SECTION 3. AIR TRANSPORTATION

TAXES

The air transportation excise taxes under §§ 4261 and 4271 of the Code are imposed on the person making the payment for the air transportation services and collected and paid over to the government by the person receiving that payment.

To relieve the administrative burden that would be associated with payment and collection of air transportation excise taxes on purchases that have already occurred, the IRS is providing the following relief with respect to these taxes:

1. Purchasers of air transportation services (including individuals who purchase frequent flyer miles for their own use) will not be required to pay, and air transportation providers and other collectors of air transportation excise taxes will not be required to collect and pay over, taxes imposed by §§ 4261 and 4271 on purchases of air transportation services (or frequent flyer miles) for which payment was made after July 22, 2011, and before August 8, 2011.
2. Persons required to make deposits of tax in accordance with the rules provided under §§ 40.6302(c)–1 and 40.6302(c)–3 of the Excise Tax Procedural Regulations (Regulations) may treat the taxes imposed by §§ 4261 and 4271 as being in effect after July 22, 2011, and before August 8, 2011, for purposes of determining whether the safe harbor rules provided in § 40.6302(c)–1(b)(2) apply and in determining the amount of the net tax liability that is taken into account in applying those rules.

The relief granted in paragraph 1 of this section does not apply to any amount paid (and the value of any other benefit provided) 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 under § 4261(e)(3) (right to provide free or reduced rate air transportation). Purchases

of the right to provide free or reduced rate air transportation made after July 22, 2011, and before August 8, 2011, are subject to the taxes imposed by § 4261. Accordingly, purchasers of the right to provide free or reduced rate air transportation are required to pay the taxes imposed by § 4261 on purchases made after July 22, 2011, and before August 8, 2011.

The relief provided in paragraph 1 applies only to amounts paid after July 22, 2011, and before August 8, 2011. Accordingly, purchasers of air transportation services are required to pay, and air transportation providers and other collectors of air transportation excise taxes are required to collect taxes on air transportation services for which payment is made on or after 12:01 am, August 8, 2011. In addition, persons who purchased air transportation services (including purchasers of the right to provide free or reduced rate air transportation) before July 23, 2011, for travel after that date are not entitled to refunds of taxes paid on those purchases (other than refunds allowable under the law in effect after the enactment of the Extensions Act, Part IV).