished aircraft operated under a fractional ownership program, or physically incorporated into the finished aircraft engine or aircraft component part on an aircraft operated under a fractional ownership program, as a result of repair, remodeling or maintenance activities;

2.2.b.1.B. Machinery, tools or equipment used exclusively for repairing, remodeling or maintaining aircraft operated under a fractional ownership program; or

2.2.b.1.C. Machinery, tools or equipment used exclusively for repairing, remodeling or maintaining aircraft operated under a fractional ownership program and aircraft that qualifies for the exemption under §11-15-9(a)(33) of the West Virginia Code.

2.2.c. A "dry-lease aircraft exchange" means an arrangement, documented by the written program agreements, under which the program aircraft are available, on an as-needed basis without crew, to each fractional owner, as provided in Subpart K of 14 C.F.R. 91, as amended.

2.2.d. A "fractional owner" or "owner" means an individual or entity that possesses a minimum fractional ownership interest in a program aircraft and that has entered into the applicable program agreements; provided, however, that in the case of the flight operations described in paragraph 2.2.g.3of this rule, and solely for purposes of requirements pertaining to those flight operations, the fractional owner operating the aircraft will be deemed to be a fractional owner in the program managed by the affiliate.

2.2.e. A "fractional ownership interest" means the ownership of an interest or holding of a multi-year leasehold interest or a multi-year leasehold interest that is convertible into an ownership interest in a program aircraft.

2.2.f. A "fractional ownership program" means any system of aircraft ownership and exchange that consists of all of the following:
2.2.f.1. The provision of fractional ownership program management services by a single fractional ownership program manager on behalf of the fractional owners;

2.2.f.2. Two or more airworthy aircraft;

2.2.f.3. One or more fractional owners per program aircraft, with at least one program aircraft having more than one owner;

2.2.f.4. Possession of at least a minimum fractional ownership interest in one or more program aircraft by each fractional owner;

2.2.f.5. A dry-lease aircraft exchange arrangement among all of the fractional owners; and

2.2.f.6. Multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program.

2.2.g. A "fractional ownership program aircraft" or "program aircraft" means:
2.2.g.1. An aircraft in which a fractional owner has a minimal fractional ownership interest and that has been included in the dry-lease aircraft exchange pursuant to the program agreements;

2.2.g.2. An aircraft owned in whole or in part by the program manager that has been included in the dry-lease aircraft exchange and is used to supplement program operations, or

2.2.g.3. In the case of a fractional owner from one program operating an aircraft in a different fractional ownership program managed by an affiliate of the operating owner's program manager, the aircraft being operated by the fractional owner, so long as the aircraft is:
2.2.g.3.A. Included in the fractional ownership program managed by the affiliate of the operating owner's program manager, and

2.2.g.3.B. Included in the operating owner's program's dry-lease aircraft exchange pursuant to the program agreements of the operating owner's program.

2.2.h. "Fractional ownership program management services" or "program management services" mean administrative and aviation support services furnished in accordance with the applicable requirements of Subpart K of 14 C.F.R. 91, as amended, or provided by the program manager on behalf of the fractional owners, including, but not limited to:
2.2.h.1. Establishment and implementation of program safety guidelines;

2.2.h.2. Employment, furnishing, or contracting of pilots and other crewmembers;

2.2.h.3. Training and qualification of pilots and other crewmembers and personnel;

2.2.h.4. Scheduling and coordination of the program aircraft and crews;

2.2.h.5. Maintenance of program aircraft;

2.2.h.6. Satisfaction of recordkeeping requirements;

2.2.h.7. Development and use of a program operations manual and procedures; and

2.2.h.8. Application for and maintenance of management specifications and other authorizations and approvals.

2.2.i. A "minimum fractional ownership interest" means:
2.2.i.1. A fractional ownership interest equal to, or greater than, one-sixteenth (1/16) of at least one subsonic, fixed-wing or powered-lift program aircraft; or

2.2.i.2. A fractional ownership interest equal to, or greater than, one-thirty-second (1/32) of at least one rotorcraft program aircraft.

2.2.j. "Person" includes any state, and its political subdivisions or an agency of either, the State of West Virginia and its political subdivisions or an agency of either, and any individual, firm, partnership, joint venture, joint stock company, the government of the United States and its agencies, any public or private corporation, municipal corporation, cooperative, estate, trust, business trust, receiver, executor, administrator, any other fiduciary, any representative appointed by order of any court or otherwise acting on behalf of others, or any other group or combination acting as a unit, and the plural as well as the singular number of the entities here enumerated.

2.2.k. "Tax Commissioner" or "Commissioner" means the State Tax Commissioner of West Virginia or his or her delegate.

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