Taxes on Holiday Air Travel

 
 
December 30, 2013

As anyone who’s ever bought an airplane ticket home for the holidays knows, taxes and fees on air travel can be substantial. We’ve written before on how much gas taxes and tolls can cost for holiday travel on roads, but taking to the skies is little better.

For my own travel home for Christmas, I paid $48.44 in taxes on a $229.76 ticket: that’s a 21 percent tax rate. But, according to Airlines for America, an airline industry group, federal airline taxes for a ticket totaling $300 average $61.49. That’s 20 percent of the ticket price, or the equivalent of a 26 percent tax.

Airline Taxes, Example Round Trip Ticket from DC to Kentucky

Cost

Total

Rate

Base Ticket Price

$229.76

 

Passenger Ticket Tax

$17.24

7.5% of base fare

Domestic Flight Segment Tax

$11.70

$3.90 per flight segment

September 11th Security Fee

$7.50

$2.50 per enplanement

Passenger Facility Charges

$12.00*

Varies by airport; up to $4.50

Total Taxes and Fees

$48.44

21.08%

*$3 for Charlotte airport, $4.50 paid twice for DCA arriving and departing

The list of federal airline taxes is long: 17 different taxes and fees, in fact. Some of these taxes and fees, like the Passenger Facility Charges (PFCs) that airports levy, can be seen as “user fees,” wherein airports bill passengers for the cost of expanding airport facilities and services. On my flight, I paid PFCs in Charlotte, and both going and coming at DCA in Virginia.

The passenger ticket tax, which works like a 7.5 percent sales tax on tickets, and the domestic flight segment tax, which is a $3.90 fee on each leg of a journey, both go to the Airport and Airway Trust Fund, which pays for the Federal Aviation Administration (FAA). These two taxes can also be seen as indirect user fees. The FAA oversees air traffic control, which is essential for air travel. However, the FAA is also a major regulator of the airline industry, which contributes to higher costs: so these aren’t “pure” user fees, any more than taxes that pay for a traffic cop’s salary is a “user fee” for highways.

The September 11th Security Fee (9/11 Fee) I paid, which will double to $5 per enplanement in 2014, is also only dubiously-defined as a user fee. Revenues raised from the 9/11 Fee fund Transportation Security Administration operations, especially security checkpoints at airports. On the one hand, it is true that passengers “use” these security services. On the other hand, probably very few of us wake up in the morning hoping we get to pay $2.50 (let alone $5) to walk through a full-body scanner and then get frisked.

There are even more taxes on international flights, and numerous taxes are applied to airline fuel which are baked into the price of the ticket. Thus, with airline taxes so high and set to go higher, taxes and fees represent a major share of air travel costs. Policymakers would do well to look into the “services” being provided, and decide if they are worth the cost, before they raise airline taxes and fees further.

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