Yes it matters whether your balloon is tethered or not. Or crosses state lines.
If you desire to travel in interstate commerce, first you must let go of the rope. That, at least, is
the conclusion of the Missouri Department of Revenue with regard to the applicability of the state's sales tax to tethered (taxed) and untethered (untaxed) hot air balloon rides. The Missouri ruling is neither surprising nor unprecedented, but it's a fun illustration of the interplay of federal and state taxing authority where interstate commerce is concern
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The case which precipitated this ruling, Balloons Over the Rainbow, Inc. v. Director of Revenue, will never soar to the heights of prominence achieved by these cases—tethered or no. But when the Missouri Supreme Court ruled that somewhere over the rainbow, state taxes don't apply, the reasoning was not dissimilar. It all came down to what constituted interstate commerce, and in this case, what’s known as “air commerce.”
If you desire to travel in interstate commerce, first you must let go of the rope. That, at least, is the conclusion of the Missouri Department of Revenue with regard to the applicability of the state’s sales tax to tethered (taxed) and untethered (untaxed) hot air balloon rides. The Missouri...
taxfoundation.org