Rev. Rul. 70-381

A domestic airline permits its employees and certain relatives to fly on its routes at reduced rates on a "space available basis." Upon presentation of a certain approved form to any of the airline's ticket counters, the ticket agent is required to collect a nominal charge and issue the individual a pass. The charge is one rate for a one-way trip and another rate for a round trip, regardless of their length. No refunds of the charges are made if the passes are not used within the time period stated on them.

Held, the charges made by the airline for the passes issued under the circumstances described above are amounts paid for transportation by air and, accordingly, are subject to the taxes imposed by section 4261 of the Internal Revenue Code of 1954.