Airport Tax
Categories: Tax, Regulations
You decide to go on a trip. You spend hours searching all the travel sites, even the weird ones that seem like they put your computer at risk. You finally find what looks like a great deal...$99 round trip from Los Angeles to Kuala Lumpur on Sputter Airlines. You run your credit card and you get your final receipt. For some reason, the ticket now costs $159. Ahhhh! At that price, you might as well swim!
Airport taxes are a big reason for the surprise jump from list prices for flights to the final amount that shows up on your credit card receipt. Basically, the government taxes passengers for using the airport.
It's not the only add-on to the ticket price. There are other taxes, and the airline might throw on a fee or two as well. But airport taxes are among the biggest flight-related fees that come up when booking a seat on an airplane.
Related or Semi-related Video
Finance: What is an Airport Revenue Bond...8 Views
finance a la shmoop what is an airport revenue bond, well it's just uh [A muni bond on the table]
muni bond people don't get all uptight let's go through security here alright
well there are many flavors of muni bonds and airport is a popular one all [Different flavors of muni bonds]
right you know what a muni bond is generally safe, backed by the local
government but you know sometimes people get nervous about them because well
frankly a lot of municipalities are going bankrupt particularly California
Stockton, San Bernardino even Orange counties in trouble so investors like
the safety of muni bonds with revenue attached and hence we have the airport [Airplane takes off from airport]
muni bond backed by revenues from the airport and the you know clever name
Well in this country a whole lot of airports were
initially built by the military so those were federal dollars put to work but
once the runway was in and there was access for parts and fuel while the
military generally lost interest oh and the effect that wars went away kinda [Tanks waiting]
helped so they didn't really need the fancy bathrooms with the
mother-of-pearl tile and sink knobs you know military people well they can use a [Military man peeing in the bushes]
tree or a bush most of the time they're tough so lots and lots of upgrades have
been needed for airports over the last decades especially with the advent and
popularity of private aviation...Airports issue muni bonds backed by their ability
to collect things like landing fees overnight motel airplane parking fees
premiums placed on jet fuel and a bunch of other revenue sources that small
airports lean on to pay for the upgrades they've installed. Sometimes the city [People walking through airport terminal]
issues the bond and the city owns the airport and at other times it's just the
airport itself but done as a muni bond so that the airport gets a really low
interest rates from the locals so yeah that's an airport revenue bond and it's [Man holding airport revenue bond on a plane]
a you know muni in the bank...