LB&I Tier III Issue: Loyalty Programs in Service Industries
Loyalty Programs in Service Industries
Industry: Heavy Manufacturing & Transportation
The Service is concerned about the appropriate tax treatment of Loyalty Programs such as “Frequent Flyer” programs in the air transportation industry and “Frequent Stay” programs in the hospitality industry. The Service is exploring the fact patterns and legal authorities to determine the appropriate method and accounting period for reporting revenue and expenses. The question is: Are revenues received by air carriers as payment for frequent flyer points deferrable under Rev. Proc. 71-21 or Rev. Proc. 2004-34?
Return to: Issue Tiering - LB&I