AVIATION AIRCRAFT ‑- NONRESIDENT OWNERSHIP ‑- TAXATION EXCISE AND REGISTRATION FEES

AVIATION AIRCRAFT ‑- NONRESIDENT OWNERSHIP ‑- TAXATION EXCISE AND REGISTRATION FEES.

The state may collect an excise tax under chapter 49 of the Session Laws of 1949 upon aircraft continuously based in the State of Washington for ninety consecutive days and owned by a nonresident of the State of Washington.

There is no exemption due aircraft owned by a civil air patrol squadron as such squadron is not a subdivision of government.

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                                                                December 1, 1951

Honorable Robert L. Nuber
Assistant Director of Aeronautics
Arcade Building
Seattle 1, Washington                                                                                               Cite as:  AGO 51-53 No. 184

Dear Sir:

            You request our opinion on the following questions:

            1. Is an aircraft owned by a nonresident but normally kept in this state subject to the excise tax imposed by chapter 49, Laws of 1949, and the registration fee imposed by chapter 165, Laws of 1947, as amended?

            2. Is an aircraft owned and operated by a Civil Air Patrol Squadron exempt from the excise tax imposed by chapter 49, Laws of 1949?

            We conclude:

            1.  Section 2, chapter 49, Laws of 1949, imposes an excise tax on all airplanes in this state, and section 25, chapter 165, Laws of 1947, as amended, imposes a registration fee on all aircraft operated within the state during the calendar year.  These laws apply to all airplanes kept in this state even though owned by a nonresident.  Exempt from these laws are airplanes which are both owned by a nonresident and registered in another state; however, even such airplanes are subject to the tax and fee imposed (they are brought back within the statutes) where

             [[Orig. Op. Page 2]]

            (1) The aircraft remains in the state for ninety consecutive days or longer, or

            (2) The aircraft is based in the state for ninety consecutive days or longer, or

            (3) Where (1) and (2) are combined in any given circumstances.

            2.  Assuming an aircraft owned and operated by a Civil Air Patrol Squadron is used exclusively in the service of such squadron or Civil Air Patrol, still such aircraft is subject to the excise tax imposed by chapter 49, Laws of 1949.

                                                                     ANALYSIS

            1. The conclusion reached as to the first question above is based on our interpretation of the statutes herein considered.  Both statutes use identical wording in this respect; therefore that which follows is applicable to both.  Certain airplanes are exempt from the tax and registration fee.  The statutes granting such exemptions read as follows:

            "Aircraft [are exempt] which are owned by a nonresident and registered in another state:  Provided, That if any such aircraft shall remain in and/or be based in this state for a period of ninety consecutive days or longer it shall not be exempt under this section; * * *."  (Ch. 49, Laws of 1949, § 10; Ch. 165, Laws of 1947, § 25, as amended)

            All airplanes kept in this state are subject to the excise tax and registration fee even though they may be owned by nonresidents of this state.  Exempt from such tax and registration fee are airplanes owned by nonresidents and registered in another state, but even such airplanes are not exempt when they remain in and/or are based in this state for ninety consecutive days.  In applying this conclusion, whether an airplane is kept in this state, and whether it is owned by a nonresident and registered in another state, are readily determinable, and consequently as to these aspects the statutes can be applied without difficulty.  However, when is an airplane‑-exempt because owned by a nonresident and registered in another state‑-brought back within the statutes because it was "based" within the state for ninety consecutive days or more?  To answer this it is necessary that the meaning of the term "based" be determined.

            "Based" is defined as "having a base."  "Base," as defined by Webster's New International Dictionary, 2d Ed., 1944, relative to military and naval bases, is "the locality on which a force relies for supplies, or from which it initiates  [[Orig. Op. Page 3]] operations; as, a submarine base."  Applying this definition to the term "based," the statutes provide that airplanes which are owned by nonresidents and registered in another state are exempt from the tax and registration fee unless the airplane relies on some locale or locales in Washington for its supplies and/or initiates its operations from such locale or locales; if a plane does either or both of these, it is "based" in this state.

            It is conceivable, however, that an airplane could either supply itself or initiate operations in this state perhaps once or twice during a calendar year.  Were this so the State of Washington could not subject the airplane to the tax in question; this is so for the reason that it is the law of the United States and the State of Washington that in order that tangible personal property acquire a taxing situs in a state other than the domicile of its owner, such property must regularly and continuously enjoy the benefits conferred by such state.  Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18; New York Central Railroad v. Miller, 202 U.S. 584; Guiness v. King County, 32 Wn. (2d) 503, 202 P. (2d) 737, the principle being that the power of taxation is exercised upon the assumption of an equivalent rendered to the taxpayer in the protection of his property.  If the taxing power be in no position to render these services, or otherwise benefit the property taxed, the taxation of such property has been repeatedly held to be beyond the power of the legislature.  Therefore the legislature inserted that part of the proviso requiring the aircraft to remain in and/or be based in this state "for a period of ninety consecutive days or longer" on the theory that an airplane based in the state for such a period receives benefits from the state and consequently is subject to its taxing power.

            It is very possible that an aircraft has one or more bases within the state.  In such event the aircraft would come within the statutes if it be based at two or more of these bases within the state for the ninety consecutive day period, the important fact being that being based in the state for such period it is continually enjoying the protection and services of the state and consequently is subject to its taxing power.

            What has been said may be summarized as follows:  Airplanes kept in this state are subject to the tax and registration fee herein considered.  Exempt from such tax and registration fee are airplanes owned by nonresidents and registered in another state, but even these planes are subject to the tax and registration fee if they rely upon some locale or locales in Washington for their supplies and/or initiating their operations for a period of ninety consecutive days or longer.

             [[Orig. Op. Page 4]]

            2. Chapter 49, Laws of 1949, exempts from the tax it imposes "* * * aircraft owned by and used exclusively in the service of any government or any political subdivision thereof, * * *."  For such aircraft to be exempt there are thus two requirements, namely; (1) that it be owned by a government or political subdivision thereof, and (2) that it be used exclusively in the service of such government or political subdivision thereof.  The second requirement is a question of fact; for our purpose we will assume that an aircraft owned and operated by a Civil Air Patrol Squadron is so used.  The question which remains is whether a Civil Air Patrol Squadron is a political subdivision of any government, this question in turn depending upon whether the Civil Air Patrol itself is a political subdivision.

            Political, as defined in part by Webster's New International Dictionary, 2d Ed., 1944, is:  "* * * of or pertaining to, or incidental to, the exercise of functions vested in those charged with the conduct of government * * *."  Thus a political subdivision is one which carries out the functions of government.

            The Civil Air Patrol was originally formed in 1941, and it immediately established and has continued to stress a cadet training program as a means for the creation of an air reserve.  Its members carry out numerous flying activities, and during the war rendered notable and valuable services.  Later it received national recognition through the enactment of Public Law 476, 79th Congress, under date of July 1, 1946, its general purpose being the protection of national security through the maintenance of air supremacy.

            The importance of the Civil Air Patrol as a complement to the United States Air Force was subsequently realized, and on May 26, 1948, an act was approved which established the Civil Air Patrol as a volunteer civilian "auxiliary" of the Air Force (Public Law 557, 80th Congress, approved May 26, 1948).  However, this act did not materially change the relationship between the Air Force and the Civil Air Patrol.  Aside from authorizing the Air Force to make grants of certain obsolete equipment to the Civil Air Patrol, no appropriations were made for its support by the Federal Government.  This act does not attempt to authorize federal control of the Civil Air Patrol, nor does such control exist.  The Civil Air Patrol has been and continues to be a voluntary civilian organization which is controlled by its members and is dependent upon them and air-minded citizens for its financial support.  Its only established contact with the Air Force is through the receipt of obsolete equipment, and technical assistance and advice.

             [[Orig. Op. Page 5]]

            It is our conclusion that such facts do not constitute the Civil Air Patrol a political subdivision of the Federal Government, and consequently its airplanes are not exempt from the excise tax herein considered.

Very truly yours,

SMITH TROY
Attorney General

WILLIAM G. JENKINS
Assistant Attorney General