Part 2: How Are Domestic Aircraft Charter Rates Taxed?
In our previous blog article, we reviewed the Federal Excise Tax’s effect on aircraft charter rates. The FET is the only tax that is levied as a percentage (7.5%) of flight costs. However, if you are planning a domestic charter flight, three other taxes may affect your rates.
**Please note the information below is a general overview of air travel taxation and is not an official examination of IRS rules. (You can find the complete IRS regulations here. Chapter 4 is relevant to Air Transportation Taxes.)
Four taxes can be applied to domestic and international aircraft charter rates:
- Federal Excise Tax (FET)
- Domestic Segment Tax
- International Head Tax
- and a special Alaska & Hawaii Head tax
This blog will look at the three head taxes you may encounter.
Domestic Segment Tax
Segment taxes are charged per passenger per domestic leg of the flight. The rate is currently $4.30 per passenger and is scheduled to increase regularly to keep up with inflation. One exception to the Domestic Segment tax that might affect your aircraft charter rates is Rural Airport Exemption. If part of your flight is to or from a rural airport, the domestic fee is not applied to that segment. Rural airports are more than 75 miles from a large airport and have less than 100,000 passengers departing annually.
International Head Tax
International flights departing from or arriving in the USA do not pay the Federal Excise Tax but are charged a head tax. Currently, the fee is $19.10 per passenger, including flights to US Possessions such as Puerto Rico and the US Virgin Islands. However, flights from a US Possession to an international destination are not charged the fee.
Alaska and Hawaii Head Tax
Due to their unique geographic positions, Alaska and Hawaii have slightly different head tax. Flights departing from either state are taxed $9.60 per passenger. Fortunately, this head tax applies only to departures.
You can find more information about current taxes and fees in The National Business Aviation Association’s guide for business travelers.
“I shall never use profanity except in discussing house rent and taxes.”
Humorist Mark Twain once wrote, “I shall never use profanity except in discussing house rent and taxes.” For Stratos Jet Charter travelers, taxes are a mixed blessing. No one likes paying a fee as part of the aircraft charter rates, but well-maintained airports and advanced air traffic control systems are crucial to air travel safety.
To book a safe, luxurious private jet flight to anywhere in the world, call Stratos Jets—888-593-9066.
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