Get Connected | Contact Us

Duty-Free Shopping and Taxes

by Lux Joseph 24. January 2014

Taxes, taxes, and more taxes...Each and every year consumers around the world are being faced with announcements and declarations about an increase in taxes. Whether it is property taxes, food tax, hotel tax, or sales tax; it appears that taxes around the world are always increasing. To confront this unpleasant change in society, the consumer is always looking for ways to reduce the amount of taxes they pay if at all possible. One way that people can reduce the amount of taxes they pay is to take advantage of duty-free shopping while traveling.

Duty-free shopping is available within international airport terminals, ferry stations, cruise ports and border shops.  For international travel the airlines require you to be at the airport at least two hours prior to your flight. At Commercial Medical Escorts our expectation is that our escort is at the airport at least three hours prior to an international flight. Once you check in with your airline and clear TSA you typically have time to explore the airport. This is when many people take advantage of the duty-free shopping that is available. But does the traveler really know what duty is?

The concept of duty-free shopping began back in 1948 and the idea was that once you were between passport controls you were essentially between two countries and therefore sales tax wouldn’t apply. Years ago when this was first established the three major commodities among travelers were alcohol, tobacco, and perfume. Even today, you will see in duty-stores that these three items still maintain a major presence and are a major source of revenue for storeowners. Many consumers wonder, “How much money are you actually saving at these stores?” The savings depends on the country of origin. Those countries that have a high value added tax (VAT) are listed below including the savings that are offered at the duty free shops:

  • Portugal          23%
  • UK                  20%
  • China              17%
  • Sweden          25%
  • India               13.5%
  • Russia            10-18%

If you were traveling through Hong Kong, United Arab Emirates (UAE), and Singapore to name a few, while there is duty-free shopping available, the savings are not as high. Hong Kong is 0%, Singapore is 7%, and UAE represents 4.5% savings. As a traveler, you must decide if the savings are substantial enough to make the purchase. It is important for the traveler to understand the prices at the airport and those prices within their home country.

Furthermore, before you going on a shopping spree, make sure you are familiar with the rules and laws surrounding duty-free shopping. These laws vary by country so before you think you are saving money we recommend that you review the following (www.dutyfree.com):

  1. If you're a U.S. citizen returning home after staying at least 48 hours in a foreign land, you typically may bring $800 of duty-free merchandise into the country. If you exceed that limit, you'll pay a 3 % surcharge on the next $1,000 worth of purchases. Those with over $1,800 of merchandise must pay a tax of up to 25% on the amount that exceeds this limit. 
  2. Americans with a foreign visit of less than 48 hours may usually import only $200 of duty-free merchandise. After that, the next $1,000 worth will be taxed at a 3% rate. Amounts over $1,200 are assessed a surcharge of up to 25%.
  3. When traveling with family members who live in the same home, you can combine exemptions. For example, a family of three may bring a total of $2,400 into the country on a duty-free basis. However, children aren't given a tobacco or alcohol exemption, so parents must stay within their own limits on these items.
  4. Items such as alcohol and tobacco products carry special restrictions that vary depending on where you bought the merchandise. Generally speaking, however, U.S. citizens may import up to one liter of alcohol and one carton of cigarettes on a duty-free basis.

Be smart and come prepared when it comes to doing duty-free shopping. Just like when you are shopping at the mall or your local department store; understanding prices and the value of an item will help you determine if the price is right. If you’re a fan of history and traveling to Shannon, Ireland in the near future be sure to check out the first duty-free store established in 1948. It is still there today.

Travel Expansion in Canada

by Lux Joseph 6. December 2013

Travel is changing each and every day. These changes range from new airline routings, new equipment, new hotels, updated airport terminals, travel advisories for certain destinations, new cruise lines, and new and improved frequent flier programs. Each of these changes can be viewed as transformations to not only the travel industry, but they also provide new and exciting opportunities for Commercial Medical Escorts. Our company works closely with a variety of different industries including healthcare, travel, transportation, customer service, and travel insurance. Changes in any of the industries can have an impact on CME and so it is important to keep up to date with these changes.

When traveling in/around Canada many people are familiar with Air Canada and Westjet; the two major players among airlines within Canada. However, recent news shows that a Vancouver-based trio is looking into launching a budget carrier within Canada. Budget carriers within the United States include Southwest, Air Tran Airways, Spirit, Allegiant and JetBlue.  Over the past three years the profit margins for JetBlue have continued on a positive track. When individuals, like this Vancouver-based trio, see other low cost carriers showing leading margins year after year in the USA, it provides insight for a program to be modeled after. This new competitor within Canada will not necessarily take business from the two major players, but provide a service that is not currently being capitalized upon: low cost, no frills flights. With that being said, West Jet is not going to just sit and watch it happen.

WestJet currently offers service across Canada, United States, Mexico, and the Caribbean. In the near future (Summer 2014) we can expect to see a daily flight between St. John’s Newfoundland and Dublin, Ireland. Currently WestJet does not offer any transatlantic routes, but this is just the beginning of that type of expansion. As with any new plan, expansion, improvement, or addition to a company, there is a process that takes place before launching something new. This process includes brainstorming, screening the idea, testing the concept, understanding the business analytics, conducting beta and marketability tests, technicalities and product development, commercialization, and post launch review and perfect pricing. The new routing will introduce the first nonstop service from St. John’s Newfoundland to Dublin, but it will also open up new routings to Dublin starting at other connection points within the WestJet service hubs. Should this service be successful, I believe we will see WestJet entering into our European markets including London, Frankfurt, Paris, and Madrid. Dublin was the first choice due to the airport authority offering incentives to attract new carriers like WestJet.

With new routings being introduced, carriers are also evaluating their current routes and determining if service should continue. Recently SouthWest has announced plans to discontinue service to Branson Airport, Key West International Airport, and Jackson-Evers International Airport. A date at which this will occur has not been determined, but Southwest states it will not affect travel within the next six months. American Airlines also recently discontinued service from New York JFK Airport to Tokyo Haneda International Airport on December 1, 2013. All of the services that are discontinued or canceled are done primarily because of limited profit on the routing. For American Airlines, they were allowed to only operate during restricted hours that limited their ability to offer connecting service to other Asia destinations. With all airlines, one canceled service, just opens up new opportunities for them to explore.

For each and every patient we transport home, we strive to find the most direct routing for the patient. Since we are working with commercial airlines, we are restricted to their availability and routings offered. Some flights are daily flights and other flights only operate on individual days. Our inside travel department provides us weekly updates with new information and this allows for only the most up to date travel information. The itinerary for a patient is very important to ensure a safe transfer home and delivering a variety of options to our clients allows flexibility and choice for the client.

Thanksgiving Holiday Travel Tips

by Lux Joseph 22. November 2013

One of the busiest travel times of the year is just around the corner. Typically when there is a high volume of travelers it tends to be a direct correlation to how busy Commercial Medical Escorts is. When individuals are traveling, that is when our service is needed most. While for many Thanksgiving is a holiday and time away from the office, CME is still open and ready to assist those travelers in need of our service. CME is open 24 hours a day, 7 days a week, and 365 days a year. There isn’t a moment when our operations team cannot be reached to further assist you.

A couple weeks ago I discussed the history of travel during Thanksgiving and the positive trends in air travel as reported by ARC. However, AAA is showing something a little different. AAA reports that 43.4 million Americans are expected to travel 50 miles or more from home during the Thanksgiving holiday weekend, a decrease of 1.5 percent from the 44 million people who traveled last year. AAA believes that this decline is due to a slow recovering economy. Although our economy is currently not in a recession, it is slowly recovering from the recession that we experienced in 2008-2009. With a slowly recovering economy consumers have uncertainty of what is going to happen and therefore are cautious with their spending. For those traveling by car, it appears as those the gas prices have had a slight decline in the last couple of months with the average price in Florida at $3.34 gallon.

Although AAA is report a decline travel, that doesn’t mean the roads and airports will not be busy so we encourage you to follow the following holiday travel tips:

·         Arrive Early- TSA can get backed up during heavy travel times, but especially during the holidays. Arriving early at the airport will ensure you have plenty of time to check-in, clear security and relax prior to your flight. Wednesday is the busiest day for travel and you should anticipate long lines. If you are not checking any luggage, check in on your mobile device or online and print your boarding pass. Skipping the check-in counter will save you time.

·         Be Flexible- traveling during the holidays can be hectic and bring unforeseen changes to your travel schedule. Your flight may be affected by a snowstorm or weather from a different area that will affect your flight. Understand that this is to be expected and know that the agent at the counter is not responsible for this so be patient and respectful. If you used a travel agent for your booking, contact them immediately when there is a change in schedule or canceled flight. They can hold you on the next flight.

·         Pack Accordingly- keep in mind that almost every airline is now charging to check your bags to your final destination. This doesn’t mean over pack your carry on luggage so that it is so big it cannot fit in the overhead space and you upset a long line of customers waiting to board. When it isn’t busy you may be able to get all the way to the gate with oversized carry on bags before they are identified, but during the holidays TSA will be stepping up enforcement to assist the airlines

·         Avoid Driving to the Airport- an increased number of travelers will be going to the airport during the holidays and that means airport parking will be very limited. If you do drive, you may be forced to pay holiday parking prices, limited to only off-site parking lots if the regular lots are filled, and this may cause unnecessary stress. Consider asking a friend or family member to drive you, use a private car service, or even look into public transportation. 

·         Do Not Wrap Gifts- if you are traveling with gifts, do not waste your time wrapping them. If TSA doesn’t like what they see in the scanner, they will unwrap it. It would be best to send them by mail via USPS, FedEx or UPS, but if that isn’t an option TSA suggests waiting until your final destination to wrap them.

·         Remaining Calm- many of our previous blog entries have discussed the anxiety and stress that comes along with traveling. It is important to bring things with you that may eliminate those feelings. If music relaxes you, make sure to bring your iPod and headphones. If reading calms you, bring your book to read in the terminal. Consider getting some earplugs so you can zone out the distractions around you.

 

At Commercial Medical Escorts, traveling is a part of our every day lives. Each travel season, AAA will provide a forecast of what to expect. This forecast is a good insight to the travel season and what can be expected. Highlights from this report include:

·         Thanksgiving travelers to total 43.4 million, a decrease of 1.5 percent from the 44 million who traveled last year

·         Ninety percent of travelers or 38.9 million to travel by automobile, a decline of 1.6 percent

·         Median spending expected to drop nearly seven percent to $465, compared to $498 last year.

·         The Thanksgiving holiday is a less expensive holiday for travelers compared to other holidays. This year Labor Day spending was expected to be $804, Independence Day $749 and Memorial Day $659.

·         Holiday air travel to decline 3.7 percent to 3.14 million travelers from 3.26 million in 2012

·         Average distance traveled to increase to 601 miles from 588 miles.

·         The Wednesday before Thanksgiving will be the busiest single day of travel with 37 percent of travelers departing for trips Nov. 27.

 

To read the full report visit www.AAA.com  or click on this link: http://newsroom.aaa.com/wp-content/uploads/2013/11/6-Thanksgiving_2013_Final.pdf.


© Commercial Medical Escorts. Optimized website design by MoreVisibility.