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2019 Op. N.D. Att'y Gen. 1 (2019)

handle is hein.sag/sagnd0098 and id is 1 raw text is: LETTER OPINION 2019-L-01 March 1,2019 Mr. Kyle Wanner Executive Director North Dakota Aeronautics Commission 2301 University Drive Bldg 22 Bismarck, ND 58504-7595 Dear Mr. Wanner: Thank you for your letter requesting my opinion regarding the correct application of the aircraft excise tax as per N.D.C.C. § 57-40.5-02. For the following reasons, it is my opinion payment of the aircraft excise tax is a condition of registration and must be paid, or a statutory exemption must be met, prior to the issuance of an aircraft registration certificate. Furthermore, if a purchase requiring registration under the laws of the state of North Dakota occurs, the aircraft excise tax must be calculated based on the purchase price, not the subsequent lease or rental cost. ANALYSIS North Dakota law imposes an excise tax at a rate of five percent on the purchase price of any aircraft purchased or acquired either in or outside of the state of North Dakota or on the lease or rental cost of any aircraft, less fuel, if rented dry and required to be registered under the laws of this state, except on aircraft or helicopters designed or modified for exclusive use as an agricultural aircraft ... the excise tax imposed is at the rate of three percent... .' Purchase price is defined by N.D.C.C. § 57-40.5-01(3). Prior to implementation of the aircraft excise tax in 1983, aircraft were taxed by the State Tax Department under the sales and use tax law.2 Under the sales and use tax law, the sale of a new or used aircraft between private individuals, anyone other than an aircraft dealer, was tax exempt, regardless of where the transaction occurred.3 As a result, the majority of aircraft purchases occurred between private individuals. 1 N.D.C.C. § 57-40.5-02. 2 Hearing on H.B. 1518 Before the House Comm. on Approp., 1983 N.D. Leg. (Statement of Harold G. Varra). 31d.

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