Facts:  Petitioner Flight Options, L.L.C., a company which manages charter and fractional ownership programs for a fleet of private aircraft, petitioned the Superior Court for Thurston County for a declaratory judgment that the respondent Department of Revenue lacks the authority to assess property taxes on its aircraft given that they do not operate in the state of Washington pursuant to fixed routes and regular schedules.  The superior court granted summary judgment for the Department of Revenue, ruling that Flight Options’ aircraft acquired a tax situs in Washington through their habitual use of the state’s airspace, landing facilities, and other services and benefits and that Washington Revised Code §84.12 authorizes the imposition of property taxes upon those aircraft.  Upon appeal, the Washington Court of Appeals affirmed the superior court.  Flight Options appealed this decision to the Supreme Court of Washington.

Question(s):  Did Flight Options’ aircraft acquire a tax situs in Washington despite the absence of fixed routes and regular schedules?

If so, does §84.12 authorize the imposition of property taxes upon those aircraft?

Conclusion:  Justice Owens’ opinion for a unanimous Court affirmed the Washington Court of Appeals, concluding that fixed routes and regular schedules are not required in order to acquire a tax sits and that the habitual use of the state of Washington’s airspace, landing facilities, and other services and benefits by Flight Options’ aircraft established the minimum contacts with the state necessary for acquisition of a tax situs.  The Court also held that §84.12 authorizes the imposition of property taxes upon Flight Options’ aircraft as Flight Options is an “airplane company” for purposes of §84.12 that is engaged in the business of transporting persons for compensation with airplanes situate in Washington.

Docket No. 84207-8 (from Court of Appeals Division II Case No. 39517-7)

Petitioner: Flight Options, LLC

(Counsel: Scott M. Edwards)

Respondent: Department of Revenue

(Counsel: Brett S. Durbin and Heidi A. Irvin)

Briefs:

Argument: Tuesday, May 17, 2011 10:00am

[Source: TVW, http://tvw.org]

Decided: Thursday, August 25th, 2011

Prevailing Party: Department of Revenue (Respondent)

Vote: 9-0

Citation: Pending

Madsen

Johnson

Alexander

Chambers

Owens
(Majority)

Fairhurst

Johnson

Stephens

Wiggins