Four individuals who owned an aircraft together formed an LLC and inquired as to whether transferring the aircraft title to their LLC would constitute a taxable sale for sales/use tax purposes. The taxpayers noted that they paid sales tax at the time they originally purchased the aircraft. The Department responded that aircraft use tax is imposed on any aircraft acquired by gift, transfer, or purchase, though the tax is not applicable if the use is otherwise taxed under the Use Tax Act. Thus, the transfer of an aircraft from individual owners to the LLC would be a taxable event because the aircraft is being transferred from one legal entity to another. Illinois Dep’t of Rev. General Information Letter No. ST 12-0062-GIL (Dec. 20, 2012).

Co-author - Patrick Smith, Director Baker Tilly Virchow Krause, LLP

Mr. Ely is a partner and Messrs. Thistle and Rhyne are associates with the multistate law firm of Bradley Arant Boult Cummings LLP in its Birmingham, Alabama office. Mr. Ely is Chair of the firm’s State & Local Tax Practice Group. Messrs. Ely, Thistle, and Rhyne co-author a chapter on the state taxation of PTEs in the treatise “Keatinge, Conaway and Ely on Choice of Business Entity” (West). Mr. Smith is the Tax Director at Baker Tilly Virchow Krause, LLP and is head of State & Local Tax Services for the firm’s Chicago office. Mr. Smith is a co-author of “State Taxation of Pass-Through Entities and Their Owners,” a treatise published by Warren Gorham and Lamont/West since 2005. Messrs. Ely and Smith have co-presented on this topic at NYU’s Institute on Federal Taxation, as have Messrs. Thistle and Smith for a webinar hosted by Strafford Publications in early June.