OSBA Sales & Use Tax Subcommittee Report Highlights Recent Cases - September 2020

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I. EXEMPTIONS -

Resale Exemption -

Domokur Aviation Services, LLC v. McClain, Ohio BTA Case No. 2019-694 (September 15, 2020). Applying the Supreme Court’s decision in Pi in the Sky, LLC v. Testa, 155 Ohio State 113, 2018-4812, which involved parallel facts, the BTA denied the resale exemption for a $2.9 million aircraft purchase. The BTA cited the following factors to support its finding that the taxpayer was not engaged in a for-profit business operation to support the resale exemption:

• The aircraft was not openly marketed to others (outside the related party lessee).

• The rental rate was not established to be commercially reasonable.

• The taxpayer entity was not separable from the owner/lessee.

Please see full Report below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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