Publication 510 - Excise Taxes - 2004 (Page 7 of 48) in pdf

gins or ends in the United States becomes liable

departures. This tax does not apply if all the

reenters the United States (Alaska) is more than

for the tax.

transportation is subject to the percentage tax,

225 miles from the United States.

discussed earlier.

Exemptions. The tax on transportation of per-

Liability for tax. The person paying for tax-

sons by air does not apply in the following situa-

able transportation is liable for the tax and, ordi-

tions. See also Special Rules on Transportation

Transportation of

narily, the person engaged in the business of

Taxes, later.

Property by Air

transporting property by air for hire receives the

Military personnel on international trips.

payment, collects the tax, files the returns, and

A tax of 6.25% is imposed on amounts paid

When traveling in uniform at their own expense,

pays the tax over to the government.

(whether in or outside the United States) for

United States military personnel on authorized

If tax is not paid when a payment is made

transportation of property by air. The fact that

leave are deemed to be traveling in uninter-

outside the United States, the person furnishing

the aircraft may not use public or commercial

rupted international air transportation (defined

the last segment of taxable transportation col-

airports in taking off and landing has no effect on

earlier) even if the scheduled interval between

lects the tax from the person to whom the prop-

the tax. The tax applies only to amounts paid to

arrival and departure at any station in the United

erty is delivered in the United States.

a person engaged in the business of transport-

States is actually more than 12 hours. However,

ing property by air for hire.

such personnel must buy their tickets within 12

hours after landing at the first domestic airport

Special Rules on

The tax applies only to transportation (includ-

and accept the first available accommodation of

Transportation Taxes

ing layover time and movement of aircraft in

the type called for by their tickets. The trip must

deadhead service) that begins and ends in the

begin or end outside the United States and the

In certain circumstances, special rules apply to

United States. Thus, the tax does not apply to

225-mile zone.

the taxes on transportation of persons and prop-

transportation of property by air that begins or

erty by air.

ends outside the United States.

Certain helicopter uses. The tax does not

apply to air transportation by helicopter if the

Aircraft used by affiliated corporations.

Exemptions. The tax on transportation of

helicopter is used for any of the following pur-

The taxes do not apply to payments received by

property by air does not apply in the following

poses.

one member of an affiliated group of corpora-

situations. See also Special Rules on Transpor-

tions from another member for services fur-

1) Transporting individuals, equipment, or

tation Taxes, later.

nished in connection with the use of an aircraft.

supplies in the exploration for, or the de-

Cropdusting and firefighting service. The

However, the aircraft must be owned or leased

velopment or removal of, hard minerals,

tax does not apply to amounts paid for cropdust-

by a member of the affiliated group and cannot

oil, or gas.

ing or aerial firefighting service.

be available for hire by a nonmember of the

2) Planting, cultivating, cutting, transporting,

affiliated group. Determine whether an aircraft is

Exportation.

The tax does not apply to

or caring for trees (including logging oper-

available for hire by a nonmember of an affiliated

payments for transportation of property by air in

ations).

group on a flight-by-flight basis.

the course of exportation (including to United

For this rule, an affiliated group of corpora-

3) Providing emergency medical services.

States possessions) by continuous movement,

tions is any group of corporations connected

as evidenced by the execution of Form 1363,

However, during a use described in items (1)

with a common parent corporation through 80%

Export Exemption Certificate. See Form 1363

and (2), the tax applies if the helicopter takes off

or more of stock ownership.

for more details.

from, or lands at, a facility eligible for assistance

Certain helicopter and fixed-wing air am-

under the Airport and Airway Development Act

Small aircraft. The taxes do not apply to

bulance uses. The tax does not apply to

of 1970, or otherwise uses services provided

transportation furnished by an aircraft having a

amounts paid for the use of helicopters in con-

under section 44509 or 44913(b) or subchapter I

maximum certificated takeoff weight of 6,000

struction to set heating and air conditioning units

of chapter 471 of title 49, United States Code.

pounds or less. However, the taxes do apply if

on roofs of buildings, to dismantle tower cranes,

For item (1), treat each flight segment as a

the aircraft is operated on an established line.

and to aid in construction of power lines and ski

separate flight.

“Operated on an established line” means the

lifts.

aircraft operates with some degree of regularity

Fixed-wing air ambulance. The tax does

The tax also does not apply to air transporta-

between definite points.

not apply to air transportation by fixed-wing air-

tion by helicopter or fixed-wing aircraft for the

Consider an aircraft to be operated on an

craft if used for emergency medical services.

purpose of providing emergency medical serv-

established line if it is operated on a charter

The aircraft must be equipped for and exclu-

ices. The fixed-wing aircraft must be equipped

sively dedicated on that flight to acute care

basis between two cities also served by that

for and exclusively dedicated on that flight to

emergency medical services.

carrier on a regularly scheduled basis.

acute care emergency medical services.

Skydiving. The tax does not apply to any air

Mixed load of persons and property. If a

Skydiving. The tax does not apply to any air

transportation exclusively for the purpose of

single amount is paid for air transportation of

transportation exclusively for the purpose of

skydiving.

persons and property, the payment must be

skydiving.

allocated between the amount subject to the tax

Bonus tickets. The tax does not apply to

Excess baggage. The tax does not apply to

free bonus tickets issued by an airline company

on transportation of persons and the amount

excess baggage accompanying a passenger on

to its customers who have satisfied all require-

subject to the tax on transportation of property.

an aircraft operated on an established line.

ments to qualify for the bonus tickets. However,

The allocation must be reasonable and sup-

the tax applies to amounts paid by customers for

ported by adequate records.

Alaska and Hawaii. For transportation of

advance bonus tickets when customers have

property to and from Alaska and Hawaii, the tax

traveled insufficient mileage to fully qualify for

in general does not apply to the portion of the

Credits or Refunds

the free advance bonus tickets.

transportation that is entirely outside the conti-

If tax is collected and paid over for air transporta-

nental United States (or the 225-mile zone if the

tion that is not taxable air transportation, the

aircraft departs from or arrives at an airport in

Use of International

collector may claim a credit or refund if it has

the 225-mile zone). But the tax applies to flights

Air Travel Facilities

repaid the tax to the person from whom the tax

between ports or stations in Alaska and the

Aleutian Islands, as well as between ports or

was collected or obtained the consent of that

A $13.70 tax per person is imposed on amounts

person to the allowance of the credit or refund.

stations in Hawaii. The tax applies even though

paid during 2004 (whether in or outside the

Alternatively, the person who paid the tax may

parts of the flights may be over international

United States) for international flights that begin

claim a refund. For information on how to file for

or end in the United States. However, for a

waters or over Canada, if no point on a line

credits or refunds, see the Instructions for Form

domestic segment that begins or ends in Alaska

drawn from where the route of transportation

720 or Form 8849.

or Hawaii, a $6.90 tax per person applies only to

leaves the United States (Alaska) to where it

Page 7

Publication 510 - Excise Taxes - 2004 Page 7

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