We figured we’d answer this question before you even knew you were going to ask it. When you check your Hertz car rental bill after Oct. 1, you’ll likely find a new tax on that bill related to frequent flyer miles. For years, Hertz has been passing along a federal tax of 7.5% on the sale of frequent flyer miles to customers – even though you didn’t buy the miles. While we have commented before on the practice of Hertz telling customers it HAD to collect that tax for the government, the company has decided to no longer refer to it as the “Frequent Flyer Tax Recovery Surcharge” and will now refer to it as the “Frequent Flyer Surcharge.” Rather than charging you 7.5% (this method actually allowed us to figure out how much Hertz was paying for miles), Hertz will assess a surcharge equivalent to $0.50 per day up to a maximum of $2.00 per rental. In the fine print, Hertz says that “The amount assessed is collected by Hertz to offset a portion of Hertz’ annual cost of participation in Frequent Flyer programs.” This is in effect for rentals in the U.S., Puerto Rico and Canada when the renter chooses to receive frequent flyer miles or credits. The surcharge is not applicable to mileage/points or credits earned on international airlines, hotel programs or other non-airline frequency programs.
NOTE: At the end of the day we don’t argue the fact that Hertz has a right to run its business and protect expenses such as these. However, the manner in which Hertz continues to goof around with this leaves them open to us picking on them. Hertz is now asking for more than the 7.5% federal excise tax and wants us to subsidize its involvement with frequent flyer programs? All this for a bonus mile for every dollar I spend? Hell, Hertz, my next rental with you will likely only earn me 40 miles. You need help with that? My guess is that those 40 miles will cost you 70 cents and, of that, you want me to pay 50 cents. I must be missing something here. Final Word: You are a fine car rental company you just need to have Dr. Laura chat with you about your love/hate relationship with frequent flyer miles.