Destination Information
Study: Chicago, New York Tax Travelers Most
August 10, 2010
Among the top 50 U.S. travel destinations, Chicago and New York impose the highest travel-related taxes on visitors, while Fort Lauderdale and Fort Myers, Fla., impose the lowest, finds an annual study of car rental, hotel and meal taxes by the NBTA Foundation, the education and research arm of the National Business Travel Association.
Released last week, the study found that discriminatory travel taxes and fees enacted on travel-related services — which often fund unrelated local projects — impose an average increased cost on visitors of 56 percent over general sales tax.
"The business and travel communities are increasingly concerned about the negative impact that taxes targeting travelers have on the greater travel industry and local economies," NBTA Executive Director & COO Michael W. McCormick said in a statement. "It is unacceptable that visitors, whose general tax dollars can help to keep a community afloat in difficult economic times, are forced to pay so much more taxes and fees to fund projects unrelated to the services they purchase. On average, the fees targeting travel services increase the tax burden by more than half, and in the worst cases, by up to 144 percent. Rest assured, companies are taking notice of these unfair burdens when determining how and where to spend their business travel, meetings and events dollars."
When it comes to overall travel tax burden, which takes into account a city's general sales tax as well as travel-related taxes, the cities with the highest taxes are:
1. Chicago
2. New York
3. Boston
4. Seattle
5. Minneapolis
The cities with the lowest overall travel tax burden, meanwhile, are:
1. Fort Lauderdale, Fla.
2. Fort Myers, Fla.
3. Portland, Ore.
4. Detroit
5. Honolulu
The NBTA Foundation also ranked cities based only on discriminatory travel taxes, excluding general sales tax, and found that the cities with the highest discriminatory tax rates are:
1. Portland, Ore.
2. Boston
3. Minneapolis
4. Indianapolis
5. New York
The destinations with the lowest discriminatory tax rates, meanwhile — all in California — are:
1. Orange County, Calif.
2. San Jose, Calif.
3. Burbank, Calif.
4. San Diego
5. Ontario, Calif.
"What many cities don't realize is that these taxes are not only burdening business travelers, but local businesses pay the price, as well. In fact, most companies spend the majority of their car rental and hotel budgets in the communities in which they have offices," McCormick concluded. "Ultimately, cities are hurting their economies two-fold, with hidden costs to local businesses and taxes out-of-town visitors will try to avoid."
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