Surcharge taxable?

I have played with taxes for 30 years. That said, you should seek advice from a tax professional.

I would have to research to give an educated answer. Based on the mechanics of taxation, I will offer what I think is a reasonable answer. It probably is because almost all money is subject to taxation at least once. But mostly because:

1) FSC is a part of gross revenue,
2) It is paid to susidize a cost of operation and
3) The cost of operation (fuel) is deductable as a business expense to the fuel purchaser.

IMHO, the only way it is not taxable would be if it is part of a tax credit. Most credits are gone or going away fast. The fact that what it pays for (fuel) is a deductable expense means the revenue is taxable. In taxation you seldom get a credit or deduction for something that wasn't taxable.

Now this is an un-reaseached opinion and should only serve as a stop-gap until you seek professional advice. Consider the fact, if it weren't seperated into revenue and FSC, if the pay was the same the tax consequences would be the same.

 

The answer is yes.

It is treated as earned compensation and then the expense of fuel is the total amount.

 

That's how I handle it. The surcharge is income and then the fuel is deducted as an expense.