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FAA funding extension passes – further IRS excise tax guidance to follow

FAA funding extension passes – further IRS excise tax guidance to follow

On August 5, 2011, the Senate cleared and President Obama signed a bill (HR 2553) that would extend authorization for federal aviation programs and end the partial shutdown of the Federal Aviation Administration. The measure extends through September 16, 2011, federal aviation programs that expired July 22, 2011. Beginning on August 8 at 12:01 a.m., air transportation excise taxes must be collected and remitted to the Internal Revenue Service (IRS). Congressional Committee Leaders sent a letter to IRS Commissioner Shulman recognizing the burden that would be placed on the aviation industry and passengers if the air transportation excise taxes were applied retroactively. The letter encouraged the IRS “to utilize all your discretion and authority to extend relief…with respect to ticket taxes that were not paid or collected because of the lapse and provide the industry a three day period of time to restart processes to collect the taxes.” NBAA spoke with IRS officials about tax applicability, particularly for the period July 23 through August 5, 2011, and the IRS did issue an announcement providing some information about the reinstatement of FET, but many questions still remain. NBAA is in communication with IRS officials about these issues, such as the application of fuel taxes, and will provide Members with the guidance once it is available.

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