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U.S. Code as of:
01/19/04
Section 4261. Imposition of tax
(a) In general
There is hereby imposed on the amount paid for taxable
transportation of any person a tax equal to 7.5 percent of the
amount so paid.
(b) Domestic segments of taxable transportation
(1) In general
There is hereby imposed on the amount paid for each domestic
segment of taxable transportation by air a tax in the amount
determined in accordance with the following table for the period
in which the segment begins:
In the case of segments 2The tax
beginning: is:
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After September 30, 1997, and before October 1, 19 $1.00
After September 30, 1998, and before October 1, 19 $2.00
After September 30, 1999, and before January 1, 20 $2.25
During 2000 $2.50
During 2001 $2.75
During 2002 or thereafter $3.00.
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(2) Domestic segment
For purposes of this section, the term "domestic segment" means
any segment consisting of 1 takeoff and 1 landing and which is
taxable transportation described in section 4262(a)(1).
(3) Changes in segments by reason of rerouting
If -
(A) transportation is purchased between 2 locations on
specified flights, and
(B) there is a change in the route taken between such 2
locations which changes the number of domestic segments, but
there is no change in the amount charged for such
transportation,
the tax imposed by paragraph (1) shall be determined without
regard to such change in route.
(c) Use of international travel facilities
(1) In general
There is hereby imposed a tax of $12.00 on any amount paid
(whether within or without the United States) for any
transportation of any person by air, if such transportation
begins or ends in the United States.
(2) Exception for transportation entirely taxable under
subsection (a)
This subsection shall not apply to any transportation all of
which is taxable under subsection (a) (determined without regard
to sections 4281 and 4282).
(3) Special rule for Alaska and Hawaii
In any case in which the tax imposed by paragraph (1) applies
to a domestic segment beginning or ending in Alaska or Hawaii,
such tax shall apply only to departures and shall be at the rate
of $6.
(d) By whom paid
Except as provided in section 4263(a), the taxes imposed by this
section shall be paid by the person making the payment subject to
the tax.
(e) Special rules
(1) Segments to and from rural airports
(A) Exception from segment tax
The tax imposed by subsection (b)(1) shall not apply to any
domestic segment beginning or ending at an airport which is a
rural airport for the calendar year in which such segment
begins or ends (as the case may be).
(B) Rural airport
For purposes of this paragraph, the term "rural airport"
means, with respect to any calendar year, any airport if -
(i) there were fewer than 100,000 commercial passengers
departing by air during the second preceding calendar year
from such airport, and
(ii) such airport -
(I) is not located within 75 miles of another airport
which is not described in clause (i), or
(II) is receiving essential air service subsidies as of
the date of the enactment of this paragraph.
(C) No phasein of reduced ticket tax
In the case of transportation beginning before October 1,
1999 -
(i) In general
Paragraph (5) shall not apply to any domestic segment
beginning or ending at an airport which is a rural airport
for the calendar year in which such segment begins or ends
(as the case may be).
(ii) Transportation involving multiple segments
In the case of transportation involving more than 1
domestic segment at least 1 of which does not begin or end at
a rural airport, the 7.5 percent rate applicable by reason of
clause (i) shall be applied by taking into account only an
amount which bears the same ratio to the amount paid for such
transportation as the number of specified miles in domestic
segments which begin or end at a rural airport bears to the
total number of specified miles in such transportation.
(2) Amounts paid outside the United States
In the case of amounts paid outside the United States for
taxable transportation, the taxes imposed by subsections (a) and
(b) shall apply only if such transportation begins and ends in
the United States.
(3) Amounts paid for right to award free or reduced rate air
transportation
(A) In general
Any amount paid (and the value of any other benefit provided)
to an air carrier (or any related person) for the right to
provide mileage awards for (or other reductions in the cost of)
any transportation of persons by air shall be treated for
purposes of subsection (a) as an amount paid for taxable
transportation, and such amount shall be taxable under
subsection (a) without regard to any other provision of this
subchapter.
(B) Controlled group
For purposes of subparagraph (A), a corporation and all
wholly owned subsidiaries of such corporation shall be treated
as 1 corporation.
(C) Regulations
The Secretary shall prescribe rules which reallocate items of
income, deduction, credit, exclusion, or other allowance to the
extent necessary to prevent the avoidance of tax imposed by
reason of this paragraph. The Secretary may prescribe rules
which exclude from the tax imposed by subsection (a) amounts
attributable to mileage awards which are used other than for
transportation of persons by air.
(4) Inflation adjustment of dollar rates of tax
(A) In general
In the case of taxable events in a calendar year after the
last nonindexed year, the $3.00 amount contained in subsection
(b) and each dollar amount contained in subsection (c) shall be
increased by an amount equal to -
(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment determined under section
1(f)(3) for such calendar year by substituting the year
before the last nonindexed year for "calendar year 1992" in
subparagraph (B) thereof.
If any increase determined under the preceding sentence is not
a multiple of 10 cents, such increase shall be rounded to the
nearest multiple of 10 cents.
(B) Last nonindexed year
For purposes of subparagraph (A), the last nonindexed year is
-
(i) 2002 in the case of the $3.00 amount contained in
subsection (b), and
(ii) 1998 in the case of the dollar amounts contained in
subsection (c).
(C) Taxable event
For purposes of subparagraph (A), in the case of the tax
imposed (!1) subsection (b), the beginning of the domestic
segment shall be treated as the taxable event.
(D) Special rule for amounts paid for domestic segments
beginning after 2002
If an amount is paid during a calendar year for a domestic
segment beginning in a later calendar year, then the rate of
tax under subsection (b) on such amount shall be the rate in
effect for the calendar year in which such amount is paid.
(5) Rates of ticket tax for transportation beginning before
October 1, 1999
Subsection (a) shall be applied by substituting for "7.5
percent" -
(A) "9 percent" in the case of transportation beginning after
September 30, 1997, and before October 1, 1998, and
(B) "8 percent" in the case of transportation beginning after
September 30, 1998, and before October 1, 1999.
(f) Exemption for certain helicopter uses
No tax shall be imposed under subsection (a) or (b) on air
transportation by helicopter for the purpose of -
(1) transporting individuals, equipment, or supplies in the
exploration for, or the development or removal of, hard minerals,
oil, or gas, or
(2) the planting, cultivation, cutting, or transportation of,
or caring for, trees (including logging operations),
but only if the helicopter does not take off from, or land at, a
facility eligible for assistance under the Airport and Airway
Development Act of 1970, or otherwise use services provided
pursuant to section 44509 or 44913(b) or subchapter I of chapter
471 of title 49, United States Code, during such use. In the case
of helicopter transportation described in paragraph (1), this
subsection shall be applied by treating each flight segment as a
distinct flight.
(g) Exemption for air ambulances providing certain emergency
medical transportation
No tax shall be imposed under this section or section 4271 on any
air transportation for the purpose of providing emergency medical
services -
(1) by helicopter, or
(2) by a fixed-wing aircraft equipped for and exclusively
dedicated on that flight to acute care emergency medical
services.
(h) Exemption for skydiving uses
No tax shall be imposed by this section or section 4271 on any
air transportation exclusively for the purpose of skydiving.
(i) Application of taxes
(1) In general
The taxes imposed by this section shall apply to -
(A) transportation beginning during the period -
(i) beginning on the 7th day after the date of the
enactment of the Airport and Airway Trust Fund Tax
Reinstatement Act of 1997, and
(ii) ending on September 30, 2007, and
(B) amounts paid during such period for transportation
beginning after such period.
(2) Refunds
If, as of the date any transportation begins, the taxes imposed
by this section would not have applied to such transportation if
paid for on such date, any tax paid under paragraph (1)(B) with
respect to such transportation shall be treated as an
overpayment.
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