Lower Fees, Better Airports Act of 2023

Subjects: Taxation


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1550 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                S. 1550

  To amend the Internal Revenue Code of 1986 to include fees paid by 
airline passengers for goods and services offered during the course of 
          a flight as amounts paid for taxable transportation.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 11, 2023

  Mr. Schatz introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to include fees paid by 
airline passengers for goods and services offered during the course of 
          a flight as amounts paid for taxable transportation.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Lower Fees, Better Airports Act of 
2023''.

SEC. 2. FEES PAID BY AIRLINE PASSENGERS FOR GOODS AND SERVICES OFFERED 
              DURING FLIGHT.

    (a) In General.--Section 4261(e) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(6) Fees paid for goods and services.--
                    ``(A) In general.--Any amount paid to an air 
                carrier (or any related person) for any applicable 
                product in connection with taxable transportation shall 
                be treated for purposes of subsection (a) as an amount 
                paid for taxable transportation, and such amount shall 
                be taxable under subsection (a) without regard to any 
                other provision of this subchapter.
                    ``(B) Applicable product in connection with taxable 
                transportation.--For purposes of this paragraph, the 
                term `applicable product in connection with taxable 
                transportation' means any good or service which is 
                related to taxable transportation and which is offered 
                prior to or during such taxable transportation, 
                including--
                            ``(i) any service related to ticketing, 
                        booking, or the purchase of such taxable 
                        transportation (including payment processing 
                        and the change or cancellation or any ticket or 
                        reservation), regardless of whether such 
                        service is offered or provided electronically, 
                        by telephone, or in person,
                            ``(ii) the direct purchase of frequent 
                        flyer miles or qualifying points toward airline 
                        status from a frequent flyer or similar 
                        program, including any subscriptions related to 
                        such purchase,
                            ``(iii) the ability to redeem frequent 
                        flyer miles or points for transportation of 
                        persons by air or to accelerate the 
                        accumulation of frequent flyer miles or points,
                            ``(iv) any service relating to seating or 
                        boarding, including seat assignments, upgrades 
                        to a higher level seating product, priority 
                        boarding, or early check-in,
                            ``(v) the transportation (whether checked 
                        or carry-on) of any baggage, animal, or other 
                        property of the passenger,
                            ``(vi) any in-flight food or beverage,
                            ``(vii) any in-flight entertainment or 
                        wireless internet service,
                            ``(viii) any accommodation or assistance 
                        provided for an unaccompanied minor passenger,
                            ``(ix) membership in an airline club or 
                        similar program that entitles the passenger 
                        to--
                                    ``(I) free or discounted 
                                transportation by air, or
                                    ``(II) goods or services described 
                                in any other clause of this 
                                subparagraph, and
                            ``(x) any other good or service identified 
                        by the Secretary for purposes of this 
                        paragraph.
                    ``(C) Regulations.--Not later than 24 months after 
                the date of enactment of this paragraph, the Secretary 
                shall issue such regulations or other guidance as the 
                Secretary determines necessary to carry out the 
                purposes of this paragraph.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by this section shall apply to amounts paid 
        after the date of the enactment of this Act.
            (2) Special rule for applicable products identified by the 
        secretary.--In the case of any good or service identified by 
        the Secretary of the Treasury (or the Secretary's delegate) 
        pursuant to section 4161(e)(6)(B)(x) of the Internal Revenue 
        Code of 1986 (as added by subsection (a)), the amendment made 
        by this section shall apply to amounts paid after the earlier 
        of--
                    (A) the date determined by the Secretary of the 
                Treasury (or the Secretary's delegate), or
                    (B) the date that is 12 months after the date on 
                which the Secretary of the Treasury (or the Secretary's 
                delegate) identified such good or service pursuant to 
                such section.
                                 &lt;all&gt;
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