Rev. Rul. 58-367

Advice has been requested whether amounts paid by the governments of possessions of the United States for the transportation of persons are exempt from the tax on transportation of persons.

The Internal Revenue Code of 1954 contains no provisions for the exemption from tax of payments made by the Government of the United States or by the governments of possessions of the United States for the transportation of persons. However, pursuant to the provisions of section 307(c) of the Revenue Act of 1943, the Secretary of the Treasury authorized exemption from the tax imposed by section 3469 of the Internal Revenue Code of 1939 as to any payment for the transportation of persons furnished to the United States upon a United States Government transportation request (now United States of America transportation request). See Mim. 6194, C.B. 1947-2, 210, and Authorization of the Secretary of the Treasury, C.B. 1947-2, 211. This exemption continues in effect with respect to the tax imposed on the transportation of persons by section 4261 of the Internal Revenue Code of 1954.

It is held that amounts paid by the governments of possessions of the United States (which include, among others, the Virgin Islands, Guam, and American Samoa) for the transportation of persons are not exempt from the tax imposed by section 4261 of the Code, unless the transportation is furnished upon Standard Form 1169, United States of America transportation request.