So filers, we are going to talk about the Air transportation tax that is included in Excise Tax (part-I). The tax included in the list is percentage tax and domestic segment tax. To get the total tax on transportation of people by air, you need to add the percentage and domestic segment tax. However, do note, the percentage and the domestic segment tax do not apply on the flight if the surtax on the fuel used in a fractional ownership program aircraft is imposed.
Who Should File Air Transportation Tax?
The person receiving the payment for air transportation services is required to file the tax. He/she is responsible to collect the tax, file form 720 and report the amount of tax collected or considered collected for the quarter.
What is Percentage Tax?
The percentage tax is 7.5% of the amount paid for the taxable transportation of person by air.
Domestic Segment Tax:
Every year the tax rate for the domestic segment takes up a revision. However, the tax on the paid amount paid for each domestic segment of taxable transportation is $4.00.
If the aircraft is chartered, the flight is not one where the tax on fuel used in a fractional ownership program aircraft is imposed. The domestic segment tax for each segment of taxable transportation is figured by multiplying the taxes by the number of passengers transported on the aircraft.
The domestic segment tax does not apply when the segment is from a rural airport. The transportation by Air tax is 6.5 % of the amount paid for the transportation of property by air. However, the tax is not applicable if the surtax on the fuel used in a fractional ownership program aircraft is imposed.
Usage of International Air Travel Facilities:
The tax on the amount paid for international flight is $17.50 per person for the flight that begins or ends in United States of America and the tax per person for domestic segment is $8.70 for the flights that begin or end in Alaska or Hawaii (applies only to the departure). The above calculation is applicable for the year 2014.
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