IRS Form 1363 Guide: Export Exemption Certificate Rules

Introduction – What is Form 1363?

Form 1363, officially titled Export Exemption Certificate, is an federal tax document issued by the Internal Revenue Service (IRS). It is used in international logistics to exempt domestic air cargo shipments from federal excise taxes when goods are being exported from the United States.

The IRS governs Form 1363 under Internal Revenue Code (IRC) Section 4271 and Section 4272. Shippers and exporters execute this form and provide it to air carriers to certify that property transported by air is in continuous movement toward a foreign destination or a U.S. possession.

Purpose of the Form

Under IRC Section 4271, the IRS imposes a 6.25% federal excise tax on amounts paid for the transportation of property by air within the United States. However, tax law exempts goods that are being exported out of the country.

Form 1363 solves a key cash flow problem for exporters:

• It acts as a temporary tax suspension instrument, instructing the air carrier not to collect the 6.25% excise tax at the time of payment.
• It grants a 6-month window from the shipment date for the shipper to complete exportation and provide official proof of export to the carrier.
• It establishes a clear audit trail showing that domestic air freight legs were part of a continuous international export movement.

Who Needs to File This Form

Form 1363 is used by businesses and individuals involved in international trade and air freight logistics. You should execute Form 1363 if you are:

• A shipper or exporter paying for domestic air transportation of property destined for a foreign country.
• A business shipping goods by air to a United States possession (such as Puerto Rico, Guam, or the U.S. Virgin Islands).
• A freight forwarder or logistics company coordinating air cargo export movements on behalf of cargo owners.

Who Is Exempt / Not Required to File

Form 1363 is specifically designed for air cargo exports. You do not need to execute Form 1363 in the following situations:

• Purely Domestic Cargo: Air freight shipments that originate and terminate entirely within the United States without being exported.
• Non-Air Freight: Export shipments moving exclusively by ocean vessel, truck, or rail (which are governed by separate export rules).
• Direct International Flights: Flights where transportation begins or ends outside the U.S. and no separate domestic air cargo tax applies.
• Tax-Paid Shipments: Shippers who choose to pay the 6.25% excise tax upfront and later request a refund using Form 8849 or Form 843.

When to File

Timing for Form 1363 depends on whether you execute an individual certificate or a blanket certificate:

• Individual Exemption: Executed for a single export shipment and furnished to the air carrier at or before the time transportation charges are paid.
• Blanket Exemption: Executed for multiple export shipments over an extended period. Requires prior written permission from the IRS excise tax division before issuing to carriers.
• 6-Month Suspension Period: Once Form 1363 is delivered to the carrier, tax liability is suspended for 6 months. Official proof of export must be provided to the carrier within this 6-month window.

Where and How to File

For standard individual export shipments, Form 1363 is not mailed directly to the IRS. Instead, it is a business-to-business certificate.

The shipper completes Form 1363 in duplicate, giving the original signed form directly to the air carrier or freight forwarder handling the transportation. The shipper retains the duplicate copy alongside shipping documents. If applying for a Blanket Exemption, a written request must be submitted to the IRS address as per instructions for excise tax manager approval before issuing blanket forms.

Step-by-Step Instructions to Fill the Form

Form 1363 is a concise, one-page certificate requiring specific details about the cargo, carrier, and export destination.

Form 1363 Section Breakdown

Form Section	Field Title	Required Information & Instructions
Top Checkboxes	Exemption Type	Check either “Individual Exemption” (single shipment) or “Blanket Exemption” (multiple shipments with IRS approval letter date).
Shipper Details	Shipper Info & TIN	Enter the legal name, address, and Taxpayer Identification Number (EIN or SSN) of the shipper paying the transportation charges.
Carrier Details	Air Carrier Name	Enter the full name and address of the air transportation carrier or freight forwarder.
Shipment Data	Property & Route Info	Specify commodity description, total weight, shipment date, point of origin, port of exportation, total charges, and date paid.
Declaration	Signature & Date	Must be signed and dated by an authorized representative under penalties of perjury, certifying written intent to export.

Required Documents/Information Needed Before Filling

Before completing Form 1363 and clearing the 6-month tax suspension, assemble the following export records:

• Air waybill or contract of carriage showing continuous export movement starting before carrier delivery.
• Commercial invoice and packing list detailing commodity description and cargo weight.
• Payment receipts showing air freight charges paid to the carrier.
• Proof of Exportation (required within 6 months): Export Bill of Lading, Electronic Export Information (EEI/AES) filing confirmation, Customs Form 7512, or a foreign landing certificate.

Common Mistakes to Avoid

Errors on Form 1363 can result in unexpected excise tax bills from air carriers. Watch out for these common mistakes:

• Failing to Provide Proof of Export: Forgetting to furnish proof of actual exportation to the air carrier within the 6-month window, causing the carrier to collect the 6.25% tax.
• Using Blanket Certificates Without Approval: Issuing a Blanket Exemption to carriers without obtaining prior written approval from the IRS.
• Mailing Individual Forms to the IRS: Sending single Form 1363 forms to the IRS instead of giving the original directly to the air transportation provider.
• Lack of Continuous Movement Proof: Failing to show that the domestic air leg was tied directly to an unbroken export contract dated prior to shipment.

Penalties for Non-Filing or Errors

If a shipper fails to provide valid proof of exportation to the air carrier within 6 months, the temporary tax suspension terminates automatically. Under IRC Section 4291, the air carrier is legally required to collect the full 6.25% excise tax plus interest from the shipper.

Additionally, signing a false Export Exemption Certificate under penalties of perjury can trigger IRS excise tax audits, civil accuracy penalties, and criminal liability for tax evasion.

Related Forms or Schedules

Form 1363 interacts with several federal excise tax forms and publications:

• Form 720 (Quarterly Federal Excise Tax Return)
• Form 8849 (Claim for Refund of Excise Taxes)
• Form 843 (Claim for Refund and Request for Abatement)
• Form 720-X (Amended Quarterly Federal Excise Tax Return)

Frequently Asked Questions

Does Form 1363 get mailed to the IRS?

No. For routine individual export shipments, you give the original signed Form 1363 directly to your air carrier or freight forwarder. You only write to the IRS if you are requesting advance permission for a Blanket Exemption.

What excise tax rate does Form 1363 exempt?

Form 1363 suspends and exempts the 6.25% federal excise tax imposed under IRC Section 4271 on amounts paid for the transportation of property by air within the United States.

What is the difference between an individual and a blanket exemption?

An individual exemption applies to a single export shipment. A blanket exemption covers multiple export shipments over an extended period but requires prior written approval from the IRS.

What documents count as proof of exportation?

Acceptable proof includes an Export Bill of Lading, a copy of the air waybill signed by the foreign carrier, an Electronic Export Information (EEI/AES) confirmation, or a foreign landing certificate.

What happens if goods are not exported within 6 months?

If proof of export is not provided within 6 months from the date of origin shipment, the tax suspension ends, and the air carrier must collect the 6.25% tax from the person who paid for transportation.

Can I get a refund if I accidentally paid the air freight excise tax on an export?

Yes. If you paid the excise tax on an exempt export shipment, you can request a credit or refund from the carrier or file Form 8849 (or Form 843) directly with the IRS within the statutory refund period.

Conclusion – Key Takeaways

Form 1363 is an essential tax exemption certificate for international air freight. Key takeaways include:

• Exempts export air cargo from the 6.25% federal transportation excise tax under IRC Section 4271.
• Given directly to the air carrier or freight forwarder at or before payment.
• Provides a 6-month temporary suspension of tax liability.
• Requires furnishing official proof of export to the carrier within 6 months.
• Blanket exemptions require advance written approval from the IRS.