Air transportation taxes. For transportation beginning in 2002, the tax on transportation of persons by air is increased to $3.00 for each domestic segment. The percentage tax remains at 7.5%.

For amounts paid during 2002, the tax on the use of international air travel facilities is $13.20 for flights that begin or end in the United States or $6.60 for domestic segments that begin or end in Alaska or Hawaii (applies only to departures).

Luxury tax. For 2002, the luxury tax on a passenger vehicle is reduced to 3% of the amount of the sales price that exceeds the base amount of $40,000. The base amount is increased for electric vehicles and clean-fuel vehicles.

Form 720 due date. Beginning with the 4th quarter of 2001, you must file Form 720 by the last day of the month following the calendar quarter for which the return is made. Form 720 for that 4th quarter is due January 31, 2002. The rule that allowed you to file by the last day of the second month following the calendar quarter for certain taxes has been eliminated. See Due dates under Filing Form 720, later.

Deposit threshold. You do not have to deposit excise taxes for a calendar quarter if the net tax liability for the quarter is not more than $2,500. Previously, the amount was $2,000.

Deposit due dates. One deposit rule, the regular method, applies for all taxes that have to be deposited other than those deposited under the alternative method. You must make deposits under the regular method by the 14th day following the semimonthly period. The deposit date for taxes deposited under the alternative method was not changed. The previous deposit rules (9-day rule, 14-day rule, and 30-day rule) have been eliminated. See When To Make Deposits under Paying the Taxes, later.

Amount to deposit and safe harbor rule. Your deposit of taxes for a semimonthly period generally must be at least 95% of your net tax liability incurred during that period, unless the safe harbor rule applies. Previously, your deposit had to equal the amount of your net tax liability. The current liability safe harbor rule has been eliminated. However, the look-back quarter safe harbor rule still applies. See Amount of Deposits and Safe Harbor Rule under Paying the Taxes, later.

Amended Form 720. Form 720X is used to make adjustments to liability reported on Forms 720 filed for previous quarters. Part I of Schedule C (Form 720) has been eliminated.

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