Airline Tax Question No Longer Up in the Air

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Here’s the final chapter in the FAA shutdown that led to airline taxes not being collected for a couple of weeks. Congress reinstated the agency’s authority on Aug. 5, but plenty of confusion remained surrounding taxes not levied or not collected during that period. Were travelers who purchased their ticket prior to the shutdown but flew during the “blackout” entitled to a refund? Would travelers who purchased tickets between July 23, when the shutdown began, and Aug. 5 owe taxes on top of the fare hike most airlines implemented in the vacuum?

A quick call to the IRS cleared things up. When Congress gave the FAA its authority back, it did so retroactively, which means the government gets those taxes travelers were hoping would be refunded to them for flights booked before July 23 and taken during the blackout. On the plus side, though, an IRS spokesperson said that the agency had decided not to collect the absent tax on tickets sold during the legislative standoff, whether the travel took place during that time frame or afterwards. This will let the government collect at least a portion of the roughly $25 million in revenue it was losing each day when the FAA was sidelined.

(MORE: Stupid Airfare Tricks: Taxes Go Away, But Fares Stay the Same)

Finally, it looks like travelers aren’t going to be socked with higher fares now that the taxes are back in place. Southwest rolled back the fare increases it put in place during the standoff, and other carriers followed suit pretty quickly. Now all we have to do is hope we don’t see a repeat of this mess the next time the FAA’s funding needs to be renewed.

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