Airfare taxes expiring?

Discussion in 'General Discussion | Miles/Points' started by kellio, Jul 22, 2011.  |  Print Topic

  1. kellio
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    kellio Gold Member

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    Just received this notification.

    Notification Message
    --------------------------
    *** UPDATE 22JUL 2011 ***

    Notification from ATA:

    Friday, 2:55 pm

    Both the House and Senate have now adjourned for the weekend, so the taxes will expire as of midnight, July 22, 2011.

    Sabre will expire these taxes as of Midnight 22July. Any tickets issues 0001 23July forward will be without the taxes as outlined in the previous (below) update.

    ___________________________________________________________

    *** UPDATE 21JUL 2011 ****
    The following detail has been received from ATA. Please plan accordingly. Sabre will continue to repost this SAN as more information is disclosed.

    ***
    As of early Thursday afternoon, it still appears there is a strong possibility that the US aviation excise taxes will expire as of July 23. I would suggest that you continue to plan for their expiration. Below is a list of the taxes affected, as well as a list of the fees that are not affected. We will keep you informed if we receive more information.

    Taxes Affected
    Ticket Taxes
    For tickets sold beginning July 23, 2011 the following taxes would not apply:
    . The 7.5% tax generally applicable to domestic transportation (as well the 7.5% tax on amounts received from the sale of "frequent flyer miles".)
    . The $3.70 domestic segment tax.
    . The $16.30 international arrival/departure tax.
    . The $8.20 departure tax for flights between Alaska/Hawaii and the mainland US.

    The expiration presumably occurs based on the date at the location where the ticket is purchased.

    If a ticket was sold when the taxes were in effect, but the travel begins on a date when the taxes are not in effect, the taxes previously paid will be considered an overpayment. The person who paid the tax can request a refund from the airline or file a claim for refund with the IRS. Based on several court cases files by passengers when the taxes expired in 1996-97, airlines are not required to issue refunds (the taxes collected, of course, are required to be remitted to the IRS).

    Cargo Tax
    The 6.25% tax generally applicable to domestic cargo transportation would expire for amounts paid beginning July 23, 2011. Similar to the ticket taxes, if the transportation was paid for when the tax was in effect, but the transportation begins when the tax is not in effect, the previously paid tax will be considered an overpayment.

    Fuel Taxes
    The 4.3 cents per gallon tax on jet fuel used in commercial aviation would not be affected.
    The 19.3 cent per gallon tax on aviation gasoline would be reduced to 4.3 cents per gallon.
    The 21.8 cent per gallon tax on jet fuel used in noncommercial aviation would be reduced to 4.3 cents per gallon.

    Fees Not Affected
    . PFCs
    . September 11 Passenger Security Fee
    . APHIS passenger inspection fee
    . APHIS aircraft inspection fee
    . Customs passenger inspection fee
    . Immigration passenger inspection fee
     
  2. SC Flier
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    SC Flier Gold Member

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  3. RestlessLocationSyndrome
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    RestlessLocationSyndrome Silver Member

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    Very interesting. So if you stack the savings this weekend on top of the 10% discount on American flights that you get via AA gift cards from CostCo, you could be saving more than 20% off regular fares from Saturday until things get resolved.
     
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  4. kellio
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    kellio Gold Member

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    Very nice.

    The implentation notice I received from Sabre says the install will occur tonight so they are definitely making the update.
     
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  5. kellio
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    kellio Gold Member

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    On the other hand I wouldn't put it past the airlines to load some fare increases tonight.
     
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  6. kellio
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    kellio Gold Member

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    hmm. I think I just proved the above point. Of course it could be just coincidence;)

    I've been checking 2 markets lately and almost purchased last night.

    PHX-OAK went up 45.00 rt
    PHX- ORD went up about 60.00 rt
     
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  7. mht_flyer
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    mht_flyer Gold Member

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    I just booked a ticket just now :( without first seeing this thread .... Luckily CO lets me cancel w/in 24 if I can get it cheaper without these taxes.

    I'll be on the lookout tomorrow morning to see if the price is cheaper :)
     
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  8. chitownflyer
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    chitownflyer Silver Member

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    It is not uncommon for airlines to raise their fares over the weekend, and then lower them back to the previous level once the new week starts. I hope we do get a reprieve from US government airfare taxes.
     
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  9. Dencho

    Dencho Active Member

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    taxes are not calculated for all airlines. check it it just says zero. darn it i wish i had waited a day.
     
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  10. kellio
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    kellio Gold Member

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    The reprieve is there. But if I was a smart airline I would raise my fares during this period and no one would know.

    I just checked US and the US1/US2/ZP taxes have been removed.
     
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  11. Exiled in Express
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    Exiled in Express Gold Member

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    US seems to have implemented the removal of the 7.5% fee on mileage purchases as well. Checked a few trips I may have upcoming and am seeing ~4% drop in total price, if only I was certain enough to buy rhis week.
     
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  12. SC Flier
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    SC Flier Gold Member

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    Total taxes for a ticket that I checked on delta.com this morning came to just $14. Doesn't change the fact that the route often goes on sale for much less than today's price.
     
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  13. SC Flier
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    SC Flier Gold Member

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    Just got this on delta.com when clicking on the Taxes & Fees link for a price breakdown showing total of $28.00 for taxes.

    Taxes and Fees
    Retrieving Taxes and Fees. One Moment Please.
    An error occurred when retrieving the tax breakdown.
     
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  14. dc3
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    dc3 Silver Member

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    From the NY Times:
    Efforts to avert a shutdown of the Federal Aviation Administration failed on Friday amid a disagreement over a $16.5 million cut in subsidies to 13 rural communities, meaning that at midnight nearly 4,000 people were to be temporarily out of work and federal airline ticket taxes suspended.
    Lawmakers were unable to resolve a partisan dispute over an extension of the agency’s operating authority, which was to expire at midnight Friday.
    The subsidy cut was included by Republicans in a House bill extending operating authority for the F.A.A., which has a $16 billion budget. Senate Democrats refused to accept the House bill with the cuts, and Republican senators refused to accept a Democratic bill without them. Lawmakers then adjourned for the weekend.
    Underlying the dispute on rural air service subsidies was a standoff between the Republican-controlled House and the Democratic-controlled Senate over a provision in long-term funding legislation that would make it more difficult for airline and railroad workers to unionize.
    Obama administration officials have said the shutdown will not affect air safety. Air traffic controllers will remain on the job. But airlines will lose the authority to collect about $200 million a week in ticket taxes that go into a trust fund for F.A.A. programs.
    F.A.A. employees whose jobs are paid for with trust fund money will be furloughed, including nearly 1,000 workers at the agency’s headquarters in Washington, 647 workers at the F.A.A.’s technology and research center in Atlantic City and 124 workers at the agency’s training center in Oklahoma City.
    Airline passengers could save money on their airfares, but the situation is complicated. Federal taxes on a $300 round-trip ticket are about $61, according to the Air Transport Association.
    Airlines, alerted earlier this week that F.A.A. authority could expire, have been making adjustments to their computer systems and Web sites so that at midnight, taxes were to be no longer added to airfares, the association said.
    One airline, US Airways, was already raising fares. Other airlines may try to reap a windfall profit from the tax holiday.
    Passengers who bought their tickets before the shutdown, but who travel during the shutdown, may be due a refund, said Sandra Salstrom, a Treasury Department spokeswoman. That is because it is not clear whether the government can keep taxes for travel that takes place during a period when the government does not have authority to collect taxes, she said.
     
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  15. I was looking on CO for round trip flights from SEA to Europe last night. Today I noticed that the base fare has gone up...when I got the price including taxes it came out to the same as last night
     
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  16. PAinNY
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    PAinNY Silver Member

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    I booked a ticket on United back in April or so, it was $1,083.60 plus taxes of $69.20

    Checked the same dates today to see if the taxes would be lower, the base fare was $1,098 (approx $14 difference) but the taxes were $75.10 - I don't get it - there are no savings in taxes - if anything, they went UP
     
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  17. LizzyDragon84
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    LizzyDragon84 Gold Member

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    I've heard some airlines are taking advantage of the tax cut and raising the base airfare so that it was the same as when there were taxes. I wonder how long this tax-free situation will last.
     
  18. chitownflyer
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    chitownflyer Silver Member

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    This is definetely NOT cool! If the airlines do not want to reduce their fares, this is one thing, but the increase of base fares to make air fares increase is just awful.
     

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