Thanksgiving Travel Can Be Taxing
If you think tax time doesn’t begin until after January 1, think again. The holidays bring hefty taxes for many. If you are traveling this Thanksgiving, you’ll find yourself hit with a myriad of taxes. According to a study by the National Business Travel Association, travelers pay up to $101 in sales, hotel, rental car and other extra taxes on an average three-day trip.
If you travel by air, you’ll pay even more, thanks to a variety of air transportation taxes. There’s a 7.5% tax on the base ticket price, a domestic segment tax of $3.70 per person per segment (a single takeoff and single landing), an international travel facilities tax of $16.30 per person for flights that begin or end in the U.S.and $8.20 per person for a flight that begins or ends in Alaska or Hawaii. If you are shipping anything, be sure to tack on 6.25% for a tax on transporting property by air.
Your destination airport can tack on taxes as well. If you are going to New York via JFK airport, you’ll pay much more in taxes than those traveling to Washington DC. Taxes at JFK average over $36, compared to less than $20 at Washington’s Reagan National airport.
You won’t escape taxes by driving – quite the opposite, I’m afraid. In 2011 motor gasoline taxes averaged 48.1 cents per gallon, including a federal tax of 18.4 cents per gallon. As if that weren’t enough, there are a few states and municipalities that charge sales tax on top of the excise taxes.
You’ll pay the most if you fill up in California(67.7 cents) and the least in Alaska(26.4 cents), though that’s quite a distance to travel for a tank of gas for most Americans. Another low tax state includes New Jersey at 33 cents or less. Fill up in New York or Hawaii and expect to pay about 68 cents a gallon in taxes.
Taxes for other travel expenses also vary from city to city. If you are spending a couple of nights in Chicago, expect to pay a whopping $101 in taxes for hotel, rental car and meals. Want to cut that amount in half? Spend the weekend in Portland for just $52 in taxes, or for just a few dollars more in taxes visit Fort Lauderdale, Honolulu and Detroit.
Taxes will continue to increase, I’m afraid. More cities, counties and states are looking to raise taxes on hotel rooms as they battle budget shortfalls and cuts in services. Traditional low-tax destinations such as Baltimore, Scottsdale (AZ), Santa Clara (CA) and Connecticut have increased taxes recently or are considering it.