Come on now. This is one of those Urban Folklore things flying around. If you believe this one, you would love the one about forwarding and email to 1000 people and Bill Gates will send you $10,000, or free gift certificates from the GAP. Don't be so gullible.

This is going to happen. A friend of my roomates brother-in-law lives next door to a guy that works just down the street from the Capitol.

They are going to tax FF Miles and all kinds of other rebates. When you go to Kroger and get a 2 for 1 on Potatoe Chips, the second bag will be defined as a freebie, which you then have declare it on your 1040 form as income.

(send this to 100 friends and Bob Dole will send you a dozen Viagra Pills -taxable of course)

How many degrees of separation is that??!!

My Proposal if Congress should attempt to tax FF miles:

When in the course of human events, it becomes necessary for one People to dissolve the Political bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature's God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.

WE hold these Truths to be self-evident, that all Flyer Talkers are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Elite Statuses.

I have a dream that one day all Flyer Talkers will receive upgrades without begging, that the children of Elite Status members and the children of Airline & Hotel CEOs will hold hands....

O.K., I have no idea where I'm going with this - I may have lost my mind today. Maybe I'm going crazy, maybe I need to do a mileage run or something.

See what the talk of taxes does to me!!



------------------
Ken in Sacramento

Ken: Pleased to see you submitting facts to a Candid World.

Give me your tired, your hungry, your poor;
The wretched refuse of your teeming gate areas;

Then again, congress has been notorious for passing all kinds of legislation then exempt themselves from it (Gee, it was earned on government business...) http://www.flyertalk.com/forum/mad.gif

RAD

If anyone still believes in the $.05/email tax, see http://www.snopes2.com/inboxer/pending/email.htm
(this is the Urban Legend reference site - usually, when my mother sends me an email, the response includes a URL from this site http://www.flyertalk.com/forum/smile.gif )

The funniest place this legend came up was in the Lazio-Clinton NY Senate debate! The moderator asked about it! You gotta love the Internet.

Just a couple of comments.

1) Canada does not tax miles for flights which are tax deductible. This is nonsense.

2) One FT'er mentioned that the cost must outweigh the benefit. Absolutely. There are 100 variables which go into the equation. Think of the Int'l flyer, who earns this 'revenue' in a place other than the USA. There might be a better fit for thirty odd countires which the US has tax treaty agreements with, but what about the rest of the world.

There was a gentlemean from PIT who connected in Toronto on a flight to Edmonton last Wednesday with me. This gentleman would have to file Canadian tax forms, plus a special form outlining himself as a US resident with CDN earned revenue, so that the CDN goverment could pass this info to the IRS for consolidation with his US tax return. God forbid he travel any where other than Canada throughout the rest of the year.

How many million Int'l travellers are there with permanent residence in the US? Just one of 100 detremintal financial adjustments in this analysis

3) As a marketer,my team would develop a different program for loyalty and key customer retention which is non-taxable.

Another resource to go with usoftie's link:

http://www.stiller.com/hoaxes.htm


It debunks those e-mail "warnings", chain letters, etc., More importantly, it tells which ones are NOT hoaxes.

You're my new hero. LOL. http://www.flyertalk.com/forum/smile.gif

If the IRS were to tax this, then taxation of manufacturer coupons would not be far behind. The IRS should leave it alone, and I do not see it happening for a good while, if at all. Just my two cents worth, and hope that they don't tax it either!

In Washington State, Coupons are allready taxed. When you use a coupon on an item, the sales tax is computed on the original price, not the price after the coupon is redeemed.

One other example:

You buy a new car in Washington State and get taxed roughly 8% sales tax. When you sell the car to someone else, that person will again pay 8% sales tax on the transaction. This sounds like double taxation to me since the original amount of the car price was allready taxed when the original owner bought it.

Taxation of Frequent Flyer miles was brought into law in Sweden a few years ago.

If you earn FF miles from a trip that your employer paid for, any benefit you take from those miles is taxable as a fringe benefit. That is the law in Sweden.

Fortunately or unfortunately, depending on your point of view, the law is virtually impossible to enforce.

The coupon is not taxed, but the goods are. You just happen to use the coupon as (partial) method of payment. The coupon is an alternative to cash, check,charge, etc.

You will not see a line item on your receipt with tax against the coupon, only against the goods purchased.



[This message has been edited by NoStressHere (edited 05-06-2001).]

No Stress Here:

If the coupon is issued by the store where you are buying the product, your sales tax is computed on the net price. Otherwise you pay sales tax on the pre coupon price!

When I use a coupon (ET) to bring down the price of a ticket, the federal tax is reduced to reflect the lower cost of the ticket. If the Federal Government adopted Washington States Sales tax apporach, everyone would pay tax on the full amount.

I allready pay Federal Income taxes that I would hope goes to pay for the general cost of operating government. This should include the cost of consular services abroad, Passports, customs and other sevices. As it stands now, I have to pay for these things each and every time I use them.

The tax code is not about fairness or true value, it is about getting revenue from the least path or resistance.

Lets hope they never tax FF miles but to think this will never happen is not being a realist.