Rev. Rul. 80-53

1980-1 C.B. 252, 1980-8 I.R.B. 15.

                       Internal Revenue Service
                                 Revenue Ruling

               POSTAL SERVICE; AIRPORT TERMINAL HANDLING CHARGES

                          Published: February 25, 1980

Section 4271.--Imposition of Tax, 26 CFR 154.2-1: Tax on transportation of property by air.

  Postal Service; airport terminal handling charges. Terminal handling charges paid by the U.S. Postal Service to scheduled certificated air carriers for services in connection with handling mail at the airport are not subject to the tax imposed by section 4271(a) of the Code; Rev. Rul. 74-512 revoked.

  Rev. Rul. 74-512, 1974-2 C.B. 371, holds that certain charges paid by the United States Postal Service to scheduled certificated air carriers for services in connection with handling mail at the airport are subject to the tax imposed by section 4271(a) of the Internal Revenue Code on amounts paid for the transportation of property by air.

  Treasury and the Postal Service consulted with the Department of Justice as to the taxability of amounts paid by the Postal Service for these terminal handling charges.  The Department of Justice concluded that the charges paid by the Postal Service were accessorial non-taxable charges because under the facts involved in the particular case it was held that (1) the charges were not for services that could only be provided by the air carrier and (2) the charges were separately stated.

  Accordingly, Rev. Rul. 74-512 is hereby revoked.

Rev. Rul. 80-53, 1980-1 C.B. 252, 1980-8 I.R.B. 15.