So I've got a guestion for all you FAR/AIM masters and online attorneys. when would a commercial rated pilot being hired by the public to go up and "take a look around" be considered to be operating as an aerial tour operation?
If someone pays you for a scenic flight/ride you need to be operating under an LOA. Simple as that. Some FBO's sneak around this calling it an "instructional flight"... but you better have a logbook and the customer better be willing to agree that's what it is.
I understand the rules governing Sightseeing operations but don't understand when you would be one. Is it only when you advertise yourself to be such and establish some LOA?
As soon as someone pays you for a scenic flight.
You only need to be certificated as a Commercial pilot to execute a local scenic flight, but the operation still needs to be under an LOA.
To get one, you need to submit a letter of request/intent to your local FSDO and that'll get the ball rolling. They might do a maintenance review of the aircraft you'll use and they'll require a drug testing program to be in place. The drug testing program is usually the main hurdle, assuming you have good maintenance documentation and 100-hour inspections.
Also, on the practical side, your insurance costs are going to go up for a commercial passenger-carrying operation.
To get to what is usually the motivation of your question: No you cannot as a commercial pilot go rent the FBO's Skyhawk and give people rides and charge them for it.