Cities' Hidden Traveler's Tax
In the midst of all the controversy surrounding the decision by some airlines to keep the federal excise tax revenue on airline tickets, you may have missed another tax scandal: travel taxes in general.
Recently, the Global Business Travel Foundation released its 2011 findings from its annual study of car rental, hotel and meal taxes in the top 50 U.S. cities. It found that travel taxes and fees imposed on visiting travelers created a cost of 56 percent over the general sales taxes. A traveler who visits Chicago, for instance, pays 80 percent more in taxes during a one-night stay than a traveler visiting Fort Lauderdale. For businesses planning meetings or conventions, this huge cost disparity can really make a difference in the bottom line expenses.
For years, dozens of American cities have used visiting business travelers to fund their football stadiums, convention centers and other municipal projects. Essentially, it's taxation without representation. Travelers don't live there and don't vote there, so it's a clever (but painful) way to gouge folks who just don't have a choice.
What's particularly troublesome is how many hotels in these cities apparently do not disclose the taxes when quoting their room rates. It makes it almost impossible to properly budget business trips.
For the moment, there has not been any huge outcry among business travelers. Just a lot of shrugging and adjusting projected upcoming budgets. And legislators have also been quiet -- after all, it's then one tax their own constituents won't oppose because it doesn't impact them.
So what can you do about it as a business traveler?
- Always ask hotels and car rental agencies to break out the total cost of their rate, including taxes, when quoting their prices. You may not have a choice in whether or not we participate in financing a city's new stadium, but once you know the taxes, you might be able to pick the city!
- Negotiate. Particularly if you are responsible for booking travel for group meetings and conventions, remember that cities are highly competitive for these big groups. That means you can either book based on the lower tax cities or, failing that, get individual hotels and businesses to lower their rates to match the total rates (including taxes) of competing cities.
Related:
- Airlines Benefit from Tax "Holiday" Not Consumers
- Airlines Profit from Fees, But Will Travelers Put up with It?
- Airline Survey: Customers Still Hate Extra Fees
