PLR 1108024: Organ recovery charter flights exempt from air transportation taxes

Plain-English summary

The IRS ruled that an organ procurement organization's domestic charter flights for organ recovery and transport qualified for the emergency medical services exception to the air transportation taxes. The flights used fixed-wing aircraft weighing more than 6,000 pounds and were dedicated to transporting the transplant team, staff, and recovered organ between the donor hospital and transplant center. The IRS concluded that these flights were equipped for and exclusively dedicated to acute care emergency medical services under section 4261(g). Amounts paid or received for the qualifying charter flights were therefore not subject to the taxes under sections 4261 and 4271.

Ruling snapshot

• Question: Are the organization's domestic organ recovery charter flights exempt from the taxes on air transportation of persons and property?
• Outcome: Approved
• Key authorities: IRC §§ 4261, 4261(g), 4262, 4271, and 4272

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201108024 Third Party Communication: None
Release Date: 2/25/2011 Date of Communication: Not Applicable
Person To Contact:
Index Number: 4261.00-00 -----------------------, ID No. -----------------
Telephone Number:
-------------------------------------------------------- ---------------------
------------------------------ Refer Reply To:
---------------------- CC:PSI:B07
----------------------------- PLR-136560-10
Date:
October 08, 2010

X = --------------------------------------------------------------------------------------------------
-------------------------

n = -

Region = -------------------------------------------------------------------------------------

Network = ---------------------------------------------------------

Dear --------------:

   This letter responds to a letter dated August 19, 2010, requesting a ruling under

§ 4261 of the Internal Revenue Code.

    The facts submitted state that X is a federally designated organ procurement

organization (OPO) under 42 USC 273 and a § 501(c)(3) organization. X organizes the
recovery, preservation, transportation and distribution of human organs and tissues
for transplantation in the n states of Region. X works with numerous hospitals and
transplant centers to coordinate organ transplants.

     X responds to notifications from acute care hospitals in Region of recent or

imminent deaths. Following this notification, X screens the potential donor and may
send staff to the hospital to make a determination of the suitability of the donor's organs
for transplant. When a potential donor is identified, X obtains the appropriate consent
and takes responsibility for maintaining the donor body until the organs have been
removed for transplant.

    After X has made a determination that an organ is suitable for transplantation,

the organ is matched with an appropriate recipient though a system maintained by
Network. The donated organs may be matched with a recipient inside or outside of
Region.
PLR-136560-10 2

   If an organ screened by X is matched with a recipient outside of Region, the

OPO from the recipient's region will generally arrange to send a transplant team to the
hospital where the donor is located to remove the organ and return it to the transplant
center in its region for the recipient's transplant surgery. If an organ screened by X or
another OPO is designated for a recipient within Region, X will arrange for a transplant
team to travel to recover the organ and transport it to the transplant center within
Region.

   X assembles the transplant team and arranges for them to travel to the donor

hospital to recover the organ. Once the organ has been recovered, it is preserved,
packaged and transported with the transplant team to a transplant center in Region
where the transplant surgery immediately commences. In most cases, the transplant
team that recovers the organ includes the surgeon or surgeons who will perform the
transplant surgery. X staff also travels with the transplant team to assist with the
recovery, preservation, packaging and transportation of the organ.

     Air travel is usually required to recover an organ and transport it to a transplant

center. Flights must take place on very short notice at any time day or night, and are,
therefore, unscheduled. The success of the surgery is dependent, in part, upon the
speed at which the organ can be recovered and transported to the transplant site. To
facilitate this process, X frequently charters fixed-wing aircraft having a maximum
certificated takeoff weight in excess of 6,000 pounds from a charter operator. The
charter operator either provides the flight directly or through a subcharter arrangement.
The flight is solely used to transport the transplant team and X staff to the donor hospital
and then transport them along with the recovered organ to a transplant center. Aircraft
is equipped with the medical equipment necessary to transport the organ to the
transplant site, such as specialized ice storage containers. In some instances, the
flights may also be equipped with an "organ pump" in order to help maintain the function
of the organ prior to transplantation.

   X requests a ruling that its domestic charter flights to and from organ donation

recovery sites constitute air transportation described in § 4261(g), and that any amount
paid or received by X relating to such flights are exempt from the taxes imposed under
§§ 4261 and 4271.

   Section 4261(a) imposes a 7.5 percent tax on amounts paid for taxable

transportation of any person. Taxable transportation is defined in § 4262(a)(1) to
include transportation by air that begins and ends in the continental United States.

    Section 4271(a) imposes a 6.25 percent tax on amounts paid for the taxable

transportation of property. Such tax is imposed only on amounts paid to a person
engaged in the business of transporting property by air for hire. Taxable transportation
is defined in § 4272 as transportation by air which begins and ends in the United States.
PLR-136560-10 3

     Section 4261(g) provides that no tax shall be imposed under §§ 4261 or 4271 on

any air transportation for the purpose of providing emergency medical services -- (1) by
helicopter, or (2) by a fixed-wing aircraft equipped for and exclusively dedicated on that
flight to acute care emergency medical services.

    Based on the facts submitted and representations made, we conclude that X's

domestic charter flights to an organ recovery site and from a recovery site back to the
transplant site that involve fixed-wing aircraft having a maximum certificated takeoff
weight in excess of 6,000 pounds are equipped for and exclusively dedicated to acute
care emergency medical services within the meaning of § 4261(g). Accordingly, no tax
will be imposed under §§ 4261 or 4271 for such charter flights

   Except as specifically set forth above, no opinion is expressed or implied as to

the federal tax consequences of the transaction described above under any other
provision of the Code.

  This ruling is directed only to the taxpayer on whose behalf it was requested.

Section 6110(k)(3) provides that it may not be used or cited as precedent.

    In accordance with the power of attorney on file with this office, copies of this

letter are being sent to X's authorized representatives.

                                   Sincerely,



                                   Stephanie Bland
                                   Senior Technician Reviewer, Branch 7
                                   Office of the Associate Chief Counsel
                                   (Passthroughs & Special Industries)

Enclosures (2)
Copy of this letter
Copy for section 6110 purposes

cc: