Purchase and Simultaneous Lease of Aircraft Not a Taxable Use When Aircraft Not Used or Stored in Michigan
In NACG Leasing v. Michigan Department of Treasury, Michigan Tax Tribunal, No. 338928, June 10, 2011the purchaser of an aircraft that was simultaneously leased to the purchaser's corporate affiliate was not liable for Michigan use tax because it never took physical possession of the aircraft and did not use or store it within the state.
At the time of the taxpayer's purchase of the aircraft, the lessee was already in possession of the aircraft, given to it by the previous owner under the terms of the letter of intent. In addition to lacking physical possession of the aircraft, the taxpayer did not at any time take responsibility for repair and maintenance, insurance, the benefit of warranties, or options for use of the aircraft.