Tourism tax credit gains industry support
A panel of Tourism Taxation experts today announced unanimous support for proposed legislation which will help stimulate the travel and tourism industry by offering tax incentives to the American public to travel.
The Taxation Policy Taskforce established by the World Travel & Tourism Council (WTTC) and made up of academics, private sector leaders, and government officials working in the travel and tourism industry, unanimously endorsed the proposal awaiting U.S. congressional approval to provide a tax credit of up to $500 per individual or $1,000 for a couple filing jointly for qualified personal travel and tourism (i.e. trips that exceed 100 miles from home and include at least one over night stay).
“If this proposal is passed by Congress, it will give vital stimulus to the travel and tourism industry and create strong conditions for a rapid recovery,” says Dr Richard Kelley, WTTC Taxation Task Force Chairman, and Chairman of Outrigger Enterprises, a hotel and resorts management company based in Hawaii.
“The tax credit will provide a great incentive for Americans to take their first step toward ‘normal’ travel patterns.”
The proposal contained in Senate bill S. 1500 and H.R. bill 3041 includes:
1) A tax credit for qualified personal travel expenses;
2) Full deductibility for business entertainment expenses; and,
3) Extended carry-back period for travel or tourism industry losses.
In assessing the tax credit initiative, the Task Force measured the proposal against WTTC’s guidelines for Intelligent Taxation, concluding that it adhered to criteria on efficiency, simplicity, and effective stimulus to growth.
In a statement released today, the WTTC said that it sees the rebuilding of the transportation and lodging sectors as central to the recovery of the U.S. travel and tourism industry, which will in turn benefit other sectors of the overall economy that provide complimentary products and services to the industry. The travel and tourism industry has been disproportionately hit by the events of September 11, and remains burdened by tax increases, which the industry has shouldered over the past several years.
The Task Force recommends that the tax credit be made easy for individuals to claim on their federal income tax forms, and that the deadline for taking the credit be pegged to six month’s from the date of the bill’s enactment. The panel also recommends a review of the situation after the six-month period for possible extension.
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