Frequently Asked Questions
Who is eligible for the Uninterrupted International Air Transportation Exclusion?
The scheduled interval between the U.S. segments and the international segment must not exceed 12 hours.
How does the Uninterrupted International Air Transportation Exclusion work?
Excludes the domestic portion of an international trip from the 7.5% tax if the layover between the domestic and international segment is 12 hours or less.
What law authorizes the Uninterrupted International Air Transportation Exclusion?
The Uninterrupted International Air Transportation Exclusion is authorized under IRC §4262(c)(3) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §4262
Source: Internal Revenue Code, Title 26, United States Code
§ 4262. Definition of taxable transportation(a) Taxable transportation; in generalFor purposes of this part, except as provided in subsection (b), the term “taxable transportation” means—(1) transportation by air which begins in the United States or in the 225–mile zone and ends in the United States or in the 225–mile zone; and
(2) in the case of transportation by air other than transportation described in paragraph (1), that portion of such transportation which is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if such portion is not a part of uninterrupted international air transportation (within the meaning of subsection (c)(3)).
(b) Exclusion of certain travelFor purposes of this part, the term “taxable transportation” does not include that portion of any transportation by air which meets all 4 of the following requirements:(1) such portion is outside the United States;
(2) neither such portion nor any segment thereof is directly or indirectly—(A) between (i) a point where the route of the transportation leaves or enters the continental United States, or (ii) a port or station in the 225-mile zone, and
(B) a port or station in the 225-mile zone;
(3) such portion—(A) begins at either (i) the point where the route of the transportation leaves the United States, or (ii) a port or station in the 225-mile zone, and
(B) ends at either (i) the point where the route of the transportation enters the United States, or (ii) a port or station in the 225-mile zone; and
(4) a direct line from the point (or the port or station) specified in paragraph (3)(A), to the point (or the port or station) specified in paragraph (3)(B), passes through or over a point which is not within 225 miles of the United States.
(c) DefinitionsFor purposes of this section—(1) Continental United StatesThe term “continental United States” means the District of Columbia and the States other than Alaska and Hawaii.
(2) 225-mile zoneThe term “225-mile zone” means that portion of Canada and Mexico which is not more than 225 miles from the nearest point in the continental United States.
(3) Uninterrupted international air transportationThe term “uninterrupted international air transportation” means any transportation by air which is not transportation described in subsection (a)(1) and in which—(A) the scheduled interval between (i) the beginning or end of the portion of such transportation which is directly or indirectly from one port or station in the United States to another port or station in the United States and (ii) the end or beginning of the other portion of such transportation is not more than 12 hours, and
(B) the scheduled interval between the beginning or end and the end or beginning of any two segments of the portion of such transportation referred to in subparagraph (A)(i) is not more than 12 hours.
Showing first 3,000 characters of full section text.