Air Transportation Excise Taxes on Form 720

Airlines, charter operators, and air freight carriers must report and remit federal air transportation excise taxes quarterly on Form 720. This guide covers every applicable tax, current rates, and who bears the filing obligation.

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Quick Answer

Air carriers pay a 7.5% ticket tax on domestic passenger fares, a $4.80 per-segment fee, and $22.10 per international departure/arrival. Air freight on domestic routes is taxed at 6.25%. All are reported quarterly on Form 720.

Air Transportation Excise Tax Rates

Tax	Rate	Who Pays	Notes
Domestic Air Passenger Ticket Tax	7.5% of the ticket price	Air carriers (airlines and charter operators)	Applies to amounts paid for domestic air transportation. Collected from passengers and remitted quarterly.
Domestic Passenger Segment Fee	$4.80 per flight segment	Air carriers	A flat fee per takeoff and landing on domestic routes. Applied in addition to the 7.5% ticket tax.
International Departure Tax (Outbound)	$22.10 per departure	Air carriers on international departing flights	Applies to departures from the U.S. to international destinations. Rate is adjusted annually.
International Arrival Tax (Inbound)	$22.10 per arrival	Air carriers on flights arriving from international origins	Mirrors the departure tax. Applied to arrivals from foreign destinations to the U.S.
Alaska/Hawaii Departure Tax	$8.70 per departure	Air carriers on flights between the U.S. and Alaska/Hawaii	Lower rate applies for flights to/from Alaska or Hawaii compared to fully international routes.
Air Freight (Domestic)	6.25% of the amount paid	Air carriers transporting freight or property by air	Applies to domestic air freight. International air freight is exempt from this tax.

How to Report Air Transportation Taxes on Form 720

Air transportation taxes are reported on Schedule I, Part II of Form 720. Each tax type has its own line. You report the total taxable amounts (ticket revenue, number of segments, number of international departures/arrivals, freight amounts) and the calculated tax.

Airlines with significant tax liabilities must make semi-monthly deposits via EFTPS. The quarterly return reconciles all deposits against total liability.

Air carriers should maintain detailed records of passenger counts, ticket prices, segments flown, international routes, and freight volumes for each quarter to support their Form 720 calculations.

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Frequently Asked Questions

Who is responsible for collecting and paying air transportation excise taxes?

Air carriers — airlines and charter operators — are responsible for collecting air transportation excise taxes from passengers at the time of ticket purchase and remitting them to the IRS quarterly on Form 720. The passenger is technically the taxpayer, but the airline acts as the collection agent. Charter operators who arrange air transportation are also covered.

Are private jets subject to air transportation excise taxes?

Yes, in many cases. Fractional ownership programs, air charter arrangements, and certain private jet uses are subject to air transportation excise taxes. The specific tax treatment depends on the nature of the arrangement — whether it is commercial transportation or non-commercial use. Non-commercial flights operated for personal use in privately owned aircraft may be exempt. Consult IRS Publication 510 for specifics.

What is a "flight segment" for excise tax purposes?

A flight segment is each takeoff and landing on domestic routes. A nonstop flight from New York to Los Angeles is one segment. A connecting flight from New York to Chicago, then Chicago to Los Angeles, is two segments. The $4.80 per segment fee applies to each takeoff/landing combination on domestic routes.

Are international flights exempt from the 7.5% ticket tax?

Yes. The 7.5% domestic air passenger ticket tax does not apply to international air transportation. Instead, international flights are subject to the international departure/arrival tax ($22.10 per trip) and, for Alaska/Hawaii routes, a lower $8.70 rate. Air freight on international routes is also exempt.

How often must airlines file Form 720 for air transportation taxes?

Like all Form 720 taxes, air transportation excise taxes are filed quarterly: April 30 (Q1), July 31 (Q2), October 31 (Q3), and January 31 (Q4). Airlines with large ticket tax liabilities must also make semi-monthly deposits via EFTPS if quarterly liability exceeds $2,500.

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Disclaimer: The information provided in this article is for general informational purposes only and should not be relied upon as legal, tax, or professional advice. Tax laws and regulations are subject to change, and their application can vary based on individual circumstances. Consult a qualified tax professional or attorney for advice specific to your situation. File720Online is an IRS-authorized e-file provider and does not provide legal or tax advice.