Congress Complicates Airline-Tax Issue (Surprise!)

You all know that the FAA's $200 million/week habit was interrupted by Harry Reid's intransigent insistence that YOU should pay $3700/passenger to get people to/from East Noplace, NV.

That changed last week; Reid decided that he'd pass the revised House version of the bill all by his lonesome.  Bet you didn't think the Constitution provided for that, eh?

Further, the Sec/Transportation, La Hood (aptly named fellow, indeed) now has the "authority" to "exempt" airports from the House restrictions on passenger subsidies.  Another interesting twist on Constitutional Government from the DC "Mind", no?

Oh.....that's not all!

During the tax-hiatus, some airlines did NOT collect the tax (7.5%); others collected the tax and kept the money; others collected it, then refunded it to passengers.

Well!  The IRS has pronounced on the question!

Friday morning, the status of that cookie jar containing more than $400 million in cash collected from the traveling public remained in limbo ... until the IRS weighed in that afternoon. A terse unattributed statement on the agency's website announced the IRS wanted its money. 

Congress' stop-gap funding of the FAA, the IRS determined, "was retroactive" to July 23, the date of the original lapse, and as such, neither the airlines or the passengers who paid the tax are entitled to the money. The position taken by the IRS was totally unanticipated, say numerous published reports.

And some people wonder why there is "uncertainty" in the business community.