Sticker Shock: Cities With the Best and Worst Travel Taxes

Do you ever take a close look at your final hotel or car rental bill and notice the tax rates and other fees? I do. And in some cities I get a little sticker shock.

Airline travel
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The GBTA Foundation, a division of the Global Business Travel Association, this week released a list of cities with the best and worst travel taxes. According to their research, discriminatory taxes and fees on travel-related services impose an average 57 percent higher cost on travelers—in addition to general sales tax rates.

Findings from the 2012 annual study of car rental, hotel and meal taxes in the top 50 U.S. travel destination cities found these taxes are often used to fund local projects unrelated to tourism and business travel.

"Business travel is a key driver of economic growth, but overly burdensome taxes on business travel can often do more harm than good, especially when those taxes unfairly target visitors," says Joseph Bates, GBTA Foundation vice president of research, in a press release. "Cities and states must think carefully about the sales that local businesses will lose because of the higher costs that travel taxes impose."

"Tax rates that spike add another dimension for travel managers and local businesses. If spending one night in Chicago is 81 percent more expensive than visiting Ft. Lauderdale, for example, it can have an effect on where businesses decide to meet, hold events, and spend their travel dollars," Bates says in the release.

U.S. cities where travelers incur the highest total tax burden in central city locations, factoring in general sales taxes and discriminatory travel taxes, are as follows (combined single-day rates):

  1. Chicago — $40.31
  2. New York — $37.98
  3. Boston — $34.83
  4. Kansas City — $34.58
  5. Seattle — $34.43
  6. Minneapolis — $34.32
  7. Cleveland — $34.22
  8. Indianapolis — $34.19
  9. Nashville — $34.13
  10. Houston — $33.51

U.S. cities with the lowest total tax burden are as follows:

  1. Fort Lauderdale — $22.21
  2. Fort Myers — $22.21
  3. West Palm Beach — $22.21
  4. Detroit — $22.37
  5. Portland, Ore. — $22.45
  6. Orange County, Cal. — $22.79
  7. Burbank — $23.74
  8. Ontario — $24.08
  9. Honolulu — $24.38
  10. Orlando — $24.50

For more information on the GBTA and the full 50-city report, click here.