Thursday, July 28, 2011

Travelers may be owed a tax refund

By DAVID KOENIG - AP Airlines Writer

DALLAS (AP) — Travelers who paid all their federal airline taxes when they bought tickets might get a refund if they're flying now, after some of the taxes expired.

The situation has airlines confused. Some are telling customers to file refund claims with the IRS, while others invite them to contact that airline.

Airlines stopped collecting taxes that expired at midnight Friday.

Affected are people who paid all the taxes when they bought tickets two weeks ago — or any time before Friday night — but are flying now. The Treasury Department acknowledged over the weekend that they people might be owed a refund.

JetBlue Airways said Tuesday that customers flying in the next week should email their refund request to the airline and put "Expired Tax Refund Request" in the subject line.

Alaska Airlines said amounts paid for taxes that are no longer in effect will be considered an overpayment. It told customers to file a refund claim with the IRS.

American Airlines and Virgin America also told customers to direct their refund questions to the IRS.

The airlines said they're expecting guidance from the Internal Revenue Service soon.

The terminated taxes expired when Congress failed to pass a bill to keep the Federal Aviation Administration running at full speed. The dispute could drag on for days or weeks.

For a brief time, it looked like the Washington standoff would result in a break for air travelers. But most airlines raised fares by the same amount as the expired taxes cost, leaving customers to pay the same they did before.

The expired taxes can add 10 percent or more to an airline ticket.

"Those people traveling in July probably paid a lot for their tickets," said Tom Parsons, CEO of travel website "For a family of four, it could be worth $100 in refunds."

The airlines said there hasn't been a rush for refunds.

"We're not getting a lot of incoming inquiries about this," said Tim Smith, a spokesman for American.

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