Refunds of Airline Excise Taxes | Tax Tip of the Week | No. 110
No Refunds From the IRS
As you may recall, Congress allowed the 7.5% ticket tax and $3.70 domestic segment tax to expire after July 22, 2011. This inaction caused a shutdown of all non-essential FAA services---and cost an estimated $30 million/day in lost tax revenue.At that time, many news outlets, and airlines, reported that travelers who bought tickets before the shutdown should be entitled to refunds because they were paying for services not provided. The reports continued to speculate that such refunds would come from the IRS.On August 5, 2011 Congress retroactively reinstated the levies to July 22, 2011. The speculation that airline travelers, between July 23, 2011 and August 5, 2011, would be entitled to refunds has now proved to be false.While most airlines simply increased fares to match the uncollected taxes during this period---no one will get any refunds. However, if you were one of the fortunate few who bought tickets during the period, you will not be required to retroactively pay the excise tax.As always, give us a call if you have any questions.
Rick Prewitt - the guy behind TTW...until next week.