Tethered hot air balloon tax

Kansas (in the United States of America) taxes sales of admissions to any place providing amusement, entertainment or recreation services. Hot air ballooning squarely fits into the category of amusement, entertainment or recreation so at first glance is subject to the Kansas tax.

Unfortunately for the Kansas revenue authorities, there is a conflict between their state-based tax and the federal Anti-Head Tax Act. The federal Anti-Head Tax Act prohibits states and local jurisdictions from imposing charges on airlines and other airport users. The Act defines ‘air commerce’ as including any activities that may operate within the limits of a Federal airway. As such, air commerce includes un-tethered hot air balloon rides, sightseeing flights, using an aircraft to tow a hang glider, and planes carrying a skydiver to a jump point.

The Anti-Head Tax Act treats un-tethered balloon rides where the balloon has piloted some distance downwind from the launching point as carrying passengers in air commerce. As such, Kansas cannot tax untethered balloon rides. In contrast, Kansas can, and does, tax hot air balloons tethered to the ground.

A tethered balloon ride is one where passengers go aloft in a hot air balloon that is tethered to the ground using straps or lines. Usually, the balloon is only 80 feet or so off the ground so this ballooning experience is ideal for people with fears of flying or heights. Also, this method of ballooning is the safest possible way to experience a hot air balloon ride.