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GBTA: Best and Worst Travel Taxes in U.S.

The Global Business Travel Association (GBTA) Foundation's annual report examines hotel lodging, car rentals and restaurant meal taxes in the top 50 U.S. destination cities in 2013.

by Staff
December 11, 2013
4 min to read


Taxes charged specifically on travel-related services increased the total tax bill for a traveler by 58% in 2013, according to a new report by the GBTA Foundation, the education and research foundation of the Global Business Travel Association (GBTA).

The annual study examines hotel lodging, car rentals and restaurant meal taxes in the top 50 U.S. destination cities, which are regularly used to fund local projects unrelated to tourism and business travel.

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“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,” said Michael W. McCormick, GBTA executive director and COO. “Congress may consider a doubling of the TSA 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. Yet governments insist on treating travelers like their ATM.”

“These types of punitive travel taxes will ultimately push business travelers to stay home, and we all pay when governments take a short-sighted approach that raises the costs for business travel,” added McCormick.

According to the GBTA Foundation, the study presents several views of travel taxes to help readers make informed choices. 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.

Total Travel Tax Burden

According to the GBTA Foundation, the top 10 U.S. cities where travelers incur the highest total tax burden in central city locations, factoring in general sales taxes and discriminatory travel taxes:

Rank in

Highest Total Tax Burden

Combined single day travel taxes

Rank in

2013



2012

1

Chicago, IL

$41.04

1

2

New York, NY

$38.65

2

3

Minneapolis, MN

$36.70

6

4

Kansas City, MO

$36.61

4

5

Indianapolis, IN

$36.00

8

6

Cleveland, OH

$35.41

7

7

Boston, MA

$35.32

3

8

Seattle, WA

$35.11

5

9

Nashville, TN

$34.75

9

10

Houston, TX

$34.16

10


The top 10 U.S. cities where travelers incur the lowest total tax burden in central city locations, factoring in general sales taxes and discriminatory travel taxes:

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Rank in

Lowest Total Tax Burden

Combined single day travel taxes

Rank in

2013



2012

1

Fort Lauderdale, FL

$22.61

1

2

Fort Myers, FL

$22.61

2

3

West Palm Beach, FL

$22.61

3

4

Detroit, MI

$22.80

4

5

Portland, OR

$22.86

5

6

Orange County, CA

$23.61

6

7

Burbank, CA

$24.59

7

8

Honolulu, HI

$24.67

9

9

Ontario, CA

$24.93

8

10

Orlando, FL

$24.94

10


Discriminatory Travel Tax Burden

Discriminatory travel taxes are those imposed specifically on travel services above and beyond general sales taxes. California and Florida are among the states with the lowest discriminatory travel tax rates in the country, according to the GBTA Foundation.

The top 10 U.S. cities with the highest discriminatory travel tax rates in central city locations:

Rank in 2013

Highest discriminatory travel tax rates

Discriminatory increase over general sales tax

Rank in 2012

1

Portland, OR

$22.86

1

2

Boston, MA

$19.34

2

3

Indianapolis, IN

$18.10

3

4

Minneapolis, MN

$17.46

6

5

Chicago, IL

$17.39

4

6

New York, NY

$15.96

5

7

Washington, DC

$15.61

11

8

Kansas City, MO

$15.26

7

9

Charlotte, NC

$15.16

8

10

Milwaukee, WI

$15.04

10


The top 10 U.S. cities with the lowest discriminatory travel tax rates in central city locations:

Rank in 2013

Lowest discriminatory travel tax rates

Discriminatory increase over general sales tax

Rank in 2012

1

Burbank, CA

$1.58

1

2

Orange County, CA

$3.16

2

3

Ontario, CA

$4.48

3

4

San Diego, CA

$5.27

4

5

Oakland, CA

$5.79

6

tie

Tampa, FL

$7.27

7

tie

Fort Lauderdale, FL

$7.27

8

tie

Fort Myers, FL

$7.27

9

tie

West Palm Beach. FL

$7.27

10

10

Los Angeles, CA

$7.37

5


“Municipalities are under pressure to raise revenue wherever they can, but imposing too heavy a tax burden on business travel is a shortsighted strategy,” said Joseph Bates, GBTA Foundation’s vice president of research. “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.”

“Rising car rental taxes helped boost travel taxes among cities where travelers already face some of the highest total tax burdens in the country. The recent 3% increase in the Motor Vehicle Rental Tax in Minneapolis and the 2% increase in the Auto Rental Excise Tax in Indianapolis pushed these cities toward the top of the high-tax group for 2013,” added Bates.

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