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Www irs gov efile Publication 15-T - Additional Material Table of Contents This image is too large to be displayed in the current screen. Www irs gov efile Please click the link to view the image. Www irs gov efile Form W-4 (2009) This image is too large to be displayed in the current screen. Www irs gov efile Please click the link to view the image. Www irs gov efile Deductions and Adjustments Worksheet Notice to Employees Please click here for the text description of the image. Www irs gov efile Multi-Media/Back Page Prev  Up  Next   Home   More Online Publications
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Www irs gov efile 4. Www irs gov efile   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. Www irs gov efile Private communication service. Www irs gov efile Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes Excise taxes are imposed on amounts paid for certain facilities and services. Www irs gov efile If you receive any payment on which tax is imposed, you are required to collect the tax, file returns, and pay the tax over to the government. Www irs gov efile If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. Www irs gov efile See chapter 14, later. Www irs gov efile Uncollected Tax Report A separate report is required to be filed by collecting agents of communications services and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it is impossible for the collecting agent to collect the tax. Www irs gov efile The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid. Www irs gov efile Regular method taxpayers. Www irs gov efile   For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported. Www irs gov efile Alternative method taxpayers. Www irs gov efile   For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. Www irs gov efile See Alternative method in  chapter 11. Www irs gov efile Where to file. Www irs gov efile    Do not file the uncollected tax report with Form 720. Www irs gov efile Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. Www irs gov efile  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. Www irs gov efile Local telephone service. Www irs gov efile   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. Www irs gov efile Local telephone service also includes any facility or services provided in connection with this service. Www irs gov efile The tax applies to lease payments for certain customer premises equipment (CPE) even though the lessor does not also provide access to a local telecommunications system. Www irs gov efile Local-only service. Www irs gov efile   Local-only service is local telephone service as described above, provided under a plan that does not include long distance telephone service or that separately states the charge for local service on the bill to customers. Www irs gov efile Local-only service also includes any facility or services provided in connection with this service, even though these services and facilities may also be used with long-distance service. Www irs gov efile Private communication service. Www irs gov efile   Private communication service is not local telephone service. Www irs gov efile Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. Www irs gov efile However, the charge for the service must be stated separately from the charge for the basic system, and the accessory must function, in whole or in part, in connection with intercommunication among the subscriber's stations. Www irs gov efile Teletypewriter exchange service. Www irs gov efile   This includes access from a teletypewriter or other data station to a teletypewriter exchange system and the privilege of intercommunication by that station with most persons having teletypewriter or other data stations in the same exchange system. Www irs gov efile Figuring the tax. Www irs gov efile   The tax is based on the sum of all charges for local telephone service included in the bill. Www irs gov efile However, if the bill groups individual items for billing and tax purposes, the tax is based on the sum of the individual items within that group. Www irs gov efile The tax on the remaining items not included in any group is based on the charge for each item separately. Www irs gov efile Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. Www irs gov efile Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. Www irs gov efile Nontaxable service. Www irs gov efile   Nontaxable service means bundled service and long distance service. Www irs gov efile Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. Www irs gov efile Bundled service. Www irs gov efile   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. Www irs gov efile Bundled service includes plans that provide both local and long distance service for either a flat monthly fee or a charge that varies with the elapsed transmission time for which the service is used. Www irs gov efile Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. Www irs gov efile If Voice over Internet Protocol service provides both local and long distance service and the charges are not separately stated, such service is bundled service. Www irs gov efile   The method for sending or receiving a call, such as on a landline telephone, wireless (cellular), or some other method, does not affect whether a service is local-only or bundled. Www irs gov efile Long distance service. Www irs gov efile   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. Www irs gov efile Pre-paid telephone cards (PTC). Www irs gov efile   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. Www irs gov efile Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. Www irs gov efile The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. Www irs gov efile The transferee is the person liable for the tax and is eligible to request a credit or refund. Www irs gov efile For more information, see Regulations section 49. Www irs gov efile 4251-4. Www irs gov efile   The holder is the person that purchases a PTC to use and not to resell. Www irs gov efile Holders are not liable for the tax and cannot request a credit or refund. Www irs gov efile Pre-paid cellular telephones. Www irs gov efile   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. Www irs gov efile The transferee is the person eligible to request the credit or refund. Www irs gov efile Installation charges. Www irs gov efile   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. Www irs gov efile However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. Www irs gov efile Answering services. Www irs gov efile   The tax does not apply to amounts paid for a private line, an answering service, and a one-way paging or message service if they do not provide access to a local telephone system and the privilege of telephonic communication as part of the local telephone system. Www irs gov efile Mobile radio telephone service. Www irs gov efile   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. Www irs gov efile Coin-operated telephones. Www irs gov efile   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. Www irs gov efile But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. Www irs gov efile Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. Www irs gov efile Telephone-operated security systems. Www irs gov efile   The tax does not apply to amounts paid for telephones used only to originate calls to a limited number of telephone stations for security entry into a building. Www irs gov efile In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. Www irs gov efile News services. Www irs gov efile   The tax on teletypewriter exchange service does not apply to charges for the following news services. Www irs gov efile Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. Www irs gov efile Services used exclusively in the collection or dissemination of news by a news ticker service furnishing a general news service similar to that of the public press. Www irs gov efile This exemption applies to payments received for messages from one member of the news media to another member (or to or from their bona fide correspondents). Www irs gov efile For the exemption to apply, the charge for these services must be billed in writing to the person paying for the service and that person must certify in writing that the services are used for an exempt purpose. Www irs gov efile Services not exempted. Www irs gov efile   The tax applies to amounts paid by members of the news media for local telephone service. Www irs gov efile International organizations and the American Red Cross. Www irs gov efile   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. Www irs gov efile Nonprofit hospitals. Www irs gov efile   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. Www irs gov efile Also, the tax does not apply to amounts paid by these hospitals to provide local telephone service in the homes of their personnel who must be reached during their off-duty hours. Www irs gov efile Nonprofit educational organizations. Www irs gov efile   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. Www irs gov efile A nonprofit educational organization is one that satisfies all the following requirements. Www irs gov efile It normally maintains a regular faculty and curriculum. Www irs gov efile It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Www irs gov efile It is exempt from income tax under section 501(a). Www irs gov efile This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. Www irs gov efile Qualified blood collector organizations. Www irs gov efile   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. Www irs gov efile A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered with the IRS, and Registered by the Food and Drug Administration to collect blood. Www irs gov efile Federal, state, and local government. Www irs gov efile   The tax does not apply to communication services provided to the government of the United States, the government of any state or its political subdivisions, the District of Columbia, or the United Nations. Www irs gov efile Treat an Indian tribal government as a state for the exemption from the communications tax only if the services involve the exercise of an essential tribal government function. Www irs gov efile Exemption certificate. Www irs gov efile   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. Www irs gov efile See Regulations section 49. Www irs gov efile 4253-11. Www irs gov efile File the certificate with the provider of the communication services. Www irs gov efile An exemption certificate is not required for nontaxable services. Www irs gov efile   The following users that are exempt from the communications tax do not have to file an annual exemption certificate after they have filed the initial certificate to claim an exemption from the communications tax. Www irs gov efile The American National Red Cross and other international organizations. Www irs gov efile Nonprofit hospitals. Www irs gov efile Nonprofit educational organizations. Www irs gov efile Qualified blood collector organizations. Www irs gov efile State and local governments. Www irs gov efile   The federal government does not have to file any exemption certificate. Www irs gov efile   All other organizations must furnish exemption certificates when required. Www irs gov efile Credits or Refunds If tax is collected and paid over for nontaxable services, or for certain services or users exempt from the communications tax, the collector or taxpayer may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Www irs gov efile Alternatively, the person who paid the tax may claim a refund. Www irs gov efile For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Www irs gov efile Collectors. Www irs gov efile   The collector may request a credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Www irs gov efile These requirements also apply to nontaxable service refunds. Www irs gov efile Collectors using the regular method for deposits. Www irs gov efile   Collectors using the regular method for deposits must use Form 720X to request a credit or refund if the collector has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Www irs gov efile Collectors using the alternative method for deposits. Www irs gov efile   Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. Www irs gov efile For more information, see the Instructions for Form 720. Www irs gov efile Air Transportation Taxes Taxes are imposed on amounts paid for: Transportation of persons by air, Use of international air travel facilities, and Transportation of property by air. Www irs gov efile Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. Www irs gov efile Percentage tax. Www irs gov efile   A tax of 7. Www irs gov efile 5% applies to amounts paid for taxable transportation of persons by air. Www irs gov efile Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. Www irs gov efile Mileage awards. Www irs gov efile   The percentage tax may apply to an amount paid (in cash or in kind) 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. Www irs gov efile For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. Www irs gov efile   Generally, the percentage tax does not apply to amounts paid for mileage awards where the mileage awards cannot, under any circumstances, be redeemed for air transportation that is subject to the tax. Www irs gov efile Until regulations are issued, the following rules apply to mileage awards. Www irs gov efile Amounts paid for mileage awards that cannot be redeemed for taxable transportation beginning and ending in the United States are not subject to the tax. Www irs gov efile For this rule, mileage awards issued by a foreign air carrier are considered to be usable only on that foreign air carrier and thus not redeemable for taxable transportation beginning and ending in the United States. Www irs gov efile Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. Www irs gov efile Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are not subject to the tax to the extent those miles will be awarded in connection with the purchase of taxable transportation. Www irs gov efile Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are subject to the tax to the extent those miles will not be awarded in connection with the purchase of taxable transportation. Www irs gov efile Domestic-segment tax. Www irs gov efile   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. Www irs gov efile However, see Rural airports, later. Www irs gov efile A segment is a single takeoff and a single landing. Www irs gov efile The amount of the domestic-segment tax is in the Instructions for Form 720. Www irs gov efile Charter flights. Www irs gov efile    If an aircraft is chartered, the domestic-segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft. Www irs gov efile Rural airports. Www irs gov efile   The domestic-segment tax does not apply to a segment to or from a rural airport. Www irs gov efile An airport is a rural airport for a calendar year if fewer than 100,000 commercial passengers departed from the airport by air during the second preceding calendar year (the 100,000 passenger rule), and one of the following is true: The airport is not located within 75 miles of another airport from which 100,000 or more commercial passengers departed during the second preceding calendar year, The airport was receiving essential air service subsidies as of August 5, 1997, or The airport is not connected by paved roads to another airport. Www irs gov efile   To apply the 100,000 passenger rule to any airport described in (3) above, only count commercial passengers departing from the airport by air on flight segments of at least 100 miles. Www irs gov efile   An updated list of rural airports can be found on the Department of Transportation website at www. Www irs gov efile dot. Www irs gov efile gov and enter the phrase “Essential Air Service” in the search box. Www irs gov efile Taxable transportation. Www irs gov efile   Taxable transportation is transportation by air that meets either of the following tests. Www irs gov efile It begins and ends either in the United States or at any place in Canada or Mexico not more than 225 miles from the nearest point on the continental United States boundary (this is the 225-mile zone). Www irs gov efile It is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if it is not a part of uninterrupted international air transportation, discussed later. Www irs gov efile Round trip. Www irs gov efile   A round trip is considered two separate trips. Www irs gov efile The first trip is from the point of departure to the destination. Www irs gov efile The second trip is the return trip from that destination. Www irs gov efile Uninterrupted international air transportation. Www irs gov efile   This means transportation entirely by air that does not begin and end in the United States or in the 225-mile zone if there is not more than a 12-hour scheduled interval between arrival and departure at any station in the United States. Www irs gov efile For a special rule that applies to military personnel, see Exemptions, later. Www irs gov efile Transportation between the continental U. Www irs gov efile S. Www irs gov efile and Alaska or Hawaii. Www irs gov efile   This transportation is partially exempt from the tax on transportation of persons by air. Www irs gov efile The tax does not apply to the part of the trip between the point at which the route of transportation leaves or enters the continental United States (or a port or station in the 225-mile zone) and the point at which it enters or leaves Hawaii or Alaska. Www irs gov efile Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. Www irs gov efile 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. Www irs gov efile Therefore, this transportation is subject to the percentage tax on the part of the trip in U. Www irs gov efile S. Www irs gov efile airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. Www irs gov efile Transportation within Alaska or Hawaii. Www irs gov efile   The tax on transportation of persons by air applies to the entire fare paid in the case of flights between any of the Hawaiian Islands, and between any ports or stations in the Aleutian Islands or other ports or stations elsewhere in Alaska. Www irs gov efile The tax applies even though parts of the flights may be over international waters or over Canada, if no point on the direct line of transportation between the ports or stations is more than 225 miles from the United States (Hawaii or Alaska). Www irs gov efile Package tours. Www irs gov efile   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. Www irs gov efile The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. Www irs gov efile ” This rule also applies to the tax on the use of international air travel facilities, discussed later. Www irs gov efile Liability for tax. Www irs gov efile   The person paying for taxable transportation is liable for the tax and, ordinarily, the person receiving the payment collects the tax, files the returns, and pays the tax over to the government. Www irs gov efile However, if payment is made outside the United States for a prepaid order, exchange order, or similar order, the person furnishing the initial transportation provided for under that order must collect the tax. Www irs gov efile    A travel agency that is an independent broker and sells tours on aircraft that it charters must collect the transportation tax, file the returns, and pay the tax over to the government. Www irs gov efile However, a travel agency that sells tours as the agent of an airline must collect the tax and remit it to the airline for the filing of returns and for the payment of the tax over to the government. Www irs gov efile An independent third party that is not under the airline's supervision or control, but is acting on behalf of, and receiving compensation from, a passenger, is not required to collect the tax and pay it to the government. Www irs gov efile For more information on resellers of air transportation, see Revenue Ruling 2006-52. Www irs gov efile You can find Revenue Ruling 2006-52 on page 761 of I. Www irs gov efile R. Www irs gov efile B. Www irs gov efile 2006-43 at www. Www irs gov efile irs. Www irs gov efile gov/pub/irs-irbs/irb06-43. Www irs gov efile pdf. Www irs gov efile   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. Www irs gov efile But see Certain helicopter uses, later. Www irs gov efile   For taxable transportation that begins and ends in the United States, the tax applies regardless of whether the payment is made in or outside the United States. Www irs gov efile   If the tax is not paid when payment for the transportation is made, the air carrier providing the initial segment of the transportation that begins or ends in the United States becomes liable for the tax. Www irs gov efile Exemptions. Www irs gov efile   The tax on transportation of persons by air does not apply in the following situations. Www irs gov efile See also Special Rules on Transportation Taxes, later. Www irs gov efile Military personnel on international trips. Www irs gov efile   When traveling in uniform at their own expense, United States military personnel on authorized leave are deemed to be traveling in uninterrupted international air transportation (defined earlier) even if the scheduled interval between arrival and departure at any station in the United States is actually more than 12 hours. Www irs gov efile However, such personnel must buy their tickets within 12 hours after landing at the first domestic airport and accept the first available accommodation of the type called for by their tickets. Www irs gov efile The trip must begin or end outside the United States and the 225-mile zone. Www irs gov efile Certain helicopter uses. Www irs gov efile   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. Www irs gov efile Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Www irs gov efile Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Www irs gov efile Providing emergency medical transportation. Www irs gov efile   However, during a use described in items (1) or (2), the tax applies if the helicopter takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Www irs gov efile For item (1), treat each flight segment as a separate flight. Www irs gov efile Fixed-wing aircraft uses. Www irs gov efile   The tax does not apply to air transportation by fixed-wing aircraft if the fixed-wing aircraft is used for any of the following purposes. Www irs gov efile Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Www irs gov efile Providing emergency medical transportation. Www irs gov efile The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Www irs gov efile   However, during a use described in item (1), the tax applies if the fixed-wing aircraft takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Www irs gov efile Skydiving. Www irs gov efile   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Www irs gov efile Seaplanes. Www irs gov efile   The tax does not apply to any air transportation by seaplane for any segment consisting of a takeoff from, and a landing on, water if the places where the takeoff and landing occur are not receiving financial assistance from the Airport and Airways Trust Fund. Www irs gov efile Bonus tickets. Www irs gov efile   The tax does not apply to free bonus tickets issued by an airline company to its customers who have satisfied all requirements to qualify for the bonus tickets. Www irs gov efile However, the tax applies to amounts paid by customers for advance bonus tickets when customers have traveled insufficient mileage to fully qualify for the free advance bonus tickets. Www irs gov efile International Air Travel Facilities A tax per person is imposed (whether in or outside the United States) for international flights that begin or end in the United States. Www irs gov efile However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. Www irs gov efile This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. Www irs gov efile It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Www irs gov efile See the Instructions for Form 720 for the tax rates. Www irs gov efile Transportation of Property by Air A tax of 6. Www irs gov efile 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. Www irs gov efile The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. Www irs gov efile The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. Www irs gov efile The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. Www irs gov efile Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. Www irs gov efile Exemptions. Www irs gov efile   The tax on transportation of property by air does not apply in the following situations. Www irs gov efile See also Special Rules on Transportation Taxes, later. Www irs gov efile Cropdusting and firefighting service. Www irs gov efile   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. Www irs gov efile Exportation. Www irs gov efile    The tax does not apply to payments for transportation of property by air in the course of exportation (including to United States possessions) by continuous movement, as evidenced by the execution of Form 1363, Export Exemption Certificate. Www irs gov efile See Form 1363 for more information. Www irs gov efile Certain helicopter and fixed-wing air ambulance uses. Www irs gov efile   The tax does not apply to amounts paid for the use of helicopters in construction to set heating and air conditioning units on roofs of buildings, to dismantle tower cranes, and to aid in construction of power lines and ski lifts. Www irs gov efile   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. Www irs gov efile The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Www irs gov efile Skydiving. Www irs gov efile   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Www irs gov efile Excess baggage. Www irs gov efile    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. Www irs gov efile Surtax on fuel used in a fractional ownership program aircraft. Www irs gov efile   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Www irs gov efile Alaska and Hawaii. Www irs gov efile   For transportation of property to and from Alaska and Hawaii, the tax in general does not apply to the portion of the transportation that is entirely outside the continental United States (or the 225-mile zone if the aircraft departs from or arrives at an airport in the 225-mile zone). Www irs gov efile But the tax applies to flights between ports or stations in Alaska and the Aleutian Islands, as well as between ports or stations in Hawaii. Www irs gov efile The tax applies even though parts of the flights may be over international waters or over Canada, if no point on a line drawn from where the route of transportation leaves the United States (Alaska) to where it reenters the United States (Alaska) is more than 225 miles from the United States. Www irs gov efile Liability for tax. Www irs gov efile   The person paying for taxable transportation is liable for the tax and, ordinarily, the person engaged in the business of transporting property by air for hire receives the payment, collects the tax, files the returns, and pays the tax over to the government. Www irs gov efile   If tax is not paid when a payment is made outside the United States, the person furnishing the last segment of taxable transportation collects the tax from the person to whom the property is delivered in the United States. Www irs gov efile Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. Www irs gov efile Aircraft used by affiliated corporations. Www irs gov efile   The taxes do not apply to payments received by one member of an affiliated group of corporations from another member for services furnished in connection with the use of an aircraft. Www irs gov efile However, the aircraft must be owned or leased by a member of the affiliated group and cannot be available for hire by a nonmember of the affiliated group. Www irs gov efile Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. Www irs gov efile   For this rule, an affiliated group of corporations is any group of corporations connected with a common parent corporation through 80% or more of stock ownership. Www irs gov efile Small aircraft. Www irs gov efile   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. Www irs gov efile However, the taxes do apply if the aircraft is operated on an established line. Www irs gov efile “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. Www irs gov efile However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. Www irs gov efile   Consider an aircraft to be operated on an established line if it is operated on a charter basis between two cities also served by that carrier on a regularly scheduled basis. Www irs gov efile   Also, the taxes apply if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight or whether or not it is operated on an established line. Www irs gov efile Mixed load of persons and property. Www irs gov efile   If a single amount is paid for air transportation of persons and property, the payment must be allocated between the amount subject to the tax on transportation of persons and the amount subject to the tax on transportation of property. Www irs gov efile The allocation must be reasonable and supported by adequate records. Www irs gov efile Credits or refunds. Www irs gov efile   If tax is collected and paid over for air transportation that is not taxable air transportation, the collector may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. Www irs gov efile Alternatively, the person who paid the tax may claim a refund. Www irs gov efile For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Www irs gov efile Prev  Up  Next   Home   More Online Publications