Airlines will charge less taxes effective today!

[Tony Abreu]

Note that effective 23 July, airlines have lost the authority to collect and remit some US travel taxes.

To find out what you don't have to pay starting today or get a tax credit for (if you already paid it and will travel during the time the taxes are suspended) read the below from Travelport ...

 

July 22, 2011

Effective at midnight tonight, the U.S. Federal Aviation Administration will halt some operations, after the House of Representatives and Senate adjourned today without agreeing on legislation to extend the agency’s authority.

The most impactful lapsing program is the authority to collect federal aviation taxes.  As of 12:01 AM on Saturday, July 23, airlines will no longer have the authority to collect or remit these taxes.  Please see the list below for additional details.

As a result of the above, Travelport will expire the application of these taxes as of midnight. Any tickets issued via the Apollo, Galileo or Worldspan systems effective 12:01am July 23 and beyond will be without federal aviation taxes.

We will keep you informed as changes occur.

Below is a list of the taxes affected, as well as a list of the fees that are not affected. 

Taxes Affected

  

Ticket Taxes

For tickets sold beginning July 23, 2011 the following taxes would not apply:

• · The 7.5% tax generally applicable to domestic transportation (as well the 7.5% tax on amounts received from the sale of “frequent flyer miles”.)
• · The $3.70 domestic segment tax.
• · The $16.30 international arrival/departure tax.
• · The $8.20 departure tax for flights between Alaska/Hawaii and the mainland US.

 

The expiration presumably occurs based on the date at the location where the ticket is purchased.

 

If a ticket was sold when the taxes were in effect, but the travel begins on a date when the taxes are not in effect, the taxes previously paid will be considered an overpayment.  The person who paid the tax can request a refund from the airline or file a claim for refund with the IRS.  Based on several court cases files by passengers when the taxes expired in 1996-97, airlines are not required to issue refunds (the taxes collected, of course, are required to be remitted to the IRS).

 

Cargo Tax

The 6.25% tax generally applicable to domestic cargo transportation would expire for amounts paid beginning July 23, 2011.  Similar to the ticket taxes, if the transportation was paid for when the tax was in effect, but the transportation begins when the tax is not in effect, the previously paid tax will be considered an overpayment.

 

Fuel Taxes

The 4.3 cents per gallon tax on jet fuel used in commercial aviation would not be affected.

The 19.3 cent per gallon tax on aviation gasoline would be reduced to 4.3 cents per gallon.

The 21.8 cent per gallon tax on jet fuel used in noncommercial aviation would be reduced to 4.3 cents per gallon.

 

Fees Not Affected

•        PFCs (Airport Passenger Facility Charges)
•        September 11 Passenger Security Fee
•       APHIS passenger inspection fee
•       APHIS aircraft inspection fee
•       Customs passenger inspection fee
•       Immigration passenger inspection fee

[David Lawrence]

Tony doe this mean the taxes are expired or just that someone else collects these taxes?

[Tony Abreu]

It means there is no legal authority to collect it unless Congress reauthorizes the FAA.

The way I understand it, No one is authorized to collect these affected taxes.

So if you are planning to buy tickets (especially international), buy them now.

[Anil]

OK, I understand the concept of non reauthorization intrinsically, however in the nuts-n-bolts of it, what will the FAA not cover or provide in terms of security and manageability ? No over times to Air Traffic Control ? no updates to weather data ? What did those taxes fund, and what services are going to go away ?

 

[Northeast News]

I can't answer Anil's questions, but beware: "Some airline customers won't see savings this weekend even though several federal taxes on tickets have expired. US Airways and American Airlines raised fares to offset the tax savings," says Associated Press.

 

"That means instead of passing along the savings from expired taxes, the carriers are pocketing the money while customers pay the same amount as before...."The expired taxes can total $25 or more on a typical $300 round-trip ticket."