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SC
REVENUE RULING # 97-12
SUBJECT:
Aviation Gasoline (Sales and Use)
EFFECTIVE DATE:
Applies to all periods open under the statute.
SUPERSEDES:
All previous documents and any oral directives in conflict
herewith.
REFERENCES:
S. C. Code Ann. Section 55-5-280, S. C. Code Ann. Section
12-36-2120(9)(d), S. C. Code Ann. Section 12-36-2120(15)(a), S.
C. Code Ann. Section 55-5-20(12), S. C. Code Ann. Section
12-28-710(16)
AUTHORITY:
S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure
#94-1
SCOPE: A Revenue Ruling
is the Department of Revenue's official advisory opinion of how
laws administered by the Department are to be applied to a
specific issue or a specific set of facts, and is provided as
guidance for all persons or a particular group. It is valid and
remains in effect until superseded or modified by a change in the
statute or regulations or a subsequent court decision, Revenue
Ruling or Revenue Procedure.
Question(s):
Code Section 55-5-280
provides that "the tax on aviation gasoline" is to be
credited to the State Aviation Fund. The following questions have
arisen concerning the phrase "the tax on aviation
gasoline":
1. What is "the
tax" referred to in the phrase?
2. What is
"aviation gasoline"?
3. Is the tax on jet
fuel and motor vehicle gasoline used in airplanes to be credited
to the State Aviation Fund?
Conclusion(s):
1. "The
tax[es]" on aviation gasoline are the sales and use taxes.
2. "Aviation
gasoline" is gasoline which meets the specifications
contained in the "Manual on Significant Tests for Petroleum
Products: 5th Edition" published by the American Society of
Testing and Materials ("ASTM Manual").
3. The sales and use
taxes imposed on sales of jet fuel and motor vehicle gasoline
used in airplanes are not to be credited to the State Aviation
Fund.
Facts:
Code Section 55-5-280
reads:
All moneys
received from licensing of airports, landing fields or
air schools, the tax on aviation gasoline and fees
for other licenses issued under this chapter shall be
paid into the State Treasury and credited to the fund
known as the ‘State aviation fund." (Emphasis
added.)
Code Section 55-5-290
provides that the moneys in the State Aviation Fund are to be
used for the necessary expenses of the Aeronautics Division of
the Department of Commerce.
The purpose of this
document is to address questions that have arisen concerning the
phrase "the tax on aviation gasoline."
Discussion:
We will first determine
the type of tax referred to in Code Section 55-5-280. Effective
July 1, 1955, the gasoline tax law was amended by adding the
following language:
Gasoline sold or
dispensed for use in aircraft shall not be subject to the
now existing gasoline tax, but shall be subject to the
retail sales and use tax.
At the same time, the
sales and use tax law was amended by adding the current language
which specifically states that gasoline used in aircraft is not
exempt from the sales and use taxes.
Therefore, "the
tax[es]" referred to in Section 55-5-280 are the sales and
use taxes. There are no other state taxes imposed on gasoline
used in aircraft.
As for the meaning of
the term "aviation gasoline," Section 55-5-20(12) of
The Uniform State Aeronautical Regulatory Law defines
"aviation gasoline" as "gasoline manufactured
exclusively for use in airplanes and sold for such
purposes." For a more complete definition of the term, we
look to the "Manual on Significant Tests for Petroleum
Products: 5th Edition," which is published by the American
Society of Testing and Materials ("ASTM"). This manual
contains the excepted standards for fuels, as well as other
products, and is used by the South Carolina Department of
Agriculture’s Laboratory Division to ensure that fuels sold
and used in South Carolina are in compliance with state
regulations.
Chapter 5 of the ASTM
Manual contains the specifications for aviation gasoline. Those
gasolines which meet the specifications contained therein are,
for purposes of Section 55-5-20(12), "aviation
gasoline." They are "manufactured exclusively for use
in airplanes and sold for such purposes."
We will now address
whether the sales and use taxes imposed on sales of jet fuel and
automotive gasoline used in airplanes are to be credited to the
State Aviation Fund.
There are two sections
in the sales and use tax law pertinent this issue - Section
12-36-2120(9)(d) and Section 12-36-2120(15)(a). Section
12-36-2120(9)(d) provides an exemption for "...fuel sold
to...transportation companies for the generation of motive power
for transportation" and Section 12-36-2120(15)(a) provides
that "gasoline used in aircraft is not exempt from the sales
and use tax." We will address the issue concerning jet fuel
and automotive gasoline, in light of these sections.
As for jet fuel, Chapter
5 of the ASTM Manual contains information and specifications for
"aviation turbine fuels" (i.e. "jet fuels").
As stated in the Manual, "aircraft gas-turbine engines
require a fuel with quite different properties from those for
aviation gasoline." In other words, jet fuel is not aviation
gasoline; therefore, the tax on sales of jet fuel is not to be
credited to the State Aviation Fund. NOTE: Section
12-36-2120(9)(d) exempts sales of fuel to transportation
companies. Therefore, sales of jet fuel to other than
transportation companies are subject to the sales and use taxes.
Lastly, we consider
automotive gasoline. As stated in Section 12-36-2120(15)(a),
sales of gasoline used in airplanes are taxable. Even though most
gasoline used in aircraft today is "aviation gasoline,"
as defined in the ASTM Manual, some aircraft still use automotive
gasoline. Because automotive gasoline is not manufactured
exclusively for use in airplanes - it may also be used in motor
vehicles - the sales and use taxes on sales of automotive
gasoline used in airplanes is not to be credited to the State
Aviation Fund.
NOTE: For answers to
technical questions concerning the specifications in the ASTM
Manual for aviation gasoline, jet fuel and automotive gasoline,
please contact:
Mr. Terry Wessinger,
Chemist I
South Carolina
Department of Agriculture - Petroleum Lab
(803) 737-9700
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