The Passenger and the Ticket

Common Dreams - Today we deal with a fascinating tax question, insofar as tax questions can ever be described as fascinating to the average reader. The question we consider is when does an airline’s invention of a new way to extract money from its passengers constitute a really new invention and when is it simply putting old wine in new flasks. The wine in question is the myriad charges airlines have begun imposing on passengers in order to increase revenue. The question is important because airlines pay a 7-½% “Passenger Ticket Tax” on what they charge for tickets, but not on non-ticket related charges that they describe as “fees.”

It started modestly but insidiously, when airlines closed ticket offices outside of airports and shortly thereafter imposed a fee on a ticket purchased over the phone instead of on a computer. Delighted with the revenue thus raised, they conjured up additional fees. The most notorious was imposed on suitcases. Read more.