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# Alaska Air Carriers Skeptical Regarding Excise Tax Reversal
- URL: https://ktna.org/alaska-air-carriers-skeptical-regarding-excise-tax-reversal/
- Published: 2014-03-19T08:00:00.000Z
- Updated: 2014-03-19T08:00:00.000Z
- Description: BY: Liz Ruskin, APRN The IRS has given a sliver of ground in how it has applied tax rules to air taxi flights. Sen. Mark Begich is calling it a
- Author: Phillip Manning
- Tags: Local News, #wp, #wp-post, #Import 2026-07-22 01:28

BY: Liz Ruskin, APRN

The IRS has given a sliver of ground in how it has applied tax rules to air  
taxi flights. Sen. Mark Begich is calling it a win for small air carriers,  
but Joy Journeay of the Alaska Air Carriers Association says the  
concession is less than it appears.

“It is not clear at this time that it is going to help  
anyone.”

The association has said the rules were unclear on when a small plane  
operator has to collect federal excise taxes from passengers. Several air  
taxi businesses say they didn’t know they were supposed to collect the  
money until they were audited and hit with tax bills that, in some cases,  
exceeded a million dollars. The IRS last week wrote a letter to Begich  
saying it will refund any excise tax air services paid for day tours. The  
IRS letter doesn’t say whether it will also refund the penalties and  
interest audited businesses had to pay, and an IRS spokesman said the  
agency didn’t want to talk about its decision. But the letter says the  
agency is only lifting the tax retroactively. Next month it will apparently  
revert to its previous interpretation of the rules, which Journeay  
(Joor-NAY) called baffling.

“The letter issued to Sen. Begich from the IRS doesn’t clear  
up any of the ambiguous language in the regulations or address any of the  
items that the Alaska Air Carriers have asked them to address for multiple  
years. ”

The IRS has previously said whether the tax applies to a day trip depends  
in part on the purpose of the trip. If the passengers deplane to see a  
glacier or watch bears, the air service doesn’t have to collect the tax,  
but if they land to fish, that might be taxable, if the pilots fly to the  
same places with some degree of regularity. The way the agency has defined  
regularity has also exasperated air carriers.