Taxing the tourists

Are you about to head out for the long 4th of July weekend? Be sure to bring along some extra cash to cover the tourist taxes you'll probably encounter.

That's right. It's not being widely broadcast by state and local convention and visitors bureaus, but out-of-towners are the new hot revenue targets.

Tourist taxes are the latest way for cash-strapped cities and states to bring in some money. Back in May, I talked about some other desperate innovative options in Money-hungry states, cities tax trolling.

Taxing visitors is not a new idea. For years, accommodation taxes have been used to help pay for things such as new convention centers. The thinking is that the folks who will be coming in for the expos at the building should help pay for its construction.

Now, however, tourists are being tapped for more general revenue needs.

WalletPop notes that tourist-related taxes, either new or hiked, have shown up in Hawaii (hotel tax increase), Alaska (new per-passenger cruise tax) and South Carolina (higher Myrtle Beach sales tax).

Money vs. hospitality: Will the tax-the-tourist trend work? Perhaps, but probably just in the short term.

I've got to agree with WalletPop's Jason Cochran, who points out that increasing taxation on leisure spending is a stupid idea when leisure spending is down. 

In reality, given how many folks are taking staycations these days, most places might just find themselves treading water with fewer visitors bringing in a bit more via taxes.

And in the long run, the tourist taxes might even hurt.

There are a lot of variables that go into deciding where to spend recreational dollars. If a destination makes visitors feel like they're welcome simply because of their wallets, they might not want to come see you any more.

Comments

[Kay]

Richard,
It's not only visitors to the U.S. that look upon us as money grabbers! This time of year in particular that's the consensus of American taxpayers!

Love Canada, taxes and all! It's been way too long since we've visited. Go Leafs Go!

Kay

[Richard Toivonen]

Canada, as well, has a sales tax refund policy for out of country visitors. It is logical to reward our visitors for their tourist dollars. Most countries in Europe Austria, France, Switzerland) also do this. The U.S. continues to be looked upon as money grabbers.

[Stuart B]

As a visitor to the US from the UK, I can tell you that I do pay attention to local taxation and it makes a difference to where we visit. In the UK, tourists can obtain a refund of sales tax (VAT) on major purchases.

Surely its better to encourage visitors and increase overall income (i.e. not just taxation) for a state or city?

Stuart

[Karen Morris]

I live in Florence, SC, sixty miles from Myrtle Beach. The reporter sited a link to hotel sales tax in this story. The linked story recited a Mr. Chapman, who I believe is General Manager Steve Chapman of the Island Vista Resort in Myrtle Beach, but I'm not sure.

The other fellow is a small, local businessman who watches his income closely. The point being, a general manager doesn't pay the light bill for the resort, he only works there. If operating costs don't affect him personally, then I don't see how Mr. Chapman's opinion mattered when the story encompassed small business entrepreneurs in Myrtle Beach.

Myrtle Beach went through major rennovations over the past few years. Investors created some beautiful golf courses, and the city built a hugh airport mall to accomodate visitors. There have been several bookings made for art festivals this year, plus there are three zoos in the area, and several attractions only 30 minutes away.

If you haven't visited them, you're missing out.

Sure, the taxes are there, but if you aren't utilizing your time to visit all the attractions, all you see is a few blocks of restaurants and waterfront.

Go here to learn More:
http://www.visitmyrtlebeach.com/