Tax-holiday for airline tickets

The temporary shutdown of the FAA – the Federal Aviation Administration – due to a spat over $16.5 million in subsidies to 13 rural communities, means a temporary tax holiday for anyone who buys an airline ticket before the issue is resolved.

The shutdown means that, starting Friday night, airlines don’t have the authority to collect federal excise ticket taxes until congress reinstates them.

A release sent out by Alaska Airlines lists the taxes that will not be collected:

• The 7.5% tax generally applicable to domestic transportation – as well as the 7.5% tax on amounts received from the sale of frequent flier 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.

On a $300 round trip ticket, notes Alaska Airlines, this represents a savings of about $44 or about 14 percent.

What are you waiting for?

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