Originally Posted by
bmvaughn
I'm asking about UA, specifically. From my experiences, in almost every state, both goods and services are taxed - so yes, attorney, hairdresser, manicurist, etc (although health care seems to skirt under the radar if it's non-elective in many states).
I suppose my question would be more pointed if I had asked whether or not UA was figuring this out on the backend and paying the state, rather than trying to adjust prices on the front-end to take state taxes into account.
No, they don't collect state sales taxes. My initial guess would be as mentioined above it is actually a service (OT, but contrary to your expierence... I cannot think of a single state that taxes services..MI was about to try it, but they changed thier mind).
Its been a while since I bought a greyhound or amtrak ticket... seem those don't collect sales tax (so I don't believe it is unique to airlines).
Also, IMhO it would be virtually IMPOSSIBLE to determine which jurisdiction would receive the tax as you have so many variables:
Purchase location: What if purchased on .bomb... do you go by the server location? or where the buyer lives? If the buyer lived in MKE... and decides to drive to ORD why should WI see the sales tax?
How about if the ticket was purchased through the ICC? Or DTWRR, maybe HNL?
Ok... scratch that. We'll base it on the O/D.... wait... what if there is a connecting flight, OK, we will give them a peice of the pie too.
Uh oh, Nebraska wants some sales tax money if a plane flies over.... OK screw NE, we'll fly over Iowa thats .5% less then NE anyway.
Originally Posted by AllanJ
I believe that airplane parts delivered from the airline's own warehouse in another state are not subject to sales tax when installed in a plane sitting in a given airport but when the parts are purchased, sales tax of the state where the parts are picked up or delivered does apply.
In most cases the airline would need to pay "Use tax" on the parts they sell themselves from thier own inventory.