Traveling? Bad news. In some American cities, visitors now shoulder travel taxes that can add as much as 30% to the cost of a trip, according to a new study.
In some cities, visitors shoulder tax burdens that can add 30% to the cost of a trip, and the number is expected to continue to rise, according to a new study by the National Center for Policy Analysis (NCPA).
Although many states have anti-tax sentiment, taxes on travel — including hotel occupancy and rental car fees — are an increasingly popular way to add to state coffers.
States and cities raise travel taxes because they are looking for more revenue without raising the taxes that the local electorates hate – sales taxes and property taxes
Topping the list is Portland. The average traveler to the City of Roses pays $22 a day in taxes, research found. It’s closely followed by Boston ($19) and Indianapolis ($18). Boston being my personal favorite city to travel to!
Travel Tax Specifics:
- About 22 states levy a specific statewide tax on lodging, ranging from as low as 3% to as high as 13% of the price of a night’s stay at a hotel or motel.
- At last count, 38 states levied a car rental tax. The tax burden is often higher when the car is rented at an airport, where a surcharge is added by the local airport authority.
- Taken together, airline taxes can amount to a 30% surcharge on some domestic flights. They include a 7.5% excise tax on every ticket purchased, a segment tax of $3.70 charged per takeoff and landing, and a “September 11 Security Fee,” which last year doubled from $2.50 to $5.60 per leg of each flight.
- Taxes have a negligible effect on airfares. Lower fuel costs, more competition and the threat of Department of Justice investigation into airline collusion have more to do with falling ticket prices than anything else.
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