New Study Maps Out Travel-Related Taxes

By Ken Berry, Correspondent 
 
Traveling is often physically and mentally taxing. It can also be a taxing experience from, well, a tax perspective. According to a press release by the Global Business Travel Association (GBTA), a Virginia-based business and travel meetings organization with more than 5,000 members, "taxes levied specifically on travel-related services increased the total tax bill for a traveler by 58 percent in 2013."
 
The GBTA reports annually on taxes for hotel lodging, car rentals, and restaurant meals in fifty of the top travel destinations around the country. Typically, these taxes are used to fund local projects unrelated to tourism and business travel.
 
According to GBTA Executive Director and COO Michael W. McCormick, the problem is exacerbating. "Unfortunately, it's not just state and local governments that see business travelers as their cash cow  the federal government is getting in the game," he said in a press release. "This week, Congress may consider a doubling of the TSA aviation security tax. Instead of driving TSA efficiencies that curb spending, Congress' solution is to double the amount travelers pay."
 
"Road warriors strengthen the economy, create jobs, and drive economic security," continued McCormick. "Yet governments insist on treating travelers like their ATM. GBTA is very concerned taxes and fees are approaching the tipping point that will ultimately push business travelers to stay at home. We all pay when governments take a shortsighted approach that raises the costs for business travel." 
 
The study ranks the top fifty markets by overall travel tax burden, including general sales tax and discriminatory travel taxes. For this purpose, "discriminatory" taxes are those specifically imposed on travel services in addition to general sales taxes. Two of the nation's worst offenders are California and Florida. 
 
The following two charts illustrate the ten US destination cities where travelers incur the highest taxes and the ten with the lowest tax burden: 
 
 
A final word of caution was offered by GBTA Foundation Vice President of Research Joseph Bates: "Municipalities are under pressure to raise revenue wherever they can, but imposing too heavy a tax burden on business travel is a shortsighted strategy. With taxes rising in every area of society, companies and travel managers are taking an increasingly hard look at the price they're being asked to pay to visit any given city or region." 
 
Related articles:
 

You may like these other stories...

A new Gallup survey found that 58 percent of smokers in the United States see increased state and federal taxes on cigarettes as an act of unjust discrimination, while 39 percent believe the tax hikes are justified.The...
Liberal groups object to bill barring taxes on Internet accessThe Internet Tax Freedom Act hasn’t been a controversial bill. In fact, it’s so popular that senators are seeking to pair it up with a far more...
As complex as federal tax can get, at least you're only dealing with one agency: the IRS. But when you get into state and local sales tax, you're coordinating hundreds of jurisdictions that are constantly changing....

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.