Tax refunds stranded on the runway

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in Small Business Tax,Small Business Tax Deduction Strategies

After Congress allowed the federal excise taxes for airline travel to expire, it was widely believed that passengers who booked flights before July 23, 2011, for travel after July 22, 2011, would be entitled to refunds.

The excise taxes include a 7.5% tax on the base ticket price, a levy of $3.70 per person for domestic flight segments and a facilities tax of up to $16.30 per person for certain international flights.

However, the IRS has backpedaled now that the taxes have been reinstated, beginning Aug. 8, 2011. On its website, it says that airline passengers who took flights during this two-week period can’t claim refunds. Saving grace: If you purchased tickets during the brief shutdown, you won’t be assessed the excise taxes retroactively.

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