How to avoid excise tax offset fees on points transfers from American Express
Editor's Note
If you want to transfer American Express Membership Rewards points to a U.S. airline, you may run into a pesky expense: the excise tax offset fee.
This only applies to transferring your Membership Rewards points to domestic airlines. However, there are still methods to book domestic flights with your points without paying the fee.
Here's what you need to know.
What is an excise tax, and how does Amex charge for it?
According to the IRS, excise taxes are "imposed on certain goods, services and activities," including transactions related to loyalty programs.
You'll often see them when purchasing points or miles directly from airlines, but they also come into play with transferable points.
To account for these taxes, American Express imposes an "excise tax offset fee" when transferring Membership Rewards points to a U.S. airline's loyalty program.
Here's how it's described on Amex's website:
"For each conversion of points into the Frequent Flyer program of a U.S. airline, a fee of $0.0006 per point, with a maximum fee of $99, will be charged to your Card account. We charge this fee to offset the federal excise tax we must pay on such conversions. The fee may be more or less than the actual amount of the excise tax we pay on any individual conversion. We may offer you the option to redeem points to cover this fee."
As noted, this fee applies only to U.S. airlines' frequent flyer programs. For Amex, this includes two programs:
Transfers to hotel partners and international airline programs are not charged this fee.
Related: How to redeem American Express Membership Rewards points for maximum value
What does the excise tax offset fee look like?
If you choose to transfer your points to a U.S. frequent flyer program such as Delta SkyMiles, Amex will prompt you with an excise tax offset fee.
In this example, you'll need to pay a $30 fee to transfer 50,000 Amex points to Delta SkyMiles. You can also use your points to cover the excise tax offset fee, but this isn't a good use of your hard-earned rewards.
By using 6,000 points to avoid the $30 fee, you'll redeem each point at just half a cent apiece, or a quarter of our April 2026 valuation of Amex points.
Related: What are American Express Membership Rewards points worth?
How to avoid the fee
As noted above, this fee is only charged on transfers to two of Amex's transfer partners. If you convert your Membership Rewards points to a hotel program's currency, there's no fee.
But most importantly, this fee is not charged for transfers to international airline loyalty programs — and you can often use these to book domestic flights.
For example, if there's award availability, you can use Air France-KLM Flying Blue or Virgin Atlantic Flying Club points to book domestic flights operated by Delta Air Lines.
Finally, it's worth noting that no other transferable points program charges a fee for these transfers. If you have Capital One miles, Chase Ultimate Rewards points or Citi ThankYou Rewards points, for example, you can transfer them to JetBlue without any additional charge.
Related: How to search flight award availability for the major airlines
Bottom line
If you plan to transfer Membership Rewards to Delta SkyMiles or JetBlue TrueBlue, remember to factor in the excise tax offset fees into the overall cost. Be sure to pay this fee with your American Express card, as redeeming Amex points in this way is not a good use of your rewards.
Otherwise, stick with hotel or international loyalty programs, as that's the best way to maximize your Membership Rewards points.
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