IRS asks airlines to refund tax on plane tickets sold before July 23
by AccountingWEB on
By Gail Perry
In a notice posted on the IRS Web site, the IRS points out that the laws authorizing airline ticket tax and other aviation-related taxes have expired as of midnight July 22, 2011.
Typically, airline passengers pay a federal tax along with the purchase of a ticket. Usually this tax is added on to the stated fare. Airlines collect the taxes and remit said taxes to the IRS.
Until Congress makes some more to reinstate the excise taxes, airlines are no longer required, nor are they allowed, to collect and remit the following federal taxes:
- 7.5 percent tax on the base ticket price.
- $3.70 per person per trip segment.
- International travel facilities tax of $16.30 per person for flights that begin or end in the U.S. or $8.20 per person for flights that begin or end in Alaska or Hawaii.
- 6.25 percent on the amount paid for transporting property by air.
For passengers who purchased tickets prior to July 23, 2011 for travel scheduled after July 22, 2011, airlines might be required to refund the tax related to such purchases. Passengers may request these refunds directly from the airlines, or they may submit a claim to the IRS by providing proof of taxes paid and travel dates. A refund form has not yet been released by the IRS.
Regarding the tax for air freight, the IRS states that, "The rules for the collection and refund of taxes on air freight are the same as the rules with respect to the ticket taxes. In some cases, however, tax is imposed on the amount paid by an affiliate of the company providing the air freight service (rather than on the customer shipping the package). In those cases, only the shipper or its affiliate can obtain a refund from the IRS. The customer may contact the shipper or its affiliate about its policy of rebating such refunds to customers. "
In addition to the tax reductions mentioned above, the tax on aviation fuels used in noncommercial aviation is reduced to 4.4 cents per gallon, however there is no refund available for taxes paid prior to July 23, 2011 on aviation fuels that are used after July 22, 2011.
You may like these other stories...
Camp Hopes Estate Tax Will Be on Its Way OutAn article in Bloomberg said that Republicans are considering voting this year to repeal the U.S. estate tax, according to House Ways and Means Chairman Dave Camp (R.-Mich.). He...
Senate Takes Different Approach from House for Highway and Bridge FundEarlier this week, according to a New York Times article, the Senate agreed to fill the coffers of the fund that pays for highway and bridge repairs with...
There it stands, your client's 100-year-old, rickety, vermin-infested barn or former hotel or whatever the darn thing once was. And she's considering what to do with it. There are two words that can help her decide...
Upcoming CPE Webinars
FRF for SMEs Series--Measurement and Disclosure Principles for various Consolidations and Business Combinations, Part 4B
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
In this session we'll review best practices for how to generate interest in your firm’s services.
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.