Planes, trains, and automobiles

Many hidden taxes are associated with travel. For example, when you pull up to the pump, you can clearly see the price for the gas, but the “taxes included” disclosure is usually posted somewhere else. How much of what you pay goes to tax revenue? Well, it varies by each state and its tax policy at the time, but it can range from 8¢ per gallon (Alaska) to 47.7¢ per gallon (California). (Source: Tax Foundation, Tax Data, February 25, 2011)

Taxes associated with traveling by air can include ticket excise tax, flight segment tax, arrival and departure fees, September 11 security fees, passenger facility fees, and–if your travel is international–agricultural inspection, customs, and immigration user fees. There are 16 or more fees that can add up to $61 (or 20% of your total cost) or more. (Source: Airlines for America, www.airlines.org, 2012) And those are just the U.S. taxes; there can be foreign taxes as well.

Car rental, hotel, and meal taxes can also add up. The GBTA Foundation, the education and research foundation of the Global Business Travel Association (GBTA), reported from its 2011 annual study of the top 50 U.S. travel destination cities that the travel taxes and fees imposed on travel-related services increased the traveler’s cost an average of 56% over and above any general sales taxes paid, and that taxes for a single night at the national average room rate of $95.61 were $13.12. The combined lodging taxes levied by state, county, and city averaged 13.73%. (Source: News Release, July 21, 2011, www.gbta.org).

Authored by: Brian White

Brian White is a Financial Advisor and an Associate Vice President at Ameriprise Financial located in Melville. Brian has over seven years experience in the financial services industry and runs a successful financial planning practice.  Over his career as a Financial Advisor, Brian has achieved notable accomplishments that rank him among the top of his peers such as The Mercury Award, The First Year Top Achiever and The Circle of Success.   Brian is a member of the Advanced Advisor Group and has earned the Chartered Retirement Planning Counselor designation. Brian works with clients to design a personal financial plan based on their life goals. This strategy focuses on helping them become more confident about managing their financial objectives. It is designed to provide solutions to both the everyday and long-term financial questions and is personalized to meet the needs of high net worth individuals and small business owners. Brian and his staff continually monitor progress toward financial goals and update plans based on changes in market conditions and individual situations. Brian attended Adelphi University from 2000-2004 and graduated Cum Laude with a Bachelors Degree in Business Finance. Contact:  631-574.2973 | Fax: 631.582.4243 | Mobile: 631.871.2560 | Brian.X.White@ampf.com Do you REALLY know what a comprehensive financial plan is?  Listen to Brian's 1/2 hour segment on TimetoPlay.com's Empower Half Hour The information contained in this material is being provided for general education purposes and with the understanding that it is not intended to be used or interpreted as specific legal, tax or investment advice. It does not address or account for your individual investor circumstances. Investment decisions should always be made based on your specific financial needs and objectives, goals, time horizon and risk tolerance. The information contained in this communication, including attachments, may be provided to support the marketing of a particular product or service. You cannot rely on this to avoid tax penalties that may be imposed under the Internal Revenue Code. Consult your tax advisor or attorney regarding tax issues specific to your circumstances. Neither Ameriprise Financial Services, Inc. nor any of its employees or representatives are authorized to give legal or tax advice. You are encouraged to seek the guidance of your own personal legal or tax counsel. Ameriprise Financial Services, Inc. Member FINRA and SIPC. The information in this document is provided by a third party and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Ameriprise Financial Services, Inc. While the publisher has been diligent in attempting to provide accurate information, the accuracy of the information cannot be guaranteed. Laws and regulations change frequently, and are subject to differing legal interpretations. Accordingly, neither the publisher nor any of its licensees or their distributees shall be liable for any loss or damage caused, or alleged to have been caused, by the use or reliance upon this service.

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