Summer Vacation Tax Savings
Jun 12, 2014
As many students anxiously await the end of the school year, attention is quickly turning towards the fun-filled vacations many have been planning for months. This planning has no doubt accounted for the costs of things like hotel rooms, food, and entertainment, but one cost most have likely not thought of is the cost of travel related taxes. According to a study by the National Business Travel Association, on a three day trip, vacationers spend about $100 on hotel, travel, and other extra taxes. Two of the most common travel related taxes vacationers will face are gasoline taxes and airline taxes.
While the federal gas tax of 18.4 cents per gallon is the same throughout the country, state and local governments have implemented their own taxes, so the amount you pay in gas tax can vary greatly from state to state. For example, motorists here in Ohio pay 46.4 cents per gallon, compared to 60.2 cents per gallon in nearby Pennsylvania. ExxonMobil has created a mapshowing the amount each state charges for gasoline taxes. You can utilize this map in the finishing stages of your vacation planning to determine which states to fill up in to help you save the most.
The second tax, airline taxes, can also add up rather quickly. For instance, on a given flight you have to pay a 7.5% tax on the base ticket price and a domestic segment tax of $4.00 per person, which is paid each time you land and take off. There are a number of additional airline taxes as well. For example, international flights either beginning in or ending in the U.S. result in an additional tax of $17.50 per person, and for flights that either begin in or end in Hawaii or Alaska, an additional tax of $8.70 per person is assessed. Since most of these taxes are paid each time you land and take off, you can try to book non-stop flights to save on the amount of taxes you have to pay. However, you will want to keep in mind that in some cases booking non-stop flights can end up being overall more expensive than trips with multiple flights.
While these travel taxes may be unavoidable, there are a number of steps you can take to help minimize the total amount you end up paying, which can help keep a little extra money in your pocket.
By: Ruben Becerra, Staff Accountant