The Internal Revenue Service (IRS) announced that it would offer tax relief to those consumers taken for a ride by greedy airline companies. By July 22, 2011, Congress failed to extend federal air transportation excise taxes. The discontinued taxes include:
- A 7.5 percent tax on the base ticket price;
- A domestic segment tax of $3.70 per person per segment (a single takeoff and single landing);
- An 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 a flight that begins or ends in Alaska or Hawaii; and
- A 6.25 percent tax on the amount paid for transporting property by air.
Air travelers with trips on or after July 23, 2011, who paid the discontinued taxes when purchasing their tickets on or before July 22, 2011, may obtain a refund from the IRS for the discontinued taxes paid, if the air carrier fails to refund the discontinued taxes.
In a greedy move, some air carriers have since increased their air fares in an amount equal to the discontinued excise taxes. Therefore, air travelers pay the same overall price that would have been paid if the excise tax had not been discontinued, with the air carrier profiting in accordance with the discontinued tax. It will be interesting to see if those greedy air carriers maintain their newly increase fares if and when the federal air transportation excise taxes are reinstated by Congress.