drewguy

No. Price discounts aren't taxable, any more than a passenger paying for deep discount economy has to pay taxes on the difference between that price and full-fare Y.

as219

Or maybe it's because they emptied their accounts the week before on SQ F awards...

camachinist

If 268 was Pyridoxine's flight, then 1475 still has seats and is a possible, though hoofing it from 90 to Intl in fifteen minutes, presuming the slight delay holds, might be problematical. However, once in SFO, greater opportunities for endorsement of his ticket exist or, if no joy, easier access to a fun city if overnighting.

84fiero

Good thing there isn't an internet frequent flyer community with a whole forum dedicated to sharing and alerting members about pricing errors, unusually low fares, and other techniques - or else the airlines would really be hosed.

Oh, wait.

5DMarkIIguy

No, I didn't miss that. And it wasn't my point. The point was his analogy was bad all around.

Btw, how do you know most of the 4-mile flyers haven't earned significant miles on UA? I personally know someone who wiped out 300k+ for the SQ redemption. I also know someone who got the correct amount of miles deducted.

rankourabu

Or maybe they were smart enough to use accounts without sufficient balances since those with enough were deducting at normal rates

I m sure everyones uncle/cousin/dog has a small balance account somewhere

zombietooth

Well, I agree with you, there are exceptions, but I don't buy that someone with a low post count spent all of their miles on SQ awards. I do believe that bunches of newbies got in on this and they are the ones that benefitted most because they were the most likely to not have enough miles for UA to deduct the correct amount for the award.

I used about 700K on the SQ awards but still had way too many points left to take advantage of this deal.

Wrong, it's clearly not a discount or a sale. Everybody agrees that it was a mistake. Thus, if UA honors these tickets, they will be agreeing to accept much less than their published redemption level for the award. The difference between the published value and what you were charged could easily be considered income.

Read this:

http://findarticles.com/p/articles/m...0/ai_21183386/

This TAM (9547001) is still in effect, it has never been rescinded. There has only been a lack of enforcement.

Eryeal

Show me one individual that actually pays Use tax, and then we'll talk.

For the uneducated: You are supposed to report and pay Use tax on any item you buy outside of your own state (assuming your state has Sales Tax). No one does this, and it's virtually unenforceable.

P.S. The article you linked to is only talking about business taxes in terms of businesses allowing private individuals to benefit from miles earned from business transactions. Completely irrelevant to non-business transactions.

Thunderroad

I don't think we'll ever know the answer to this, but my guess is that many of the folks who jumped on this deal were experienced flyers who've done a lot of traveling. Almost by definition, the blog-followers and FTers who became aware of this deal tend to be more miles-oriented (and miles-accruing) than the the average flyer. By extension, I'd expect that many of them have had lots of miles in their accounts at one point or another though possibly not as of Sunday. I didn't grab the offer, but if I had I would have qualified for the 4-pointer by virtue of burning through nearly a million miles earlier in the year. Between a general drift toward redeeming rather than accruing UA miles and the SQ deal, I'd think that I'm not alone in this regard.

Again, though, I'm just one data point and my guess is only that.

zombietooth

Well, you found him.
I pay use tax every month. It is no longer unenforceable for anything you are buying on ebay. It won't be long before all of the online resellers are sending the data on what you purchased to every state with a sales tax.

Eryeal

I don't believe you! LOL

Unless the reason you are doing it has some relation to business purposes.

So when you go on vacation somewhere - you actually save all your receipts of everything you buy (and bring back), and file a Use Tax form?

Also completely unrelated to this thread - but I heavily disagree with you on the last part. I think the lobbying from online retailers is too heavy, even when you consider the lobbying from the heavy hitter B&M stores. The other side is that no lawmakers would enact something like this with a down economy - the economy would have to boom before something like this would have a serious chance to pass.

FearFree

I personally think it IS great. I have no vested interest in the outcome of this ordeal, but am certainly curious to the end result. Trying to weed through 98 pages of posts, most of which are speculation/moral arguments/armchair lawyer (no offense to any real lawyers) to find any hints of real information is tedious and largely unproductive. A thread to contain just the hard proven facts would be greatly welcomed.

The alternative would be to have the first post on this thread be updated with current known facts as they arise.

zombietooth

If you pay sales tax in the territory/state where you purchased your items, then you don't have to pay use tax unless the rate you paid is less than the rate in your home state.

It is because I buy so much on ebay and they report 100% of purchases to my state, although I was paying use tax before.

Also, you missed my point with regards to the TAM. If miles are held to have value, then any distribution of miles could be taxable income. Note that I didn't say it would be taxable, but only that UA, in a vindictive action, could send 1099s out for the difference between the published award level and what they actually charged you and use the purchase miles amount as the value per mile.

It's analogous to a short sale on a house: After Dec 31, 2012, if a bank agrees to forgive the difference between the final sale price and the amount owed on the loan, the IRS will hold that to be taxable income, and the bank will send you a 1099 for that amount. This is one of the negative effects of failing to extend the "Bush tax cuts": people are going to start owing income taxes on a house they sold for a loss. This will likely have devastating effects on the housing recovery.

drewguy

+1. that's an issue of fringe benefits.

Bargain purchases have long been considered not to be income, except sometimes if the bargain price is because of an employment relationship and it's a fringe benefit. IRS Publication 17 sheds light on this.

One can call this a mistake or anything else, but fundamentally people are getting (or may get) these tickets for less than the full price. Whether that discount is intentional or unintentional (think of the garage sale "find" of some rare painting) doesn't change the taxability.

accordiantamer

Let's not forget a big reason why UA might further be ticked about this particular issue:

EWR-HKG is their longest nonstop route. Plus, CX is bringing in their guns into JFK. Given that, you can imagine the cost of fuel vs. load and comptetion. Cheap seats=greater load. Cheap F seats=less profit.

Computer glitch reflecting blowout sale=huge loss in profit/market.