If you buy a discount airline ticket with a cancellation penalty and then don't fly, you would get a refund minus the penalty.

But what about the 8% domestic tax? Is it refunded in full or do you get back the tax that is the same percentage as the cancellation penalty? Or do you lose the tax?

Actually, it depends on the cancellation penalty and the airline. And industry observers believe that there should be a full tax refund, with the cancellation penalty only applying to the fare.

Despite an IRS ruling to clarify the situation, there still seems to be industry-wide differences among the airlines on refund policies concerning this tax.

An Internal Revenue Service spokesman said an airline can refund the same percentage of the tax as used for the cancellation penalty.

"It's up to the airline to ask for the refund, as the code doesn't require it," the spokesman said. "The refund should be in proportion to the cancellation penalty, and whatever amount isn't funded to the passenger has to be given to the IRS."

For example, however, what if you purchase a nonrefundable ticket and then don't fly.

"The whole amount of the tax is due the government," the IRS spokesman added.

The IRS made a ruling (No. 89-110) in September because of queries made by passengers, airlines and its own representatives.

But not all airlines have the same policy.

USAir refunds the entire tax if someone cancels on a fare with a penalty, plus the appropriate amount of the ticket.

"If it were a $100 fare with a 50% cancellation penalty, the passenger would get back $58. If it were a nonrefundable fare, the entire tax would go to the IRS, and it would be up to the passenger to file the appropriate claim for it," a spokesman said.

Delta Air Lines, however, refunds the same proportion of the tax as called for by the cancellation penalty on the ticket. "Passengers would get back, for example, half of the tax, if the cancellation fee was 50%. But if it's a nonrefundable fare, we turn the entire amount over to the IRS. It doesn't pay for us to issue checks for these amounts," a Delta spokesman said.

Passengers, however, can always apply to the IRS for a refund of the tax on a nonrefundable fare, the Delta spokesman added. "The tax on fares is a user tax, and if the passenger doesn't use the service, the tax is no longer due."

However, the IRS spokesman said that refund of the 8% domestic air tax would have to come from the airlines.