entropy

could be a compliance "adjustment" and something they agreed to do as part of a settlement with some authority.

sexykitten7

Handing out free money would be one heck of a problem!

sexykitten7

Is this the right thread? Anyways, couldn't find the one where we were discussing this. Please merge if you can...

I discovered why people were getting their taxes back! It's now explained in the TravelBank FAQs. Paying with TB funds deceases one's tax liability.

jsloan

The FAQs suggest that the excess taxes will be refunded within 60 days of travel, which might explain why not everyone has gotten a refund -- I'm betting I won't get one because I haven't used any TravelBank funds in the last 60 days.

They might also explain why you haven't been able to deposit money into the TravelBank recently -- they're apparently planning to collect the 7.5% excise tax on deposits. I don't know if they were doing that before, but that eliminates the loophole that everybody presumably saw simultaneously of topping up the TravelBank prior to every purchase to get all taxes refunded.

I'm curious, though. It seems to me that any logic that suggests that United.com Club credit should reduce the tax basis of the fare would apply equally well to ETCs, especially if those ETCs are given as customer service compensation of some sort for a paid flight.

cfischer

that's nice. Sounds like it will stick.

aacharya

For sure they were smart to add the tax for new purchases. Else that's a perfect savings for flights, and still a good way to manufacture spend.

sexykitten7

I (dis)agree with you. Specifically, I can't understand why they are treating UCCs as post tax funds. UCCs and ETCs ought to be considered pre tax forms of payment. Of course, I'm not complaining either!

The whole DOT tax issue is quite complicated (for example, bank points may or may not be taxed upon conversion to miles for dom/intl use). I should think the old way was easier (tax upon spending, not funding) but perhaps the IRS objected.

jsloan

Well, the reasoning is that the law omits taxes from discounted airfare, such as award flights. So, if you think of United.com Club credit as a discount toward airfare, akin to award tickets, it makes some sense. And if you then consider an ETC to be an airfare discount, the same logic would apply.

I'd argue they behave the same way and so should be taxed the same way. After all, if United is giving you $200 toward a future flight, aren't they really offering you a $200 discount? And, if the taxes are supposed to be based upon the revenue that they collect, and they're not collecting the revenue from the ETC (because it's really just a discount voucher), it seems that ETCs should reduce the taxable basis of the airfare. (Whether or not this is a sensible way to write the tax law is another question).

sexykitten7

Interesting! I always assumed, for example, that UA paid the PFCs on award tickets but you're saying they're not paid at all? I understand the DOT tax omission (7.5% of 0 is 0) but can't imagine airports are happy to host free customers.

I agree UCCs and ETCs are virtually identical and ought to be considered the same, either as FOPs or discounts.

jsloan

Correct. The PFC is not allowed to be collected on free tickets -- Title 49, Section 40117(e)2(C)

jackexu

I completed a one-way trip, on Feb 17, that purchased by Travelbank credit (partly). Now I received an email from United Refund saying (without reference number)
Did anyone get a similary email?

emcampbe

Yes - not me, but several reports in an existing thread, though I believe it got merged into the main TravelBank thread.

For me, I’ve used partial TravelBank credit to pay for multiple itineraries going back to 2012 - from both fairly small to fairly large amounts, and not received this.

emcampbe

I just got an email now about this as well. This was for a trip that was completed last weekend of Feb, and was booked in late Jan. Haven't seen the refund actualy post back to card just yet, but the email says $5 (x 3 travellers). This trip was partially paid by travelbank, not fully. Not sure where the amount comes from - looked at the 3 taxes above, and divided by the proportion paid for by TB, but that doesn't match. Whatever it is, not upset about $15 coming back.