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U.S. Government-Imposed Taxes on Air Transportation

Along with traditional income and payroll taxes, airlines and their customers (passengers and shippers) pay many special taxes and fees to a variety of authorities, both at home and abroad. Among the stated purposes of these taxes and fees are homeland (national) security, environmental protection, agriculture inspection, infrastructure enhancement, airport and airway operations and maintenance, and agency financing. See The Taxation of Air Transportation by Dr. Kenneth Button for an in-depth review. U.S. and foreign taxes have grown in number, amount, and scope since the advent of air transport.

 

The amount a passenger pays in taxes and fees on a ticket varies according to his itinerary, including the number of times he or she boards a new flight and at what airports. [Note: Foreign-levied aviation taxes are numerous and varied. The burden is exacerbated by tax “competition” between the U.S. and foreign governments, as well as local airport authorities, and has grown with the advent of post-Sept. 11 security fees. The most comprehensive and current source of tax information available is the IATA List of Ticket and Airport Taxes and Fees . Contact the International Air Transport Association ( IATA ) directly for pricing information.] In addition to the special taxes and fees captured in the table below, the Federal Aviation Administration also charges overflight fees to operators of aircraft that fly in U.S.-controlled airspace, but neither take off nor land in the United States. Taxes and fees shown do not include those levied directly on the airline (e.g., income, property, franchise, sales/use, payroll, fuel).

 

Special (Commercial/General) Aviation Taxes 1972 1992 2017
AIRPORT & AIRWAY TRUST FUND ( FAA )
Passenger Ticket Tax 1a (domestic) 8.00% 10.00% 7.50%
Flight Segment Tax 1a (domestic) $4.10
Frequent Flyer Tax 2 7.50%
International Departure Tax 3 $3.00 $6.00 $18.00
International Arrival Tax 3 $18.00
Cargo Waybill Tax 1b (domestic) 5.00% 6.25% 6.25%
Commercial Jet Fuel Tax (domestic flights not continuing ex-USA) 4.3¢
Noncommercial Jet Fuel Tax (domestic) — n/a to airline ops 7.0¢ 17.5¢ 21.8¢
Noncommercial AvGas Tax (domestic) — n/a to airline ops 7.0¢ 15.0¢ 19.3¢
Liquid Fuel used in a Fractional-Ownership Flight — n/a to airlines 14.1¢
ENVIRONMENTAL PROTECTION AGENCY (EPA)
LUST Fuel Tax 4 (domestic) 0.1¢ 0.1¢
LOCAL AIRPORT PROJECTS
Passenger Facility Charge Up to $3.00 Up to $4.50
DEPARTMENT OF HOMELAND SECURITY (DHS)
September 11th Fee 5 $5.60
APHIS Passenger Fee 6 $2.00 $3.96
APHIS Aircraft Fee 6 $76.75 $225.00
Customs User Fee 7 $5.00 $5.50
Immigration User Fee 8 $5.00 $7.00
1. (a) Applies only to domestic transport or to journeys to Canada or Mexico within 225 miles of the U.S. border; (b) Applies only to flights within the 50 states. Both a and b are prorated on journeys between the mainland United States and Alaska/Hawaii
2. Applies to the sale, to third parties, of the right to award frequent flyer miles
3. Does not apply to those transiting the United States between two foreign points; $8.90 on flights between the mainland United States and Alaska/Hawaii
4. Congress created the Leaking Underground Storage Tank (LUST) Trust Fund in 1986 to 1) provide money for overseeing and enforcing corrective action taken by a responsible party, who is the owner or operator of the leaking UST and 2) provide money for cleanups at UST sites where the owner or operator is unknown, unwilling, or unable to respond, or which require emergency action
5. Funds TSA at $5.60 per one-way up to $11.20 per round trip (was $2.50 per enplanement up to $5.00 per one-way trip from 2/1/02 through 7/20/14); suspended 6/1/03-9/30/03
6. Since 5/13/91 (passenger fee) and 2/9/92 (aircraft fee), funds agricultural quarantine and inspection services conducted by CBP (previously by the U.S. Animal and Plant Health Inspection Service ) per 7 CFR 354; APHIS continues to perform certain Agricultural Quarantine Inspection (AQI)-related functions that are funded by user fee collections
7. Since 7/7/86, funds inspections by U.S. Customs and Border Protection ; passengers arriving from U.S. territories and possessions are exempt; also see CBP cargo security site
8. Since 12/1/86, the majority of the collections fund inspections by U.S. Customs and Border Protection and a smaller portion of the collections fund certain activities performed by U.S. Immigration and Customs Enforcement that are related to air and sea passenger inspections
The following table illustrates the application of government-imposed taxes on a hypothetical domestic itinerary. Taxes shown do not include those levied directly on the airline (e.g., income, property, franchise, sales/use, payroll, fuel).
Sample Round-Trip Itinerary Sold January 1, 2017: Peoria (PIA) – Raleigh/Durham (RDU) via Chicago O’Hare (ORD)
Base Airline Fare $236.65
: Federal Ticket (Excise) Tax (7.5%) 17.75
: Passenger Facility Charge (PIA) 4.50
: Federal Security Surcharge (PIA-RDU) 5.60
: Federal Flight Segment Tax (PIA-ORD) 4.10
: Passenger Facility Charge (ORD) 4.50
: Federal Flight Segment Tax (ORD-RDU) 4.10
: Passenger Facility Charge (RDU) 4.50
: Federal Security Surcharge (RDU-PIA) 5.60
: Federal Flight Segment Tax (RDU-ORD) 4.10
: Passenger Facility Charge (ORD) 4.50
: Federal Flight Segment Tax (ORD-PIA) 4.10
Total Taxes 63.35
Total Ticket (Fare + Taxes) $300.00
Taxes as % of Fare 26.8%
Taxes as % of Ticket 21.1%

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