IRS provides 'relief' for airlines on ticket taxes

August 23, 2011|By Michelle Deal-Zimmerman | The Baltimore Sun

Some days I feel like a harpy and I guess today's just gonna be one of those days. The FAA is back up and running as of Aug. 8, but the whole dispute has left a bad taste in my mouth.

Case in point: Soonafter the deal - OK, 10 days ago and I don't know how I didn't see it sooner - the IRS issued guidance on what would happen to those taxes that the U.S. government was unable to collect during the FAA shutdown. The 7 percent or so in ticket fees that many airlines scooped up as part of fare increases instead of passing along as savings to passengers.

Here's what the IRS said about collecting those taxes retroactively: No problem. You keep it, little airlines. Don't worry about returning that extra $25 million or so you pocketed each day during the two weeks when the FAA didn't have the authority to collect taxes. You. Keep. It.

Seriously? Do the airlines really need a government stimulus?

As for passengers who had purchased tickets before the dispute but took their flights during the shutdown, when technically they should have been flying tax-free, here's what the IRS said: Sorry, sucker. You're not entitled to a refund.

The only good part, and really I say "good" to mean "as if," is that passengers who didn't pay taxes on their tickets will not be expected to pony up any extra money for their flights.




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