An aircraft is considered tangible personal property and is taxable as a retail or wholesale transaction by the seller depending upon the use of the aircraft by the purchaser. The sale of an aircraft, which is directly consumed or used by the purchaser, in the conduct of any trade or business which is subject to tax under Part III of Title 30 of the Delaware Code is deemed to be a wholesale sale. Part III of Title 30 provides for licensing of most business activities including occupational, contractors, manufacturers, retailers, wholesalers, motor vehicle dealers and lessors of tangible personal property.

Effective February 1, 2003 the gross receipts received from the sale of aircraft having a certified takeoff weight of 12,500 pound or more are exempt from retail and wholesale gross receipt taxes. "Certified takeoff weight" means the maximum weight contained in the type certificate or airworthiness certificate.

A buyer may take title and possession of an aircraft in Delaware without incurring a direct tax liability on the purchase. There are no direct taxes on the purchase of tangible personal property in the State.

Traditional Due Process and Commerce Clause tests are applied to the seller to determine if the transaction is taxable to the seller. The sale of inventory, in this case an aircraft, is a taxable event for the seller unless the transaction is an isolated event by the seller or if the seller is not primarily engaged in the business of selling aircraft.

Sales tax exemption certificates (reseller certificates) are issued by states that impose sales taxes to permit the purchaser to purchase goods for resale without paying a sales tax on the transaction.

There are no state or local sales taxes in Delaware and as such, sales tax exemption certificates are not applicable to Delaware. Delaware imposes license and gross receipt taxes on the sale of most goods and services. These fees are imposed on the seller or service provider and may not be passed on the consumer. Sales for resale are not exempt. There are a limited number of exemptions from these fees and taxes. Visit our website and select "Business Tax Information" from the main menu to get additional information on this topic. The address is http://www.revenue.delaware.gov.