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NBTA Report Tracks Tax Costs to TravelersAugust 26, 2009 By: George Dooley
Even as new travel taxes are introduced and discriminatory travel tax rates continue to rise across the country, there has been a slight decrease in actual dollars travelers pay in taxes for lodging, rental cars and meals, according to the NBTA Foundation. The decline is attributable to decreases in the average rates for those travel services across the country. As the price of a car rental, hotel, or meal drops, the percentage-based taxes on those services drop.
The study was released by the NBTA Foundation, the education and research arm of the National Business Travel Association (NBTA), and Concur, a provider of on-demand employee spend management services. Fifty cities were surveyed.
“While the report shows that the travel taxes paid have slightly declined, we know that the fall is due to the weak economy and not tax cuts," said Fay Beauchine, NBTA Foundation Chair. "In fact, tax rates increased and more were implemented across the United States to make up for government revenue shortfalls during the recession. So when the economy recovers, travelers will take a double hit of rising prices and exploding taxes due to tax rate increases enacted during this downturn."
The report shows a year-over-year decline of $.53 in the average combined taxes a traveler pays on lodging, rental cars and meals in central city locations (as distinct from airport locations).
The study provides several different views of travel taxes. The top 50 markets are ranked by overall travel tax burden, including general sales tax and discriminatory travel taxes, and by discriminatory travel tax burden, excluding general sales taxes to count only taxes that target car rentals, hotel stays and meals. Separate data are offered for central city and airport locations, as the tax regimes are often distinct.
The research shows the U.S. cities where travelers incur the lowest total tax burden in central city locations, factoring in general sales taxes and discriminatory travel taxes for lodging, car rentals, and meals. Discriminatory travel taxes are those imposed on specifically on travel services above and beyond general sales taxes. Portland, OR was shown to have the lowest total tax burden at $21.45/day and Chicago with the highest at $40.99/day.
“Today’s economic environment places significant burdens on the travel manager to control costs,” said Steve Singh, chairman and CEO of Concur and NBTA Foundation board member. “Research such as that conducted by the NBTA Foundation is vital for making informed decisions. This knowledge becomes even more powerful when combined with the data captured by an end-to-end approach to travel and expense management. The result enhances visibility into corporate travel spend and increases policy compliance – which ultimately helps drive down costs.”