Membership Rewards vs Ultimate Rewards
May 19, 2013, 5:46 pm
#1
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Membership Rewards vs Ultimate Rewards
Can anyone tell me why American Express charges a .0006 "Federal Excise" tax on transfers of points into a US airlines milage account? However, if you transfer Ultimate Rewards points into a US airline the Federal tax is not collected.
May 19, 2013, 6:03 pm
#2
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Rest assured that the federal tax is collected by the federal government from the credit-card issuer in both cases. Amex chooses to offset that cost by charging a fee (equal to the tax) to the cardholder; Chase does not.
Rest assured that the federal tax is collected by the federal government from the credit-card issuer in both cases. Amex chooses to offset that cost by charging a fee (equal to the tax) to the cardholder; Chase does not.
May 19, 2013, 6:52 pm
#3
Join Date: Feb 2013
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About that - I have transferred MR points to BA, agreed to the fee and never seen it charged. It doesn't amount to much but I'm curious as to why I wasn't charged, or if this is common.
May 19, 2013, 7:01 pm
#4
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The federal excise tax only applies to transfers to U.S. carriers; transfers to foreign carriers -- like BA -- are exempt from the tax, so there was nothing for Amex to recoup.
The federal excise tax only applies to transfers to U.S. carriers; transfers to foreign carriers -- like BA -- are exempt from the tax, so there was nothing for Amex to recoup.
May 19, 2013, 9:04 pm
#5
Join Date: Feb 2013
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Thanks, that makes some sense. AMEX does warn you that there will be a charge for BA transfers, but I guess that's just standard wording.