Recent developments in air transportation excise tax

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The air transportation excise tax provisions found in Internal Revenue Code section 4261 expired at midnight on July 22, 2011. At that time, the percentage tax, international facilities tax and domestic segment tax ceased to apply to airline ticket purchases and travel. On Friday, August 5, 2011, the Senate, using unanimous consent procedures passed, and the President signed, House Bill 2553, The Airport and Airway Extension Act of 2011, Part IV ("the Bill"), retroactively extending the air transportation excise taxes. The Bill seamlessly extended the air transportation excise as though it never lapsed. The primary effect to air travelers and ticket purchasers is that anticipated refunds will not be available. In addition, the statements of members of Congress immediately after passage reveal the intention to forgo retroactive enforcement against ticket purchasers and airlines for tax not paid or collected between July 23, 2011 and midnight Monday, August 8, 2011.

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