Taxes are a part of life, and the travel industry has its share of taxes. For domestic travel within the United States, most goods and services such as airfare, hotel rooms and restaurant meals have various taxes added on to the price of the purchase. The federal government, which has authority over the interstate travel industry, mandates the taxes and fees for modes of interstate travel such as airfare and train tickets. These taxes generally can’t be avoided unless the item being purchased has been deemed non-taxable.
These taxes are paid when you pay for your reservation or tickets with cash, credit card, or vision prepaid card. The most important thing to remember is that there are almost always room taxes, occupancy fees and a federal tax on airline tickets. These costs should always be added in to the price you are quoted so that you don’t receive any surprises. When you know exactly how much the trip will cost, it is much easier to budget and save for a vacation and to stay within your budget.
In Europe and Canada, there is the Value Added Tax, or VAT, on almost all goods and services. Non-residents of these regions are generally not liable for these taxes and can usually receive a refund when they leave the country. The merchant will generally complete the paperwork for you at the time of purchase.
It is important to keep the paperwork and present it upon leaving the country to claim a refund of the taxes that you are not required to pay. If you use a prepaid card when shopping in these countries, the tax will be refunded to your card. This means you can access the money immediately, without having to worry about exchanging currency.