So Where's My Tax Holiday?

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When I first heard about the “Tax Holiday” resulting from the partial FAA shutdown on July 23rd, I was excited. However for many, that holiday never materialized. Major carriers like United, Delta, American, Continental, and Southwest were quick to raise fares to cover the lost taxes that the government lost the authority to collect on airfares. Virgin and Frontier originally said they would pass savings on to their customers but quickly reneged, leaving Spirit, Alaska, and Hawaiian as the only carriers to not raise fares and pass along the savings.
So what happens with those tickets I purchased before the tax holiday and before the airlines raised fares for trips I haven’t taken yet? That is what I want to know! With three planned itineraries, two of them international and the other to Hawaii, that is a lot of money I could potentially getting back from either the government or the airlines. But then who do I call? Reportedly, JetBlue is the only airline to step forward and ask their customers to email for a tax refund for any trips flown between July 23rd and July 29th (however I couldn’t find any information listed on their website).

FAA Tax Holiday

What about the rest of us? The IRS put together a FAQ on their website. They say customers “may be” entitled to a refund and that IRS has “asked” the airlines to provide refunds to those who request them. I’m not sure I like that wording. It doesn’t sound exactly promising. The IRS also says people who are unable to get a refund from the airlines can file a claim with them, but they are yet to release details on how to do that… at a later date.
So how much money are we even talking about here anyway? Basically they only taxes and fees that still exist are the Sept. 11 Security tax and whatever fees local airport charge for use of their facilities. Here’s the breakdown of what we no longer have to pay for:

  • The 7.5 percent tax on the base ticket price
  • The domestic segment tax of $3.70 per person per segment (a single takeoff and single landing)
  • The international travel facilities tax of $16.30 per person for flights that begin or end in the U.S., or $8.20 per person for a flight that begins or ends in Alaska or Hawaii
  • The 6.25 percent tax on the amount paid for transporting property by air.

In my case, at first glance, that adds up to a couple hundred dollars between my husband and me. Do I plan on getting that money back (or at least trying)? ABSOLUTELY.
With my closest trip still about 2 weeks away, I might wait a while before taking action. After all what happens if congress gets its act together and re-authorizes the FAA between now and then? What if the IRS comes up with a super-streamlined, efficient, and easy way to actually file a claim? But assuming nothing changes by mid-August, when I kick off my next traveling spree, I fully intend on contacting the airlines I’ll be traveling with (Alaska and United) and asking for my money back. I recommend everyone else out there do the same.

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