Discriminatory travel taxes and fees enacted on travel-related services impose an average increased cost on visitors of 57 percent over general sales tax, according to new research released by the GBTA Foundation, the education and research arm of the Global Business Travel Association.
Findings from the 2012 annual study of car rental, hotel and meal taxes in the top 50 U.S. travel destination cities found these taxes are often used to fund local projects unrelated to tourism and business travel.
“Business travel is a key driver of economic growth, but overly burdensome taxes on business travel can often do more harm than good, especially when those taxes unfairly target visitors,” said Joseph Bates, GBTA Foundation Vice President of research. “Cities and states must think carefully about the sales that local businesses will lose because of the higher costs that travel taxes impose.”
“Tax rates that spike add another dimension for travel managers and local businesses. If spending one night in Chicago is 81 percent more expensive than visiting Ft. Lauderdale, for example, it can have an effect on where businesses decide to meet, hold events, and spend their travel dollars,” Bates said.
The study provides several different views of travel taxes to help readers make informed choices. The top 50 markets are ranked in two ways. The first way is by overall travel tax burden, including general sales tax and discriminatory travel taxes.
The second is by discriminatory travel tax burden, excluding general sales taxes to count only taxes that target car rentals, hotel stays and meals. Discriminatory travel taxes are targeted at travelers or travel-related areas and go above the general sales tax.
The list below shows the top 10 cities’ daily average taxes incurred by travellers.
1. Chicago, Ill.: $40.31
2. New York, N.Y.: $37.98
3. Boston, Mass.: $34.83
4. Kansas City, Mo.: $34.58
5. Seattle, Wash: $34.43
6. Minneapolis, Minn.: $34.32
7. Cleveland, OH: $34.22
8. Indianapolis, Ind.: $34.19
9. Nashville, Tenn.: $34.13
10. Houston, TX: $33.51