THE INFORMATION IN THIS WEB PAGE IS NOT, NOR IS IT INTENDED TO BE, TAX OR LEGAL ADVICE. ANY CUSTOMER WISHING TO BE TAX EXEMPT FOR THEIR PURCHASES FROM AVIALL SHOULD CONSULT WITH THEIR RESPECTIVE TAX ADVISORS FOR TAXABILITY OF ITS PURCHASES FOR SHIPMENT TO THE RELEVANT STATES.
Tax Exemption Information & Forms: Click Here
Aviall is a leading provider of aircraft parts, supplies, chemicals, tools, and materials, and offers more than 2 million aircraft parts for sale both domestically and internationally. Since Aviall is making sales of taxable property, we are required to register to collect sales tax in any state in which we maintain a substantial physical presence. When Aviall makes a sale in a state where it is registered with, we are required to collect sales tax on any order delivered to that state unless a valid exemption is applied or applicable to the purchasing entity or the nature of item sold.
Q- What are Common Types of Exemptions from Sales Tax?
There are generally three common types of exemptions from taxable sales of products and goods:
- Exempt Products. These are goods such as medicines, services, intangibles and other items that are generally exempt and do not require any form of exemption documentation.
- Exemption for Use. If goods purchased are to be resold in the same form in which they are purchased they may qualify for a resale exemption. Alternately, if goods are processed (or incorporated into other goods) prior to resale, they too can be exempt from sales tax.
- Exempt Purchasers. Goods that are sold to the federal government cannot be taxed. Similar exemptions are also often available to state and local governments and agencies - as well as non-profit organizations or other recognized charitable, religious or educational groups.
Q – What is a Resale Exemption?
The most common exemption is a “resale exemption”. Goods purchased to be resold in the same form in which they are purchased qualify for a resale exemption (which removes the requirement to pay sales tax) assuming that the reseller is licensed and can provide a resale certificate (for the ship-to state). A state can only collect sales tax once for any taxable purchase, and so when that reseller later sells the goods, they are required to collect sales tax on the full selling price of the product. Once a reseller has registered to collect sales tax, and has received a sales tax registration number, that number can be used to complete a resale certificate which can then be provided to suppliers such as Aviall. States that allow for resale exemptions either accept a state issued resale certificate or, in some cases, a multi-state certificate. Multi-State Sales Tax Exemption Certificates can be accessed on the links provided in this page.
Many states also allow "blanket" resale certificates for wholesalers who deal largely in resale transactions, often to regular clients who may make numerous and/or repeat purchases throughout the year. Basically a blanket certificate is a document kept on file which applies to multiple purchases from a single customer. Aviall accepts blanket certificates from its regular customers. A copy for the basic exemption certificate is provided in this page for Aviall’s customers’ convenience.
Q – Are Drop Shipments Taxable?
Generally, if a seller such as Aviall has nexus in a state and has registered to collect sales tax in that “ship to” state, we are required to collect sales tax on all taxable sales delivered into that state. Drop ship transactions differ somewhat in that the purchase by the retailer or purchaser (from the product supplier/shipper or Aviall) is in effect a purchase for resale, which is normally exempt from sales tax. However, as often, when the retailer or purchaser is not registered in the ship-to state but the supplier/shipper (Aviall) is. In such cases, Aviall is obligated to collect tax from the retailer on the drop ship transaction unless the retailer can provide valid exemption documentation that is deemed acceptable by the ship-to state.
Q – What are Streamlined States?
Currently, twenty-four states have adopted the Streamlined Sales and Use Tax Agreement. The purpose of the Agreement is to simplify sales and use tax administration to reduce the burden of tax compliance.
One way the streamlined states simplify compliance is by adopting the use of the Streamlined (SL) exemption certificate in all the member states. The member states are AL, AR, GA, IN, IA, KS, KY, MI, MN, NE, NV, NJ, NC, ND, OH, OK, RI, SD, UT, VE, WA, WV, WI, WY.
A purchaser can complete the SL exemption certificate with the sales registration number from their home state regardless of registration in the streamlined state. This can help with the exemption of Drop-shipment sales.
A blank streamlined certificate is available in each state where the form is accepted.
Q – What are Exemptions for Manufacturers?
If you purchase materials and products from Aviall, for incorporation into an end product (or other processing) prior to resale, you may be viewed as a manufacturer or processor rather than a reseller, and therefore qualify for a manufacturing exemption. In some states, machinery and equipment used in the manufacturing process is also exempt from tax. In this case, the manufacturer would issue an exemption certificate to Aviall when they purchase qualifying items claiming the manufacturing exemption. For exemption certificates, forms, rules and procedures vary by state and within a state by the type of exemption. It is very important to review and evaluate the rules that apply for the type of exemption being claimed and the purchaser should consult with its own sales and use tax advisors.
Q – Who Has the Burden of Proving an Exemption from Sales Tax?
It is the purchaser's responsibility to adequately prove that they meet the exemption requirements for that purchase, and must provide to Aviall, in the form of an exemption certificate which meets that state's requirements. Aviall must collect and retain (and file) a copy of the purchaser's exemption documentation to substantiate the exemption as without the documentation, the sale is deemed taxable.
Q – What Constitutes a Valid Exemption Certificate or Documentation?
Once the purchaser has provided acceptable documentation such as a valid exemption certificate, the seller or Aviall is then relieved of its legal obligation to collect sales tax on the transaction. This is assuming that the documentation is accepted in good faith and with the belief that the purchaser is entitled to the exemption. However, it is important to note that states having differing requirements regarding valid exemption documentation. Purchasers should consult with their respective sales and use tax advisors for the validity of its exemption certificates in the state that it is having Aviall products shipped to. AVIALL WILL ONLY ACCEPT VALID EXEMPTION CERTIFICATES THAT HAVE THE FOLLOWING REQUIRED INFORMATION:
- (A) The type of exemption being claimed;
- (B) The names and addresses of both the purchaser and Aviall in the transaction. PLEASE NOTE THAT AVIALL MUST BE LISTED AS THE “SELLER” ON THE EXEMPTION CERTIFICATE OR WE WILL NOT ACCEPT THE CERTIFICATE;
- (C) A description of the goods being purchased;
- (D) The purchaser's tax registration number with the ship-to state;
- (E) Description of the type of business activity generally engaged in or type of items normally sold by the purchaser:
- (F) A statement that if the purchaser uses the items in a taxable manner that they will be responsible for the use tax;
- (G) A signature of the purchaser (or their agent or employee) and the date entered
Q – How Often Should Exemption Certificates Be Updated?
Each state varies by expiration of valid exemption certificates. As a “best practice” rule, Aviall will accept valid exemption certificates every three to five years.
Q – What are the Difference Between a Resale Certificate and Exemption Certificate?
The main difference between a resale and an exemption certificate is the reason for the exemption. A resale certificate is simply that, meaning the sale or purchase is for resale from a purchaser to another end user. Whereas an exemption certificate is an exemption either because the purchaser qualifies for an exemption (such as a government entity, non-profit, or educational institution), or the product or goods purchased qualify for an exemption, such as materials that will be an ingredient or component part of what the purchaser is selling.
Need Assistance? Please Contact Us at Tax@Aviall.com