Tax on Miles
 

I wasn't really paying attention to this, but has anyone noticed that some car rental companies slip in a tax on mileage? I just looked at my itemized invoice from National when I was doing expenses for my last trip, and I saw this item labeled FFTXRSU.

The explanation of this item was "FFTXRSU is a recoupment of tax on Frequent Flier miles earned."

Okay, so it's only $0.26 and I'm not paying for it anyway, my company is. But sheesh, talk about nickel and diming you. Or, in this case, quartering you.

This has been going on for a while. I know Avis taxes FF miles and MCI taxes the miles earned from long distance calls.

These are taxes that they are passing on to you becuase they are now required to pay taxes (as a third party) on any miles bought from the airlines.

If you think this is a rip-off, you should look at the $1-$3 car license fee they charge renters!!!

This is just a cost of providing the points and should be part of the quoted daily charge but, as we've seen so many times in the USA (can you say "energy surcharge"?), companies love quoting a low rate and then adding anything they can think of on to the bill later.

I've noticed that this particular tax doesn't seem to apply to overseas FF schemes, which is nice. (Gee, do I want to earn 250 miles on a U.S. airline and pay tax on it, or 700 miles on Qantas with no tax? I wonder!)

It's on my sprint bill also, it says Frequent Flier excise fee or something like that and its usually around $1. Kinda pricey for the few miles I get from them.

Sprint (and most companies) charge a excise tax of about $1 per 1,000 miles awarded. So if you get only 1K in miles, it's $1, but if you are like us and get 5K in some months that's over $5 in taxes.

Tax on Miles

Bad, bad, bad, bad words. http://www.flyertalk.com/forum/frown.gif

If this is a tax charged on the amount the airline charges the partner can we take this and calculate backwards what the partners pay the airlines for the miles?

For example if Hertz charges me $0.70 cents for this transaction can we assume that this is 8% sales tax on something purchased from United and therefore Hetz paid $8.75 to United? Or something similar to that.

From that we could then work out that the 700 miles I get with United for this transaction values the miles to the airlines at $0.0125?

Ok, so some of the numbers are random here, I don't have my recipt here for that rental and I can't remember the actual charge for the mile tax, but is the theory valid?

I stopped renting from National after a couple times I believed they were charging taxes inappropriately on free rentals.

Is such a sad commentary on how the travel experience has changed. Remember when we once got 500 miles, minimum, for even a one day rental, without any tax? Two weekends ago my bill with AVIS for a three day rental at AUS ($51 for the actual three day weekend rental) tacked on almost 50% for taxes and surcharges. Is anyone else about ready to write their Congressman about this?

Well, writing to your Congressman won't do any good because if you look at the breakdown, they're all pretty much state and local taxes.

And if you're renting a car in a place where you don't live, you're SOL. No local rep is going to pass up the chance to balance his budget on the backs of people who don't live there!

Alamo zapped me on this recently, on a triple miles CO rental coupon deal - those points I did not really need or want, but I paid for em! http://www.flyertalk.com/forum/frown.gif

That depends on your purpose. I assume Congress could make it mandatory for rental companies to quote the full daily rate in all advertising and all quotes. That would make it much easier to compare rates and stop the misleading practice of adding on all manner of taxes and charges later.

Indeed, a decent blanket consumer protection law that prevented misleading advertising in any industry and prevented charging any amount that wasn't fully disclosed in advance would do it.

One trick previously mentioned to avoid the FF mile excise tax is to not give ANY FF miles at rental time, but instead to submit the receipts after the trip for FF mileage credit, as at that time there is no way to charge you for the miles.
The downside to this is the extra time and expense (fax call, etc) for submission.

Jeff

That FF tax actually came in very handy one time. Hertz tried to tell me that my bonus miles for a rental didn't show up because the particular rental location in question did not participate in giving miles. I politely pointed out that they had charged a tax on the miles on my receipt, and asked them to either refund the tax or give me the miles. The miles then "miraculously" showed up. http://www.flyertalk.com/forum/smile.gif