FlyerTalk Forums - View Single Post - Different taxes on same award ticket? [OneWorld]

Oct 26, 2016 | 9:45 pm

#28

seawolf

Original Member

Join Date: May 1998

Location: NYC

Programs: AA 2MM, Bonvoy LTT, Hilton Gold

Posts: 15,011

Quote:

Originally Posted by seawolf

Refer to 26 USC §4261(c)(1). Interesting that even IRS is referring you to Cornell's website for the IRS code.

According to US-based airlines, $0 fare is not considered "any amount paid." No Departure/Arrival Tax. If YQ is charged, this gets triggered.

Up until two years ago, CX awards (JFK-HKG-JFK) when redeemed with AA is $0 fare. No US Departure/Arrival Tax. All this time the HKG Security Surcharge was being absorbed for CX.

At some point since then, CX decided to pass on the Security Surcharge to award passenger triggering a YQ of $6. AA started tacking on US Arrival Tax for HKG-USA oneway and both US Departure/Arrival Tax for US-HKG roundtrips.

My post above is probably not correct and is an oversimplification of the topic.

The IRS memo seem to suggest whether the international facilities charge (departure/arrival tax) applies in §4261(c) is dependent on whether the award miles are taxable under §4261(a). Under certain circumstances, they may or may not be taxable.

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