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Taxes on Holiday Air Travel

3 min readBy: Lyman Stone

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 taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es 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




Base Ticket Price


Passenger Ticket Tax


7.5% of base fare

Domestic Flight Segment Tax


$3.90 per flight segment

September 11th Security Fee


$2.50 per enplanement

Passenger Facility Charges


Varies by airport; up to $4.50

Total Taxes and Fees



*$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 feeA user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided. A user fee is not a tax, though some taxes may be labeled as user fees or closely resemble them. s,” 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 taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. 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.