Time To Pay Up
Frequent-flier miles will cost you . . .
Uncle Sam wants your miles: A federal excise tax on
frequent-flier points may soon take a nibble out of your
hard-earned travel bonus--if it hasn't already.
The tax on miles, passed in 1997, had been absorbed by many
travel suppliers for its card members. Effective last fall,
however, Sprint changed that policy. "This was a business
decision," explains Sprint's corporate communications
manager Elaina Boudreau. "We had to pass this cost we were
incurring along to our customers."
Now MCI and many car rental companies have done the same thing.
According to Sprint, its long-distance customers are charges $1 for
every 1,000 frequent-flier miles they earn; the charge is based on
the total number of miles awarded each month. For example, a
customer who earns 250 miles in a month will acquire a Frequent
Flyer Excise Charge of 25 cents.
Content Continues Below
Christopher Elliott is a writer in Annapolis, Maryland.
Contact him at http://www.elliott.org
Contact Sources
MCI,http://www.wcom.com
Sprint,http://www.sprint.com