|The tax rates are
shown in the attached table.
As with any law,
there are exemptions. In the case of the
transportation tax, the two major exemptions are:
Group Exemption: This exemption applies where
transportation is provided by one corporation to
another corporation which are part of the same
"affiliated group" of corporations. The
exemption applies to transactions between a
parent and subsidiary corporation and to
transactions between brother-sister corporations
which share a common parent corporation. It does not apply to
brother-sister corporations which are owned by an
individual. For this purpose, a
corporation includes an S-corporation or an LLC
which has elected to be treated as a corporation.
A non-electing LLC may or may not qualify,
depending on the circumstances.
Aircraft Exemption: This exemption applies
where transportation is provided in small
aircraft which are not operating on an
established line. A small aircraft is an aircraft
with a maximum certified takeoff weight of 6,000
lbs or less.
In addition, there
are certain exemptions which apply to helicopters
and to emergency medical services.
As can be seen,
there is a risk that the transportation tax will
apply whenever an aircraft is used by more than
one entity. In most cases, such activities can be
structured to insure that the tax does not apply.