The Bonus Is Not the Price

The 7.5% that appears at checkout

There is a second term missing from the advertised rate, and unlike the base price it is not merely unmentioned — it is added after you have seen the quote.

Buying miles from a US airline carries the federal excise tax on air transportation. 26 U.S.C. §4261(a) imposes 7.5% on amounts paid for taxable transportation, and §4261(e)(3)(A) extends that to “any amount paid … to an air carrier … for the right to provide mileage awards.” Selling you miles is squarely inside it, so the airline must collect the tax and remit it. It is not an invented fee and it is not avoidable at purchase.

On the worked example — 60,000 miles at $35.00 per thousand with a 100% bonus — that is $157.50. It turns an advertised 1.75¢ a mile into 1.88¢: a drag of 0.13¢ a mile that appears in no promotional material, because promotional material quotes the pre-tax price.

It is sometimes recoverable. §4261(e)(3)(C) lets the Treasury exclude amounts attributable to miles “used other than for transportation of persons by air,” and in practice the tax can be refunded on claim when purchased miles go to international travel or non-air redemptions. But it is claimed from the IRS rather than the airline, and it is a filing rather than a checkbox, so the honest default is to treat it as money spent. Hotel programs and foreign carriers generally do not charge it at all — which is why the buy points calculator makes the rate a field you can change rather than a constant.

The strongest promotion still fails the test

Put both terms together on the worked example and the result is uncomfortable. A 100% bonus is about the best this market runs. At $35.00 per thousand it buys Alaska Airlines Atmos Rewards miles for 1.88¢ each, against a published range of 1.55¢ to 1.60¢. Every publisher that values the currency prices it below what you would be paying. The purchase loses between $337.50 and $397.50 against their figures.

The instinct at this point is to blame the tax. That would be wrong, and it is worth being precise about why: the advertised 1.75¢ is already above the top of the published range before any tax is added. Strip the tax out entirely and the miles still cost 1.75¢, which still clears no published figure. The tax widens a gap that was already there. It is not what put it there.

Turned around, the same arithmetic says the promotion would need a 143% bonus — not 100%— before the miles cost what the least generous publisher says they are worth. Or the base price would have to fall to $1,730.23, from $2,100.00. Those are the two numbers no promotion page prints, and either one of them settles the question that the bonus percentage only gestures at.

Informational only, not professional advice. This guide explains arithmetic on figures you supply and cites published third-party estimates and primary tax law. It is not tax advice, it recommends no product, and it carries no affiliate links.

When buying points is right anyway

Everything above compares a purchase price against a published valuation, and that comparison has a real limitation that this guide would be dishonest to leave out.

A publisher's figure is an average over competent redemptions. It is not the value of the specific award in front of you. The genuine case for buying points is never “the bonus is large.” It is: there is a particular seat or room, priced in points, whose cash equivalent exceeds what the points would cost me. At 1.88¢ a mile, a booking returning more than 1.88¢ pays for itself whatever any average says. That is a comparison between your purchase price and the cents-per-point figure of your actual booking, and it is the only version of this question that can come out ahead of a published range on purpose rather than by luck.

The second legitimate case is smaller and more common: topping up a balance you are a few thousand points short on, where the alternative is not booking at all. Paying above the odds for the last 4,000 miles of an award is a rounding error against the value of the award.

What does not survive the arithmetic is buying points speculatively because a bonus is running. That is the behaviour the promotions are designed to produce, and it is the one case where the published valuations are exactly the right benchmark — because a speculative purchase is a bet on average future redemption, which is precisely what those figures measure.

Reading a promotion in four steps

1. Find the base price per thousand. It is the number the headline is a percentage of, and it is usually one click deeper than the bonus. Without it the bonus is uninterpretable.
2. Add the tax before comparing anything. For a US airline that is 7.5% on top of the quoted price. Check the total at checkout rather than trusting the promotion page.
3. Divide the total by the points you actually receive — base plus bonus. That single figure is the only thing worth comparing, and it is what the buy points calculator produces.
4. Compare it to your booking, not to a benchmark. Check it against the published range to see whether you are buying cheaply in general, but decide on the redemption you actually intend to make. If you do not have one, the published range is the right test — and it is a test these promotions usually fail.

What this leaves out

• Award space. Points you cannot spend are worth nothing regardless of what you paid. A purchase that looks cheap against every published figure is still a bad purchase if the redemption you wanted is not bookable.
• Devaluation risk. Purchased points sit in a program that can reprice its awards without notice. A completed redemption is not exposed to that; a balance is, and the longer you hold it the more this matters. It is the strongest argument against speculative buying and it is nowhere in the arithmetic.
• The cash has other uses. Money spent on points is money not earning rewards elsewhere, and not in your account. The comparison here is only against the published value of the points.
• Purchase caps and targeting. Programs limit how many points you may buy per year, and promotions are frequently tiered by purchase size or targeted to individual accounts. The offer you see may not be the offer anyone else sees, which is why no page here stores one.
• Alaska Airlines Atmos Rewards is valued by 2 of our three publishers, not all three. A narrower range is not the same as stronger agreement — it is fewer opinions. The guide to why the valuations disagree covers what the spread does and does not tell you.

Sources

• The Points Guy — points and miles valuations. Figures as of 1 July 2026. Refreshed monthly.
• CardRatings — points and miles valuations. Figures as of 10 June 2026. Updated periodically; no published schedule.
• Upgraded Points — points and miles valuations. Figures as of 1 July 2026. Refreshed monthly.
• The excise tax — 26 U.S.C. §4261. Subsection (a) sets the 7.5% rate; subsection (e)(3)(A) applies it to amounts paid to an air carrier for the right to provide mileage awards; subsection (e)(3)(C) is the basis of the refund described below.
• No promotion data is cited, by design. Every price and bonus in this guide is an illustrative structure, not a quotation from any live offer. PointCents holds no promotions database — see the buy points calculator for why.

Last reviewed: July 2026