A taxing issue for tourists
Not all cities tax equally so what’s the best place to visit if you hate taxes? A new study tells you where to go.
The top five destinations with the lowest travel-related taxes are in California this year. Florida used to be the place to escape taxes, but Orlando and Tampa, which were on last year’s list, didn’t make it this time, according to the study, “Travel Taxes in the U.S.: The Best and Worst Cities to Visit,”
The study found that taxes targeting travelers impose an average cost of 56 percent more than general sales taxes. Taxes on travel-related services, called discriminatory travel taxes, are for typical tourist stops such as staying at hotels, renting cars, and eating in restaurants.
“The discriminatory sales tax is above and beyond the general sales tax and is borne largely by travelers,” said Joe Bates, director of research for the GBTA Foundation, which released the this year’s report.
The GBTA Foundation is the education and research arm of the Global Business Travel Association (GBTA), a trade group for corporate travel managers and suppliers based in Alexandria, Va.
Do taxes make much of a difference in how much it costs to travel? Yes, the study says.
“The difference in the effective tax rate on travelers from one city to the next is quite remarkable,” said Bates in a release. He added:
“For instance, a traveler who visits Chicago pays 80 percent more in taxes during their one-night stay than a traveler visiting Fort Lauderdale. If you are a travel manager planning a meeting, this is important information to take into consideration. And if you are a retail business attempting to lure travelers, this tax rate differential is a competitive advantage or disadvantage.”
Cities and regions with disproportionately high taxes pose “an added burden to travelers,” Bates said. Areas with lower rates offer a completive advantage, he added.
Bates said the report’s findings could help travel managers make informed decisions on behalf of their companies. The information could potentially be used by local policy-making organizations.
In the four years that the report has come out, Chicago has been on the top of the list for all four years for cities with the overall highest rates.
Tax rates may be on the rise, at least for hotels, said Bjorn Hanson, dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University.
By David Wilkening
David
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