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Tax Free Domestic Airline Ticket Party? Evidently Not Yet

September 28, 2007 | Posted in: Airfare News

It looks as though congress passed this legislation about a week ago (H.R. 2881 FAA Reauthorization Act of 2007) and Bush has said he will sign it before 1st October deadline.

According to a press release from the House Transportation and Infrastructure Committee:

The House today approved and sent to the Senate a bill providing a temporary extension of Federal aviation programs through the end of 2007. The current authorization expires on September 30, and some programs would lapse without an extension.
The House approved a new, four-year authorization bill on September 20, and a companion bill is pending in the Senate. Todays action would provide the two chambers with additional time to finish work on that legislation.

The U.S. based airline ticket taxes are set to expire this Sunday 30th of September.

Evidently our legislators in D.C. haven’t completely taken action on this expiration…

We are talking about tens of millions of dollars a day in taxes including:

  • 7.5% US Ticket Tax (applied to all U.S. domestic airfare)
  • $3.40 Flight Segment Tax (charged for each takeoff and landing)
  • $15.10 US International Departure Tax (charged for U.S. based international departures)
  • $15.10 US International Arrival Tax (charged for U.S. based international arrivals)

This revenue, while collected by the airlines is destined for the government, so it really doesn’t have much monetary effect on the airlines, other than probably causing a rush to buy airline tickets.

It would seem doubtful, that revenue intended for the FAA and this most pressing time — based on the recent increases in flight delays and cancellations (a much discussed topic even by our president), would be allowed to lapse.
Putting this into perspective on what taxes we pay on an airline ticket — a $200 out the door roundtrip (connecting) airline ticket today, would in theory cost approximately $175 after midnight on Sunday — for every airline ticket sold that departs/arrives from/to the U.S.

8 Responses to “Tax Free Domestic Airline Ticket Party? Evidently Not Yet”

  1. David M. says:

    Oh well, no tax break. Besides, I bet the carriers would have raised fares to keep the reference price the same.

  2. jason says:

    Yeah right the government give a tax break! Come on, the need another 50 billion for the war, opps I mean occupation of Iraq. The airlines are in so much trouble they need all the help this break might have boosted the flights for them, oh well guess we will never know. Sorry for whining.

  3. Andrew Leonard says:

    I frequently fly to the UK and mainly use US Airways, for no other reason than they offer a direct flight from my local airport. I have tried to shop around and on base prices can see huge savings. However when taxes etc are calculated all the fares seem to come within $20 – $30 of each other.
    Some charge as little as $150 whilst others have up to $400 in extra charges. But when all is calculated they all arrive at a similar price to the consumer.

    My belief is that the taxes and fees part of the cost is being manipulated as some ebay sellers do with delivery charges.

    Is there a tax chart of charges I wonder. In all my flights I have equaled the US Airways price but never really beaten it by much to be worth the hassle of all the changes. Lets hope Open Skies will achieve clear pricing.

  4. RP Wescott says:

    Is there no tax break anywhere for non-profit organizations buying tickets with organization credit card?

  5. Rick Seaney says:

    RP,
    I’d say that’s a question for your tax preparer!
    Rick

  6. Joan Bohn says:

    Why is there a departure tax shown when I book directly through an airline and not shown when I look at Travelocity, Orbitz, or Expedia? It amounts to approximately $14.00 per person on a round trip ticket.

  7. Bill Sheehy says:

    Rick- I have had it with the ridiculous taxes that are applied to every airline and hotel trip. From San Diego to Cabo San Lucas the taxes on a $228 round trip airline ticket was $123 . No more. I am not going to travel on the airlines anymore. Same with the hotels and the rip off taxes applied to each stay. I thought Europe was bad with all their socialistic taxes but its the same here and Obama will see to it that it will get worse. The Mexican taxes are insane, the TSA people continue to rip off my TSA approved locks and I never see them again. Enough is enough.

  8. Rick Seaney says:

    Joan,
    Just want you to know that when you see the airfares on FareCompare.com, they are “total” fares that include all surcharges and taxes.
    Hope this helps,
    Rick

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