Who Files Air Transportation Tax on Form 720
Whoever receives the payment for air transportation files. That is the test in the Form 720 instructions, and it reaches past scheduled airlines to charter operators and some travel sellers. That person must collect the tax, submit it, and file Form 720 to report the amount collected, or considered collected, for the quarter.
The traveler or shipper is liable for the tax, but the filing work sits with you. This article is for finance staff at carriers and charter operators who need to see the whole duty at once: the airline tax rate on each line, the deposits, and the schedule. Figures in the example are invented.
The three air transportation lines on Form 720
| IRS No. | Tax | 2026 rate |
|---|---|---|
| 26 | Transportation of persons by air | 7.5% of amounts paid, plus $5.30 per domestic segment |
| 27 | Use of international air travel facilities | $23.40 per person generally; $11.70 for a domestic segment beginning or ending in Alaska or Hawaii, departures only |
| 28 | Transportation of property by air | 6.25% of amounts paid |
All three sit in Part I of the form under Communications and Air Transportation Taxes. The flat amounts are for calendar year 2026 and generally rise each year for inflation. None of the three applies on a flight where the surtax on fuel used in a fractional ownership program aircraft is imposed; that surtax goes on IRS No. 13. For how rates compare, see the 2026 air transportation tax rates.
Is your business the filer?
| You are... | Filing duty |
|---|---|
| A scheduled carrier selling your own tickets | You collect, deposit, and file. |
| A charter operator paid directly by the customer | You collect, deposit, and file. The segment tax is multiplied by passengers. |
| A carrier taking cargo payments, in the business of transporting property by air for hire | You collect, deposit, and file IRS No. 28. |
| A travel agency that is an independent broker, selling tours on aircraft it charters | You collect the tax, file the returns, and pay it over. |
| A travel agency selling tours as an airline's agent | You collect the tax and remit it to the airline. The airline files. |
| A carrier on the initial segment when tax was not paid at the time of payment | You become liable, for transportation that begins or ends in the United States. |
Small operators should check two rules first. Transportation on an aircraft with a maximum certificated takeoff weight of 6,000 pounds or less is outside these taxes unless it runs on an established line, and jet-powered aircraft are always in. Certain payments for aircraft management services are also exempt. Details are in the exemptions guide.
What one quarter looks like in numbers
Northern Lift Air (invented) adds up one quarter of activity. Each line is the total for the quarter, and the two parts of IRS No. 26 are combined into one figure.
| Activity | Math | Tax | Goes on |
|---|---|---|---|
| Passenger amounts paid: $1,200,000 | $1,200,000 x 7.5% | $90,000.00 | IRS No. 26 |
| Domestic segments: 15,000 | 15,000 x $5.30 | $79,500.00 | IRS No. 26 |
| International passengers: 1,000 | 1,000 x $23.40 | $23,400.00 | IRS No. 27 |
| Alaska or Hawaii departures: 500 | 500 x $11.70 | $5,850.00 | IRS No. 27 |
| Cargo amounts paid: $200,000 | $200,000 x 6.25% | $12,500.00 | IRS No. 28 |
| Total | $211,250.00 | Part I |
That gives $169,500.00 on IRS No. 26, $29,250.00 on IRS No. 27, and $12,500.00 on IRS No. 28. Your own amounts come from your sales records, and the air transportation calculator can check individual tickets.
How deposits work: regular or alternative method
Semimonthly deposits are generally required, by electronic funds transfer. A semimonthly period is the first 15 days of a month, or the 16th through the last day. No deposit is required if net Part I liability for the quarter is $2,500 or less; the tax is then payable with the return.
| Regular method | Alternative method | |
|---|---|---|
| Based on | Taxes actually collected in the period | Taxes in amounts billed or tickets sold in the period |
| Considered collected | When collected | First 7 days of the second following semimonthly period |
| Deposit due | By the 14th day after the period, generally the 29th or the 14th | By the third business day after that seventh day |
| Schedule A | Line 1, boxes A through G | Line 2, boxes M through S |
Each deposit must be at least 95% of net tax liability for the period, unless the safe harbor rule applies. To use the alternative method, you must keep separate accounts of the tax in amounts billed or tickets sold each month. Timing shifts as a result: amounts billed in December, January, and February are reported as first quarter tax. See regular vs. alternative method for more on how each one is reported.
What to pull together before you file
- Total amounts paid for taxable passenger transportation, including seat selection, premium seating, online booking fees, and deadhead charges.
- Count of domestic segments, leaving out those to or from rural airports. For charters, multiply each taxable segment by the passengers on board.
- Per-person counts for international flights and for Alaska or Hawaii departures.
- Amounts paid for cargo. If one amount covered both people and property, make a reasonable allocation supported by adequate records.
- Net liability for each semimonthly period and the deposits you made.
- Any repaid tax. A collector can claim a credit or refund only after repaying the tax or getting the payer's consent.
Filing air transportation tax online
If you are looking for excise tax software for an airline or charter operation, these are the facts about EasyFile720. It is an IRS-authorized e-file provider for Form 720, and it covers Part I with Schedules A and C.
- Rates for the return are built in, and the math is calculated once you enter your figures.
- Validations catch common mistakes before you submit, and you sign electronically.
- Past returns stay in your account, and you receive the IRS acknowledgment electronically once the return is accepted.
- Preparers can file for multiple client businesses under one account.
You still choose your deposit method and provide your counts. See the page for airlines and charter operators and the air transportation tax overview, or go straight to filing Form 720 online. An account is free, and each filing is $39.95, or $35.00 a filing on the Full Year Plan.
FAQ
How long should a carrier keep excise tax records?▼
The instructions say to keep records supporting all claims and exemptions for at least 4 years from the latest of the date the tax became due, you paid it, or you filed a claim.
What if a customer will not pay the tax?▼
You must file a separate uncollected tax report with the customer's name and address, the service, the amount paid, and the date paid. It is mailed to the IRS in Cincinnati, not filed with Form 720.
Do I need Schedule A if my liability is small?▼
Yes for Part I taxes. The instructions say to complete Schedule A for each semimonthly period even if your net liability is under $2,500.
Does a helicopter tour operator file?▼
If the flights are taxable and the operator receives the payment, yes. Publication 510 exempts certain helicopter uses, such as emergency medical transportation, but not helicopter flights generally.
File air transportation tax online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: Form 720 (Rev. June 2026); Instructions for Form 720 (Rev. June 2026); IRS Publication 510 (Rev. December 2025). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
