Main | Monday, April 12, 2010

Sen. Chuck Schumer To Feds: Tax Airline Fees For Carry-On Bags

Sen. Chuck Schumer (D-NY) is demanding that the Treasury Department closes a loophole allowing airlines to charge for carry-on bags without paying taxes on the added revenue.
Spirit Airlines' $45 charge for carry-on luggage is the last straw for put-upon air travelers, said Sen. Chuck Schumer. He's demanding that Treasury Secretary Timothy Geithner close a loophole that makes the fee extra profitable for the carrier. "Passengers have hit a breaking point on fees that are being imposed," Schumer (D-N.Y.) said Sunday. He sent Geithner a letter urging the reversal of a recent ruling that carry-on bags aren't "reasonably necessary" for air transportation and thus aren't subject to federal taxes. The tax cut gives carriers an incentive to tack on extra charges, Schumer said. Spirit can now bank the entire $45 fee without forking over $3.38 for taxes. Airlines already collect untaxed fees for many other in-flight basics, including snack peanuts and pillows.
Schumer says that if the feds can't figure out a way to block the fee entirely, he'll sponsor legislation that will.

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