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High-Flying Taxes and Fees Drop Local Economy, Study Says

August 5, 2010 By: Melanie Gretchen Travel Agent

Travelers frequenting the North(east) might want to consider heading to California or further north to Canada, a study suggests, finding travel taxes and fees can drive travel costs up from 56 to 144 percent over sales tax. Published by the NBTA Foundation, the education and research foundation of the National Business Travel Assocation (NBTA) and sponsored by Concur Technologies, the annual report looked over the top 50 destination cities and the impact of car rental, home and meal taxes. Discriminatory taxes imposed specifically on travel services above and beyond general sales taxes are often used to fund unrelated local projects.

NBTA Executive Director & COO Michael W. McCormick said, "Ultimately, cities are hurting their economies two-fold, with hidden costs to local businesses and taxes out-of-town visitors will try to avoid."

The full report is available exclusively to Concur clients and NBTA members, prior to the NBTA International Convetion and Exposition August 8 to 11 in Houston. The top 50 markets are ranked by overall travel tax burden and by discriminatory travel tax burden, excluding general sales taxes to count only taxes targeting car rentals, hotel stays and meals. Separate data for central city and airport locations are offered, as tax regimes are often different.

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, are:

1. Fort Lauderdale, FL
2. Fort Myers, FL
3. Portland, OR
4. Detroit,
5. Honolulu

The cities that impose the highest total taxes on travelers are:

1. Chicago
2. New York
3. Boston
4. Seattle
5. Minneapolis

The U.S. cities with the lowest discriminatory travel tax rates in central city locations are:

1. Orange County, CA
2. San Jose, CA
3. Burbank, CA
4. San Diego
5. Ontario

The cities that impose the highest discriminatory travel taxes on travelers are:

1. Portland, OR
2. Boston
3. Minneapolis
4. Indianapolis
5. New York

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