04 February 2011

Airline Dodge the First Bullet

WAY Baaaaaak when the debate over Ancillary Services started. I made a noise about the issue of Ancillaries actually costing the Government money.

It seems that at least someone was listening to the old Professor.

However it seems that the IRS ruled first that these services are not part of the ticket which set the scene for a government money grab. Well the airlines have dodged the first bullet.

Sen. Max Baucus one of the senators from the Great State of Montana says FAA bill won't include bag-fee tax. The Government Accountability Office said that a tax on baggage fees charged by airlines could raise roughly $240 million each year for the Airport and Airway Trust Fund. The Senator is chairman of the Senate Finance Committee, he said that he will not propose such a tax as part of a bill reauthorizing the Federal Aviation Administration.

Dont expect this situation to last that long. I am sure that there are many States who are looking at this from a revenue perspective. With the DoT now in the process of finding ways to monitor the ancillaries - we can be assured that as soon as they figure this out - they will indeed then work out a way to tax it.


With thanks to ChukyPita for the great image

The sure things in life are death and taxes.

No comments: