Study highlights best, worst cities for tourist taxes
By Nina Golgowski, CNN
July 22, 2011 9:04 a.m. EDT
New York (CNN) -- A list of the top five 2011 U.S. cities with the lowest and highest tourism taxes is out, showing cost differences in as much as 56% on average, according to an annual study by the Global Business Travel Association Foundation.
Listed as the five lowest tax burdened cities out of 50 destinations, three Florida cities topped the list with Fort Lauderdale in first, Fort Myers in second, and West Palm Beach in third.
All are in both general sales tax and travel-related services such as car rental, hotel and meals.
Following in fourth was Detroit, and Portland, Oregon, in fifth.
The five highest-tax imposing cities on travelers had Chicago in first, New York City in second, Seattle in third, Boston in fourth, and Kansas City, Missouri in fifth, according to the study.
The study's findings show drastic tourism tax differences between cities, in some cases 80% more in comparison, according to Joe Bates, the foundation's director of research.
He says it could mean considerable sway in corporate travel plans.
"If you are a travel manager planning a meeting, this is important information to take into consideration," Bates says.
"And if you are a retail business attempting to lure travelers, this tax rate differential is a competitive advantage or disadvantage."
In 2010, Chicago's visitor spending added more than $11.1 billion to the city's economy, with $616 million of that total coming from tax revenue alone, according to statistics taken by the Travel Industry Association of America. The statistics are listed on the Chicago Convention and Tourism Bureau's website.
In contrast, Fort Lauderdale reported just below 11 million visitors in 2010. The visitors spent $8.69 billion in the city with $36.5 million generated by tourism tax revenues, according to the Greater Fort Lauderdale Convention and Visitors Bureau website.
The top five cities with the lowest discriminatory travel tax rates or travel-related services -- not including general sales tax -- are California cities of Orange County in first, San Diego in second, San Jose in third, Burbank in fourth and Ontario in fifth.
The five highest discriminatory travel taxing cities are Portland in first, Boston in second, Minneapolis in third, New York City in fourth and Chicago in fifth, according to the news release.
Bates says the foundation's annual report on the top 50 U.S. travel cities, is to a specific benefit of company travel managers.
"The rising cost of business travel, and especially meetings and events is an area of deep concern when developing travel plans," Bates says.
The foundation's findings were collected using the ERS Group, a statistical and economic consulting firm that calculated taxes paid by travelers staying at a hotel, renting a car and eating restaurant meals for one day and one night, as well as for a longer stay of three days and two nights, according to the study.