New Study Maps Out Travel-Related Taxes | AccountingWEB

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." 
 
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