Travel taxes are sneakily high and, apparently, increasing
by Emily Saladino
August 25, 2015
Source: USA Today
Among travel’s countless unforeseeable costs (e.g. checked baggage fees, parking tickets, Dramamine) are taxes imposed by local governments on out-of-town visitors. Taxes on items perceived to be for out-of-towners, such as car rentals and hotel rooms, are higher than taxes for almost anything else, to the extent that they can pile an additional 30% onto overall trip cost. According to the Global Business Travel Association, travelers spend 57 percent more daily on duties than those paying general sales tax.
A recent study by the National Center for Policy Analysis, and new statewide legislation in Georgia and Mississippi, suggests these figures will increase.
Portland, Oregon, home of bike shops and nitro cold brews, levies the highest travel taxes in America: tourists pay an average of 22 extra tax dollars per day while visiting. The next top offenders are Boston ($19 per day), Indianapolis ($18) and Minneapolis ($17). Pricey New York City ranks sixth at around $16 per day.
Why do local governments impose tolls on travelers while at the same time investing in tourism marketing campaigns? Partly, the two are symbiotic: travel taxes furnished 90.5 percent of state tourism boards’ $837.6 million budgets in fiscal 2013-2014, per the U.S. Travel Association.
And partly, it’s that travelers don’t vote in cities they’re just visiting, so it’s NBD if they get mad at the local government. By getting extra dollars from tourists, cities can preserve lower taxes on issues that affect local voting constituents, such as housing and sales tax.
But while tourists can’t participate in local elections, they can be judicious with their travel dollars. The next time you’re on vacation, ask yourself: am I better off than I was four days ago?