Tue, Dec 09, 2003
Commercial Aviation Taxes Going Up
The rates for certain
federal excise taxes (FET) and fees are on the way up for
commercial transport operations booked after December 31, 2003.
That includes transportation provided by Part 135 on-demand cargo
and passenger operators. The new tax amounts to 7.5% of revenue for
domestic overflights.
Operators who are required to collect and remit the federal
excise taxes imposed on certain commercial air transportation
operations must implement the new rates for all applicable
transportation occurring after December 31, 2003. These fees, along
with all other components of the FET on transportation, do NOT
apply to those few Part 135 aircraft operators who continue to meet
the small aircraft exemption criteria.
This exemption is only available to commercial operators using
small aircraft (less than 6,000 lbs. maximum gross takeoff weight)
that are not operated on an established line. However, these
operations are subject to the fuel tax. Exemptions for air
ambulance operations also remain unchanged.
For international transportation occurring after December 31,
2003, the International Facilities Fee is $13.70 per passenger.
This fee is applicable to all international flights that
originate or end in the United States. The tax is imposed when
aircraft leave or enter the United States. This fee is not charged
on flights to or from Canada and Mexico that remain within 225
miles of the United States. Such flights are treated as domestic
and are subject to the taxes described above.
Flights To And From
Both Alaska And Hawaii
Because flights originating in the United States traveling to
Alaska or Hawaii must cross over substantial areas of international
territory or waters, a special provision exists for them. The IRS
requires collection of one-half of the international facilities fee
per departure, plus the "domestic transportation of persons" tax
(7.5%, plus any segment fees) for the portion of the flight
occurring over the United States.
Therefore, this fee is $6.90 per departure.
The following formula demonstrates in three steps how to
calculate the excise tax amount for flights involving Alaska and
Hawaii.
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