By Bob Porterfield, Associated Press Writer
SAN FRANCISCO Air travel is taxing in more ways than passengers imagine. Besides the long security lines, overbooked flights and lost baggage, passengers are paying a laundry list of taxes and charges often invisible even to the most seasoned traveler.
The nation's air transit system is financed primarily through federal excise taxes and other special charges that have collectively generated $117 billion since 1997 — mostly from the pockets of airline passengers. A smaller portion comes from airlines and freight carriers in the form of fuel and cargo taxes, and these costs also are frequently passed along to customers.
The taxes and fees currently attached to each ticket purchase, as compiled by The Associated Press:
A 7.5% federal levy is attached to every plane ticket. These are collected by the airlines and passed along to the Internal Revenue Service, which deposits them in the Airport and Airway Trust Fund. A separate Rural Airport Tax of 7.5% is assessed on flights that begin or end at rural airports, but those passengers then are exempt from the other ticket tax and the segment tax. Passengers traveling between the continental United States and Alaska or Hawaii pay an additional $7.50 in taxes. Over the past decade, $49.6 billion has been collected in ticket taxes.
The Passenger Flight Segment Tax, currently $3.40, is charged each time a passenger takes off and lands. Passengers on a non-stop, roundtrip from Los Angeles to New York would pay $6.80, for example, while passengers flying roundtrip from Los Angeles to New York via Phoenix and Kansas City would pay $20.40. The IRS says there's no limit to the number of segments taxed, although it's not collected in cases in which flights are diverted. Since 1997, passengers have paid $14.4 billion in segment taxes, with more than half that collected since 2003. The increased collections are largely attributed to the growth of low-cost carriers that make
intermediate stops en route to a passenger's ultimate destination.
International arrival and departure tax
The current tax is $15.10 per passenger on all flights departing for or arriving from foreign destinations. The fee is tied to the consumer price index and has risen 12.7% over the past five years. Since 1997, the tax has raised $12.7 billion.
Created by Congress after the 2001 terrorist attacks, these fees cost customers $2.50 per boarding, with a $5 maximum per one-way trip, even with multiple segments. The money — $7.6 billion since collections began in 2002 — is paid directly to the Transportation Security Administration. How the TSA spends the money is something of a mystery. Almost from the day it was established, the agency has been criticized for poor financial management; last November, an independent audit by KPMG harshly criticized the agency for failing to comply with basic accounting practices. In 2005, the TSA was forced to restate its finances due to an "error in accounting for passenger and air carrier aviation security fees."
Passenger facility charge
A local tax collected by airlines and paid directly to the airport where it's levied. Since 1997, this has generated $18.4 billion, largely used for airport construction and other improvements. Another $35 billion still is due on projects already approved by the FAA. The FAA tells each airport how much it can charge — from $3 to $4.50 for each leg of a trip, to a maximum of $18 on a single ticket sale. Nationwide, 365 airports currently charge PFCs, including most of the nation's commercial hubs. This fee could be raised to $6 or more under a new funding proposal. The National Association of State Aviation Officials would like to see it raised to $7.50 to produce additional money for airport improvements and free up money for smaller airports; airlines oppose an increase and say more should be spent on air operations rather than terminal improvements.
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