International governments have the authority to impose taxes on the tickets of passengers who fly into their airports and visit their countries. Taxation of airfares is not restricted to international travel, but the fees and surcharges imposed on domestic flights seem insignificant compared to the hefty charges paid by those who fly overseas.
Flights within the United States are subject to four basic taxes: a passenger ticket tax and flight segment tax, which help fund the Federal Aviation Administration; a passenger facility tax, which goes to airports; and a federal security fee, which goes to the Transportation Security Administration. The passenger ticket tax is charged as a percentage of the base ticket fare, while the other three taxes are charged as a flat fee by flight or flight segment.
Like taxes on domestic travel, international flight surcharges fund government entities, airports and projects, including air traffic control, airport security, customs inspection, fuel and insurance coverage. These taxes are imposed by foreign governments and airports and can be substantial. "USA Today" reported in January 2012 that an $81 round-trip flight from Boston to London incurred an additional $609 in taxes and fees; a trip from Boston to New York, meanwhile, incurred taxes of a mere $21 on a $112 fare.
Foreign Government Taxes
Taxes imposed by foreign governments sometimes have little association with air travel. The "New York Times" reported in 2010 that France had a "solidarity tax" intended to fund drugs for disease eradication in developing countries. Britain had an air passenger duty, billed as an environmental tax. The United States charged passengers entering America from certain countries a $10 fee intended to promote American tourism. The "Times" also noted that these fees often end up in the general revenue fund of the countries that impose them.
In June 2012, a U.S. Appeals Court upheld new regulations that require airlines to advertise the full cost of airfares when promoting flights to the public. This includes both the base fare of the ticket and all applicable taxes and surcharges. Taxes may be listed separately but must not be listed prominently, leading the dissenting judge to state that the regulations forced companies to bury the taxes in the fine print. Consumer groups, however, applauded the requirement that the full cost of air travel be spell out.
Catherine Lovering has written about business, tax, careers and pets since 2006. Lovering holds a B.A. (political science), LL.B. (law) and LL.L. (civil law).