Travelers Confront New Airline Tax

Travelers heading out of the country have already started to feel the pinch of new ticket taxes going into effect Wednesday, but now domestic travelers have also been hit with an increase.

Under a new law passed by Congress in August, airline ticket taxes were restructured as of Oct. 1. A 10 percent excise tax on most domestic tickets dropped to 9 percent, and an additional $1 fee is being charged per flight segment.

For instance, a person flying from Dallas to New York on a ticket that costs $685.32 would pay $61.68 in excise tax and $1 in a segment fee.

While that might have meant a slight savings under the law itself - a 1 percent fee on a $685.32 one-way ticket, for instance, would be $6.85 compared with a $1 segment fee, the major airlines started collecting that 1 percent as a fare increase beginning Friday.

“This keeps the traveling public from receiving any tax break and the airlines get another windfall,” said Tom Parsons, editor of Best Fares magazine.

Joe Hopkins, a United spokesman, said that while consumers are never pleased when costs rise, “there are still a lot of good bargains out there.”

And since taxes are never simple, there are exceptions to the new law. Travelers heading to rural airports are exempt from the new segment fee. Their tickets will be taxed at 7.5 percent. And travel between Alaska and the U.S. mainland or between Hawaii and the continental United States will be taxed at $6 in each direction, plus the 9 percent tax.