Enjoy the holidays, but beware of hidden taxes


‘Tis the season for friends and family, but watch out for taxes hidden in almost all holiday traditions.


‘Tis the season to be jolly. It’s a time of year for friends, family and mistletoe, as well as holiday trips and gifts wrapped under the tree. But during this time of holiday cheer, Ebenezer Scrooge is lurking behind every corner and will reach into your wallet. I’m not referring to the mean-spirited character from the popular A Christmas Carol, but the hidden taxes included in almost all holiday traditions.

One of the more common customs is traveling across the country to spend the holiday season with friends and family. In fact, last year, over 100 million Americans packed their bags and hit the road or sky during late December. But with the lengthy car rides, airline travel and hotel stays come hidden taxes that make those goods and services more expensive.

As AAHOA members know all too well, Americans can pay as much as $50 in taxes when purchasing a $200 hotel room, depending on the location. These extra costs for consumers lead to shortened stays and can even deter travelers from staying in a hotel altogether. Instead, they might choose the cheaper option of crashing on a relative’s couch while the kids camp out on the living room floor.

Other hidden taxes increase travel expenses as well. Every time you fill up the gas tank, the sticker price balloons because of federal and state taxes, which amount to roughly 45 cents per gallon on average. Choose to hit the sky instead? Flights within the continental U.S. are subject to a 7.5 percent tax, a $5 to $10 security tax, and a $4 federal segment tax to name just a few hidden fees.

But travel is only one part of the holiday season and is not the only place hidden taxes reside.

They are also tacked onto the highly anticipated end-of-the-year bonuses that many Americans have come to expect. You see, the IRS views bonuses – whether they be checks or some other gift of monetary value – as supplemental income, and they are subject to all the taxes that come along with it. In some cases, half of your holiday bonus can be hijacked by the government.

But one of the most notorious hidden taxes is applied to almost every good or service you buy: the sales tax. While this tax is obviously applied all year round, the high level of shopping during the holiday season makes it much more financially damning. In fact, 2016 holiday shoppers spent over $1 trillion – with a big portion of that going to the sales tax. States like California have rates as high as 7.5 percent. And five other states – Indiana, Mississippi, New Jersey, Rhode Island and Tennessee – have a 7-percent rate.

With rising health care costs, ballooning regulations and high income taxes, Americans are already operating on tight budgets. These additional hidden taxes only push them further towards financial instability, while also reducing the potential sales of businesses whose product prices artificially rise.

So, during this holiday season, be sure to enjoy your friends and family as you travel across the country, but also beware of the many hidden taxes included in holiday festivities.   ■

Photo credit: Lemau Studio/Shutterstock.com


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