Due to the lack of agreement to extend the U.S. Federal Aviation Administration (FAA) authorization before the U.S. Congress adjourned for this weekend, the inaction causes, among other things, various transportation taxes to expire, most notably:

• The 7.5% tax generally applicable to U.S. domestic transportation (Tax Code: US)

• The USD 3.70 U.S. domestic segment tax (Tax Code: ZP)

• The USD 16.30 international arrival/departure tax each way for flights to/from the USA to/from Canada, Mexico or other foreign destinations (Tax Code: US)

• The USD 8.20 departure tax for flights between Alaska/Hawaii and the mainland USA (Tax Code: US)

The tax most likely to be affected for transborder travel sold in Canada is the USD 16.30 tax to and from the USA as stated above. Other U.S. taxes and/or fees still apply.

Therefore, for tickets issued on/after 23 July 2011, for applicable travel anytime, the above taxes will not apply.

For tickets issued on/before 22 July 2011, for applicable travel on/after 23 July 2011, a refund for overpayment may be due.

"The impact on various U.S. journeys, including transborder, is significant and represents a considerable tax savings. For a transborder journey, the savings or possible refund amounts to approximately CAD 30.00 roundtrip based on the banker's buying rate (BBR) at the time of ticket sale", said ARTA Canada President Bruce Bishins, CTC.

ARTA Canada's U.S. counterpart, ARTA, has been in touch with various stakeholders responsible for disseminating the rules regarding refunds. It is unclear at this point whether refunds should be requested from the ticketing carrier or directly from the U.S. Internal Revenue Service (IRS).

At this time, ARTA Canada would recommend holding off on any refunds until the refund process is made clear.

It should be pointed out that if the U.S. Congress subsequently agrees to extend the FAA Reauthorization, the taxes above would be reinstated and further refunds may not apply.

ARTA Canada will keep members informed accordingly.