Originally posted by rmccamy:
Also keep in mind that Congress is right now proposing a five-cent tax on each email sent from the US. In most versions of this legislation, bulletin board posts will be legally considered emails. I know this is true, because one of my cousin's friends knows somebody who has a roommate who works on Capitol Hill.
He also said that the email tax will probably pass right through Congress along with the Frequent Flyer Income Tax that is also in its final stages of revision. Since 120000 miles = a $12000 int'l FC ticket, Congress is setting the value at a dime per mile.
No wonder why they are still selling beachfront property in Arizona and Nevada! I still have my five acres in Pahrump, waiting for California to slide off into the ocean.
But seriously, FF miles accrued or redeemed as a direct result of the puchase from the entity providing the service are not taxable as they are a portion of the purchase contract,therefore included in the purchase price. However, any benefit derived by a third-party transaction, (i.e. Capital One or other type of mileage program separate from that of the vendor, or one for which no consideration was offered read 'price was paid' such as Greenpoints, Milespree, etal.) is taxable at the time a service is provided (read 'ticket is issued') as no direct relationship between the purchaser and service provider exists. The service is being purchased by the third-party provider and not the person receiving the benefit.
I am not going to pull out my Financial Accounting Standards Bulletins, but this has been covered in a FASB Statement within the past couple of years.