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Airfare Taxes and Fees Explained

These days, travel-related taxes and fees can add up to as much as your base fare—more in a few cases. In addition to the financial bite, the tax picture is often muddled and hard to decipher, and total taxes seem to be climbing faster than a 757 on a cold day.

As one reader puts it, “Could you explain taxes and fees on international flights? It seems to me that these charges have gone up considerably in the last year.” Total taxes have, in fact, increased in the last few years—some to fund increasingly expensive passenger services, some for increased security, and some just because travelers are an inviting target. Here’s an overview of the current situation.

Air tickets

The tax situation on domestic flights is relatively straightforward.

  • The U.S. government imposes an “excise” tax of 7.5 percent of the fare on all domestic tickets. By Department of Transportation (DOT) rules, airlines must include that tax in their advertised fares.
  • Airlines can omit other government fees and taxes from their published fares, but the government requires that airlines collect them at the time you buy your ticket. Taxes and fees include $3.30 per flight segment, with a maximum of four segments charged on any round-trip ticket, plus a $2.50 fee per departure to fund security—a fee that might be going up soon.
  • Individual airports are allowed to impose “passenger facility charges” (PFCs) up to $4.50 per departure, with a maximum of four fees per round-trip ticket.

U.S. government taxes and fees on international tickets are much higher.

  • The government charges a departure fee of $14.50 and an arrival fee of $14.50 on international flight tickets—again, collected when you buy the ticket.
  • The U.S. also charges returning passengers $7 for immigration, $5 for customs services, and $5 to fund animal and plant inspections. These, too, are collected when you buy a ticket.

Of course, other governments also get into your pocket.

  • Although rates vary from country to country, most foreign governments and airports add a mix of immigration, customs, airport, and other fees, collected when you buy your ticket.
  • In addition, some foreign airports demand a departure tax paid in cash, at the airport.

Just how much do taxes and fees add to a ticket? That’s hard to say exactly, since airlines play fun and games with the way they label fares and fees. I checked a mid-March flight from San Francisco to London on British Airways, for example, and found a total round-trip ticket price of $467. According to BA, the basic fare was $248 plus $219 in fees and taxes, for a total of $467. Clearly, BA is recouping some of those “fees,” since a round-trip base fare of $248 is ludicrously low even for shoulder-season.

For another take, I checked a trip from New York to London on MAXJet, the new all-business class airline. The round-trip fare quote was $1,358 base fare plus $134 in taxes and fees. Obviously, MAXJet was being more accurate than BA about what was fare and what was fee. The total tax and fee add-on was much lower for departure from the U.S. than on the return flight, which piled some very stiff British departure fees on top of the U.S. arrival, customs, immigration, and inspection fees.

The only current online source of information on foreign airline taxes I could find was a paid download costing $140 from IATA (International Air Transport Association). Obviously, I can’t present any sort of list here—or even some general rules. Some fees are based on a percentage of the ticket prices; others are per person regardless of ticket price. The big online agencies get around the question by simply stating something like “plus up to $200 in fees and charges” when you start to buy a ticket. For the most part, those agencies incorporate fees and taxes into their fare displays—sometimes as part of the advertised prices, sometimes as add-ons presented just before you buy.

Governments excuse the high travel taxes and fees largely on the basis that they pay for services that travelers use. And, in many cases, that’s true, but not always: The French have just imposed a stiff air ticket tax (up to $60) designed to pay for aid to underdeveloped countries.

Other travel taxes

Taxes aren’t confined to air travelers; almost everyone gets hit one way or another.

  • Ordinary state and local sales taxes usually apply to hotel accommodations, restaurant meals, and car rentals—although not always.
  • Many states, counties, and cities have enacted special taxes on hotel accommodations and restaurant meals—some in addition to sales taxes, some in place of sales taxes—that target mainly travelers but also catch lots of locals.
  • Car rentals—especially at airports—get hit with a laundry list of taxes and fees. Some are designed to help pay for airport-related facilities and services, some are enacted just because out-of-town travelers who rent cars are an inviting target, and some so-called “fees” are really additional revenue sources for the rental companies that should, in all honesty, be incorporated as part of the base price. In total, those fees and charges can exceed the base rental rate.

Can you avoid them?

If you fly, you can’t avoid that pile-up of taxes and fees. Your only out is to take a train or drive.

  • In theory, you can sometimes avoid hotel and restaurant taxes by staying in lower-tax suburbs rather than high-tax cities. But if you want to visit Boston, you probably figure it’s false economy to stay out in Newton to shave a few tax charges off your hotel bill.
  • Occasionally, on an expensive or long-term car rental, it makes sense to rent off-airport to avoid the very stiff fees and taxes on airport rentals. But all too often, renting off-airport is more hassle than it’s worth.

The bottom line is simple: Travelers who don’t vote in local elections are an inviting target for taxing authorities at all levels. For the most part, you have to accept that you have a large tax bull’s-eye on your back and get on with your trip.

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