There’s an excellent story in USA Today running down several cases in which local and state governments have raised taxes on travelers to make up budget shortfalls.
Hawaii and Las Vegas have both raised hotel tax rates, despite dreadfully low occupancy rates. And car rental taxes have gone up considerably in some places, most notably in in Milwaukee.
Whether these taxes draw in more income or defeat themselves by discouraging travel remains to be seen. What’s certain is that it’s easier to raise taxes on visitors than on local voters.
Local governments should be aware, however, that these costs do enter into tourists’ calculations.
A few months ago I was considering a trip to Tucson via Phoenix because airfares to Phoenix tend to be lower. But Phoenix also has extraordinarily punitive set of airport car rental taxes and fees. When I looked at the total cost of the car rental, I realized that the various taxes and fees (some for the car rental company but mostly for the government) has increased the price 55 percent above the base rate.
Here are the numbers:
Rental Time Charge $227.94APT CONC RECOV FEE (11.1%) $26.22Customer Facility Charge ($6.00 per day) $36.00Energy Recovery Fee ($0.45 per day) $2.70FAC MAINTAIN FEE ($0.93 per day) $5.58COUNTY STADIUM TAX (3.25%) $9.70STATE TAX (10.3%) $30.74VEHICLE LICENSE FEE (5%) $14.92Total Estimated Mandatory Charges (USD) $353.80