1. (1) An airline is:

   1. (i) an air carrier of persons, property and mail operating under a certificate of public convenience and necessity issued by the Civil Aeronautics Board, or a foreign air carrier holding an equivalent certificate issued by the carrier's respective sovereign government;
   2. (ii) an air carrier holding a certificate for all-cargo air service issued by the Civil Aeronautics Board; or
   3. (iii) an air taxi operator, who is classified by the Civil Aeronautics Board as a commuter air carrier, or who (a) performs at least five round trips per week between two or more points, and publishes flight schedules which specify the times and days of the week and places between which such flights are performed, or (b) transports mail by air pursuant to contract with the United States Postal Service. This exemption shall extend to the purchase of fuel for use in such commuter flights.

2. (2) Air taxi operators and commercial operators of small aircraft holding air taxi certificates issued by the Federal Aviation Agency, which enable these operators to engage in carrying passengers or cargo for hire in air commerce, but who are not commuter air carriers, are not airlines within the meaning of the Tax Law.

   (c) Fueling and defueling charges.

3. (1) Taxability of fueling services furnished to an airline for use in its airplanes is dependent upon when title to the fuel vests in the airline.

   1. (i) When an airline purchases fuel from an oil company, and is charged separately for testing, storage and fueling, such charges are deemed to be part of the cost of the fuel sold and are exempt from the sales and use tax. Example 1:

      Example 1:

      A public authority which operates an airport requires that all fuel be tested and delivered by its agent. The agent charges the oil company for these services and the oil company passes these charges to its airline customers. These charges are exempt.

   2. (ii) When a airline has title to fuel and a charge is made for delivering the fuel into its airplanes, such charge is taxable as a service to tangible personal property. Example 2:

      Example 2:

      An airline has fuel in a storage tank which had been taken out of its airplanes and stored for future use. A service company at the airport charges the airline for fueling its airplanes with the stored fuel. The charges are taxable.

4. (2) The charge for defueling an airplane is a taxable service to the airline as a service to tangible personal property.

Tax Law, § 1115(a)(9)

(a) Exemption.

Fuel sold to an airline for use in its airplanes is exempt from sales and use tax.

(b) Airline defined.