Senate Appropriations Committee Set to Vote on Massive Tax Increase for the Business Traveler

Alexandria, VA (July 26, 2017) – Yesterday, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies voted to approve a proposal included in the FY2018 Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Act, that would raise the Passenger Facility Charge (PFC) from $4.50 to $8.50. Michael W. McCormick, GBTA executive director and COO, sent a letter to the Senate Appropriations Committee expressing concern regarding the unintended consequences of such a fee increase on the business traveler. A copy of that letter can be found here. The Senate Appropriations Committee is expected to consider the proposal tomorrow.

“This is another example of how legislators are trading the word user fee for tax,” said Michael W. McCormick, GBTA executive director and COO. “But an increase in the PFC is just that, another tax increase. This precipitous hike in the PFC will result in a $3.2 billion tax increase on the business traveler. Business travel is an economic driver, which has an ROI that can be measured in jobs, sales receipts and state and local tax revenue. More taxes reduce the economic value of business travel.”

A study released this month by the GBTA Foundation, GBTA’s education and research arm, found that for every 1 percent change in business travel spending, the U.S. economy gains or loses 74,000 jobs, $5.5 billion in GDP, $3.3 billion in wages and $1.3 billion in taxes. Conversely, taxes and fees associated with travel have the opposite effect.

If enacted, the potential impact of the proposed PFC hike in the Senate FY2018 THUD Appropriations Act for 2018 is as follows:

A reduction of $2.74 billion of airline tickets sold in the United States
A decrease of $3.5 billion in U.S. GDP
Job loss by nearly 500,000 jobs

CONTACT: Colleen Lerro Gallagher, +1 703-236-1133, cgallagher@gbta.org

About the Global Business Travel Association
The Global Business Travel Association (GBTA) is the world’s premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. GBTA’s 9,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA and the GBTA Foundation deliver world-class education, events, research, advocacy and media to a growing global network of more than 28,000 travel professionals and 125,000 active contacts. To learn how business travel drives lasting business growth, gbta.org