Saturday, July 23, 2011

Temporary Airline Tax Relief Explained

Here is the themporary airline tax relief explained. This means a average savings of $35 and up for flights between the U.S. Mainland and Hawaii for you the customer. However some airlines such as American Airlines and US Airways are taking advantage of this and raising their fares to offset the tax difference, while Alaska Airlines, Delta Airlines, Continental, and Hawaiian have not raised the ticket prices. When traveling inter-island you will see an average fare savings of about $10 per roundtrip. This will not last forever so take advantage while you can.

The Aviation Excise Tax expired on Friday, July 22, 2011, at midnight.

For tickets sold beginning July 23, 2011, the following taxes will not be collected:
  • 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 occurs based on the date at the location where the ticket is purchased. Taxes/Fees not specifically mentioned above will continue to apply.

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 or file a claim for refund with the IRS. The IRS is expected to publish guidance on refund claims as early as Monday.

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