Article
Hawaii appeals court clarifies aircraft service and maintenance exemption
Dec. 10, 2025 · Authored by Adam Cline
Jet parts purchased from Boeing aren’t exempt as service and maintenance costs under Hawaii’s General Excise Tax (GET), according to a ruling by the Hawaii Intermediate Court of Appeals.
The court ruled against Hawaiian Airlines, Inc., clarifying that the exemption applies only to taxpayers who service and maintain aircraft, not to the sale of tangible property such as aircraft parts.
Hawaiian had paid the assessed GET under protest and sought a refund, but the court affirmed the Hawaii Department of Taxation’s position that Boeing’s sales of aircraft parts are taxable, and that Hawaiian is not entitled to a refund in its Nov. 10, 2025, ruling.
The ruling also highlights that tax liability generally falls on the seller, even if the buyer agrees to pay the tax under contract.
Key points of the ruling
- The exemption under Hawaii Revised Statutes (HRS) Section 237-24.9 applies solely to amounts received from servicing and maintaining aircraft, not to sales of tangible personal property.
- Sales of aircraft parts are subject to the GET under HRS Section 237-13(2), which taxes sales of tangible personal property.
- Hawaiian’s payment of the GET on behalf of Boeing did not entitle it to a refund, as the tax liability rests with the seller.
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