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Illinois circuit court holds fractional ownership of aircraft subject to use tax

In a case of first impression in Illinois, a circuit court determined that the holding of a fractional ownership interest in an aircraft was subject to use tax. The court determined that the company holding the ownership interest in the aircraft purchased tangible personal property at retail from a retailer. Based on the court’s assessment of the substance of the transaction, the company had rights or powers over the aircraft that were incident to the ownership of an aircraft. Furthermore, in the court’s estimation, the aircraft was sufficiently present in Illinois to establish substantial nexus between Illinois and the aircraft.

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