Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 56-91

1956-1 C.B. 522

Caution: Obsoleted by Rev. Rul. 69-227

IRS Headnote

The tax on the transportation of persons, imposed by section 4261 of the Internal Revenue Code of 1954, which has been properly collected on the amount paid for a ticket for transportation may not be refunded, in case of the nonuse of the ticket, unless the amount paid for the transportation service is also refunded.

Full Text

Rev. Rul. 56-91

Certain carriers have included in their tariffs a restriction which, in case of the nonuse of tickets for transportation and for seating or sleeping accommodations, prohibits refund of amounts paid therefor unless such tickets are cancelled within the period prescribed by the tariff. Advice has been requested whether the transportation tax collected on payments for the unused tickets may be refunded where the carrier refuses to refund the charges for the transportation service.

Section 4261(a) of the Internal Revenue Code of 1954 imposes a tax upon the amount paid within the United States for the transportation of persons by rail, motor vehicle, water, or air. Section 4261(c) of the Code imposes a tax upon the amount paid for seating or sleeping accommodations in connection with such transportation. Section 4261(d) provides that the tax on transportation of persons shall be paid by the person making the payment subject to the tax. Section 6415(d) provides in part that any person making a refund of any payment on which the tax on transportation of persons has been collected may repay therewith the amount of tax collected on such payment.

The tax on transportation of persons applies to the payment for the transportation and not to the actual transportation itself. Therefore, the tax attaches at the time the payment is made. The fact that the transportation takes place at a later date or never takes place does not affect the taxability of the payment.

Accordingly, it is held that, in case of the nonuse of a ticket for transportation or for seating or sleeping accommodations, the transportation tax properly collected thereon may not be refunded unless the carrier also refunds the payment for the transportation service.