A Primer on US Aviation Taxes That Apply on Domestic Flights

After seeing the comments on yesterday’s post about fuel surcharges, it dawned on me that there’s probably not a great understanding out there around exactly which fees and taxes are imposed upon travel in the US. I thought I’d take the time to walk through it here. Today, we’ll look at domestic taxes, but on Thursday, we’ll tackle international.

Below you will see a screenshot of a raw pricing display in Sabre for a roundtrip ticket from LA to Ft Lauderdale with a stop in Vegas on the way out but a nonstop return. All flights are on Spirit Airlines. This might look like something in a foreign language, but you’ll get it once we’re done breaking it down.

Sample Domestic Fare Display

 
Base Fare
You can see a base fare of $307.89. That’s the money that the airline keeps but it’s a number you have almost never seen as a traveler. What you used to see until rules changed recently to show only the final price was a $331 fare plus tax. That fare included both the base fare and the US Domestic Transportation excise tax (see below). Please note that if you look toward the bottom at the line starting with LAX, you will see a “Q95.81″ charge there. That is a fuel surcharge of $95.81 that is included within the base fare of $307.89 so it is taxed just like the fare. Spirit shows this on its website but otherwise you wouldn’t know it was there. I haven’t seen fuel surcharges applied another way domestically, but we’ll talk about how you see it internationally on Thursday.

US Domestic Transportation Tax (US)
As mentioned above, on all domestic tickets, there is a 7.5 percent tax that the federal government keeps. In this example, you can see the US tax is $23.11. Combined with the base fare, it’s $331 and that’s the fare that the airlines file in the system.

Segment Tax (ZP)
Next to the US tax, you’ll see the ZP tax. Several years ago, the feds lowered the excise tax to 7.5 percent from 10 percent and in the process added a segment fee so that taxes were distributed a little more evenly between cheaper and more expensive tickets. That tax revenue is kept by the government. Today, the charge is $3.80 per flight segment, but it periodically increases. Since we had three segments in this itinerary, it’s $11.40 total.

US September 11th Security Fee (AY)
In the last decade, the US has nationalized security as we are all well aware. To pay for this, there is a $2.50 charge per flight with up to two charges each direction. That’s why you see the AY charge of $7.50 here. Now, if we had two connections (three flights) on the way out, it wouldn’t go any higher because of the cap. This fee is kept by the federal government.

Passenger Facility Charge (XF)
The Passenger Facility Charge is an airport-specific charge that can be up to $4.50 per departure from each airport. Not all airports charge this, and they can charge less than $4.50 but it has to be approved before charging the fee. There was a recent effort to bump this up to $7.50 but it failed, so the cap remains. The money goes to airports for capital projects. In this itinerary, it’s $13.50 and you can see the breakdown in the fare calculation line below. If you look toward the bottom, you’ll see that there are three charges of $4.50 for when the passenger departs Los Angeles, Las Vegas, and Ft Lauderdale.

That is it for domestic charges. Pretty simple, right? You will see something that says XT in that screenshot, but that’s just an aggregation of all the taxes and fees. The total XT here is $55.51 for a total out of pocket cost of $363.40 for the purchaser.

If you look below that, you can see the fare bases which start with V going out and R coming back. That’s how the airline tie fares with fare rules, but it’s definitely a topic for another post.

There are a couple of little caveats to this system here. First, what counts as a domestic trip? If we turn to the IRS, we can see that it’s, of course, any trip between two US points. But it also includes trips within 225 miles of the US border in Canada and Mexico. That includes most major Canadian points.

One other odd little quirk. This only partially applies for travel between the Continental US and Hawai’i and/or Alaska. In those circumstances, the domestic tax only applies to the part of the transportation that occurs within 3 miles of the US (or 225 mile border) and when it enters Hawai’i and/or Alaska. So if I look at an LA to Honolulu ticket costing $2211.34, the domestic tax is only $0.66. That’s because nearly all of the flight occurs outside the taxable area. There is, however, an additional international facility fee that is charged. I won’t get into too much detail on this one, but just realize it’s a blend of domestic and international tax when it comes to Alaska and Hawai’i.

Like I said, on Thursday, we’ll talk about international tickets.


36 Responses to A Primer on US Aviation Taxes That Apply on Domestic Flights

  1. Tim says:

    I always wondered why British Airways charges $21.80 for an award ticket LAX-Hawaii, instead of just the 9/11 fees. They must be passing along the int’l taxes.
    Is there a way us mere mortals could get that fee breakdown?

    • CF says:

      Tim – That’s actually a pretty simple one. The international facilities fees end up being $8.40 each way on an LA to Hawai’i ticket so that’s $16.80. Then another $5 for the security fee assuming it’s nonstop each way and there you have it.

  2. DAB says:

    It took me a minute to get through the logic of the 9/11 fee…

    Out of curiosity, I have two circumstances:

    1) Let’s say your ticket is EUG->SFO->DEN->PIT and then PIT->ORD->SFO->EUG, which my sister in law does at the far back of the plane with her two year old… That’s $10 for the 9/11 fee?

    2) Let’s say your ticket is SAT->PHX->SFO, next day SFO->LAX, following day LAX->PHX->SAT. Is that $10 or $12.50?

    • CF says:

      DAB -On #1, that’s correct. But on #2, it’s capped at $10 as well. That’s a reason why it can sometimes show a bit cheaper to buy all tickets together vs separate one ways even if the fare is the same.

      • Austin says:

        Per my comment below, I thought that the 9/11 fee was capped on a one-way basis, with no regards to round trip. Thus, the circle routing DAB describes in scenario two would be treated as three one-way trips (unless the SFO stop was a connection rather than a layover, as I noted).

        Any fare savings would come from the fact that most round-trip fare bases can also be applied to circle trips as well, whereas separate tickets would all be fared on a one-way basis.

        • Austin for the AY tax stops/connections make no difference. It’s a max of $10.00 on a single roundtrip ticket (max $5.00 per one way) and that’s it.

          • DAB says:

            Aha… My company has toggled a setting so that individual carriers are on separate tickets. In my circle example, I was thinking US to SF and from LA and UA for the SFO-LAX. However, you could even put that on three airlines with the exact same routing and add an SW leg (maybe with some stops between SAT and PHX).

            So, you can get it to $12.50 by having the middle segment on a separate ticket?

          • CF says:

            Yes, if you’re on a separate ticket, then it will not price as if there are other segments so it will charge the security fee.

        • Austin says:

          I just looked at the CFR (the official rules), and there is indeed a round-trip cap. And since round-trip is defined quite broadly as “a trip on an air travel itinerary that terminates at the origin point,” the fee would indeed be capped at $10 no matter how many stopovers you make on a circle itinerary.

    • Austin says:

      As with everything in the airline industry, the answer to both of your questions is “it depends.”

      For the first example, if the flights were ticketed as you describe with those connections, yes, the total fee would be $10; $5 for the outbound and $5 for the return. However, that itinerary looks suspiciously like a Southwest itinerary, and WN operates many direct flights (a flight that retains its flight number but makes multiple stops). If you are ticketed on a direct flight, you are only charged a single segment fee of $2.50 no matter how many stops are made. Similarly, you would not be charged PFCs for those intermediate airports, just the PFC for your origination airport.

      Regarding your second scenario, it all depends as to whether the SFO stop is treated as a connection (e.g. you booked a simple round-trip ticket SAT-LAX-SAT), or if it is a stopover and was ticketed as a circle routing (SAT-SFO-LAX-SAT). On domestic itineraries, connections typically cannot be longer than four hours; otherwise, it is treated as a stopover. Assuming the latter, which is most likely (unless the only reason the SFO departure is the next day is because it is at 12:30 am), the fee would indeed be $12.50; $5 for the first part of the trip, $2.50 for the second, and $5 for the last part of the trip.

      • DAB says:

        On the EUG example, actually UA/US (mostly UA).

        Connection is another question I had here that is OT to the tax issue. The airline websites seem to be treating the itenerary as though I have a 9 hour connection in SF since it actually is on the same day (flying early, meetings during the day, leaving for LA for the night and meetings the next day). I was mildly curious whether there was a rule on what is a connection and what is a stopover on the same day. I don’t see that it affects me, though, so not curious enough to investigate hard myself…

    • DAB both your examples would be $10.00 which is the max that can be changed on a single ticket. $2.50 per enplanement with a max of $5.00 per one way.

      If you were on a single flight number that made a stop(s) enroute it would be only $2.50 (ex ABC airlines flight #123 LAX-MCI-BOS and you were going LAX-BOS you only enplaned once in LAX so only pay $2.50 for that direction.

  3. Brett fix your 9/11 code, it should be AY not YC which is customs on an international ticket. :-)

    • CF says:

      Doh! That’s what happens when you cut and paste. I’ll double check my international post for Thursday to make sure that’s ok as well.

  4. Sanjeev M says:

    OMG Thank you so much. I really am completely clueless when it comes to fare construction. Thanks for the detailed explanation.

  5. Peter says:

    Slightly off topic, but is that a $95.81 and a $22.32 fuel surcharge(Q) there? Wow…

  6. Peter says:

    Oh, you did point that out in the explication! Never mind… whoops!

  7. Voyager0927 says:

    Is the base fare for the Spirit Airlines example inclusive of the Passenger Usage Fee and the Unintended Consequences of DOT Regulations Fee?

    • CF says:

      Well, I suppose it would have to include that because I can ticket at this total amount. Spirit is sort of a different animal, however. They will have lower fares on their website than in travel agent systems, so you just might not see it broken out the same way but they’re certainly getting their money. That’s why I would never ticket someone on Spirit without going to the website.

    • Jason says:

      As I recently purchased a few tickets on Spirit, here’s the breakdown of all the taxes and fees as shown to the customer. This first one is a domestic one way. There was a fuel surcharge that was roughly 40% of the base fare. It is shown broken out when pricing the itinerary, but shows as part of the taxable fare after purchase:

      Flight $87.30
      Bags $30.00
      Seats $30.00
      Unintended Consequences of DOT Regulations $2.00
      Passenger Usage Fee $16.99
      September 11th Security Fee $2.50
      Passenger Facility Fee $4.50
      Segment Fee $3.80
      US Transportation Tax $6.70

      Total $183.79

      Perhaps more appropriate for Thursday’s post, here is a FLL-NAS round trip I purchased on Spirit with all of the fare, fees, and taxes broken out:

      Flight $2.00
      Seats $24.00
      Passenger Usage Fee (Carrier Fee) $17.98
      US-International Departure Tax $33.40
      September 11th Security Fee $2.50
      Passenger Facility Fee $4.50
      BS Departure Tax $25.00
      BS Airport Facility Fee $21.50
      Bahamas Security Charge $7.00
      BS Passenger Processing Fee $6.00
      APHIS User Fee $5.00
      Immigration User Fee $7.00
      US Customs Fee $5.50

      Total $161.38

  8. JayB says:

    Taking off on your yesterday’s post headline, may I ask: Why is the airline and/or the applicable regulatory agency WASTING my, and most everyone else’s time, breaking out the various components (fare, tax, fees, charges, costs, whatever) of what I have to pay to get myself flown from Podunk to Sheboygan, and back? Nice to know, these components, but really!

    Is it any more important that I know the breakout of the base fare, the US domestic transportation tax, the sexment tax, the security fee, or the PFC, than to know what’s in the price for fuel, maintenance, pilots, aircraft, rents, landing fees, marketing, de-icing, general & admin, or the infamous “other” costs?

    I think not. Of course, if someone in an official position makes the carrier collect a charge, fee, or whatever, whether per passenger or per flight, someone ought to know if that is being collected and passed along to the proper party, but why bother me with a listing on my ticket what each component is?

    No. It’s a waste and I nominate Cranky as my representative to see that this is stopped! (If only I could get him to end all “operated-bys,” code-shares, and change-of-guage flights, but I know, he’s very busy, what with his having to stop and explain international taxes for us littles. Still, I dream on.)

    • Jason H says:

      In many cases the airlines are required by law to break out all these fees. Additionally, even if they were not, why wouldn’t they want to? It let’s them deflect anger at their fares to the government.

    • Tim says:

      When you’re purchasing a TV would you like sales tax rolled up into the advertised price or would you like to know how much it is?

      In many other countries, sales taxes and VATs are rolled up into the price of a product being purchased. Not the case in the US, however.

  9. Should be mentioned that anytime you see a Q charge it doesn’t mean it’s a fuel surcharge, just extra money being collected for a reason that is to be show as part of the base fare.

    Years ago you paid a separate Q charge flying out of any airport in Florida, Boston, and Chicago. Those went away, but it was still extra monies collected which had to be shown as part of the base fare since there were not a tax but went to Florida, Boston, & Chicago.

  10. Jason says:

    I recently purchased a couple of tickets on Spirit. Here is the breakdown as it is shown to the customer. The first one is a domestic one-way. There was fuel surcharge, broken out before the purchase. After purchase it shows part of the taxable airfare as one number:

    Flight $87.30
    Bags $30.00
    Seats $30.00
    Unintended Consequences of DOT Regulations $2.00
    Passenger Usage Fee $16.99
    September 11th Security Fee $2.50
    Passenger Facility Fee $4.50
    Segment Fee $3.80
    US Transportation Tax $6.70

    Total $183.79

    Maybe more appropriate for the Thursday post, but here is a round trip FLL-NAS break-out of fare, fees, and taxes:

    Flight $2.00
    Seats $24.00
    Passenger Usage Fee (Carrier Fee) $17.98
    US-International Departure Tax $33.40
    September 11th Security Fee $2.50
    Passenger Facility Fee $4.50
    BS Departure Tax $25.00
    BS Airport Facility Fee $21.50
    Bahamas Security Charge $7.00
    BS Passenger Processing Fee $6.00
    APHIS User Fee $5.00
    Immigration User Fee $7.00
    US Customs Fee $5.50

    Total $161.38

  11. FedUp says:

    I appreciate your post on this topic but it just gets me irritated with our gov’t. I thought by me paying federal taxes it would cover gov’t agencies like the TSA. If they can’t fund it without the 9/11 fee, then maybe they need to go back to the drawing board and find another way to fund it. Tax upon tax upon tax upon tax = the ticket twice as much.
    I’m looking forward to your Thursday post….although I might have to take some blood pressure medication prior to reading.

    • Oliver says:

      I probably fly more than the average US taxpayer and thus pay more of those pay-per-use fees, but it seems reasonable to cover at least part of the cost of the “service” by charging those who actually use it. Kind of like funding bridges from tolls instead of the general fund. Or passport fees for those who actually want one.

      Of course, those fees should be reasonable and related to the service I consume. An example I hate are those stadium surcharges that local tax authorities add to car rental charges. That’s not covering a service provided to me, the renter, but rather benefits the locals.

    • Fedup the tax is actually called the ‘Passenger Civil Aviation Security Service Fee’ to cover the cost of security at the airport. Interesting that it covers the cost of security implemented as a result of 9/11, but up until this new body scanners came along, it was still the same x-ray machines we had for decades prior to 9/11. Guess they saved up the money to buy those body scanners with the fees collected.

  12. Ed Kelty says:

    I thought I knew something about these fees, but had no idea of the rules for Canada, Hawaii and Alaska. Thanks for the education!

    All these fees make one “almost” identify with the tea party. But, they forget the role of local government with its landing fees and rental car charges to build remote consolidated terminals. What I don’t get is taxation on fuel surcharges since fuel is already taxed.

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