The Internal Revenue Service will soon publish Revenue Procedure 2005-70, providing inflation-adjusted tax items for 2006. According to Section 3.30 of the procedure, “[f]or calendar year 2006, the tax under § 4261(b) on the amount paid for each domestic segment of taxable transportation by air is $3.30. For calendar year 2006, the tax under § 4261(c) on any amount paid (whether within or without the United States) for any transportation of any person by air, if such transportation begins or ends in the United States, generally is $14.50. However, for a domestic segment beginning or ending in Alaska or Hawaii as described in § 4261(c)(3), the tax only applies to departures and is at the rate of $7.30.” The 7.5-percent percentage tax that applies to the amount paid for domestic commercial transportation remains unmodified.
If you would like further information on Revenue Procedure 2005-70 you can contact Marnette M. Myers of the Office of Associate Chief Counsel (Income Tax & Accounting at(202) 622-4920.