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Tourism taxes and fees

How to squeeze new tax revenue from global travelers

Oct 03, 2010

Taxes on travel continue to soar as states and citieslook for new revenue from tourists. And these levies aren't justconfined to the United States, where virtually all cities impose hotel-room taxes. They're common across the globe, too.

Take the Maldives, a prime resort island in the IndianOcean. There, the government is mulling a new environmental "greentax" on tourists that is expected to generate $8.3 million a year.Some 700,000 tourists visit this Hawaii-like nation eachyear and likely soon will be helping to pay the government's cost ofglobal warming.

Then Rome, saddled with an $11 billion debt, is considering a $12-a-night hotel tax because Italy, which usually contributes megafunds tohelp keep Rome solvent, is cutting back on its expenditures to avoidfalling in a Greece-like financial crisis.

Rome hoteliers arehoping that if the new tax is adopted, it won't result in a decreasein tourism numbers — nine million visitors a year frequent theEternal City.

We don't know of any large cities in Europe that don't levy a hoteltax — London is probably the highest at 15 percent plus. Hotelsin France add a tax of 15 cents per person, per night, in the smallestcities to $1.30 per person, per night, in the larger cities.

Barcelonatacks on a 7-percent nightly room tax while Amsterdam has a 5-percenttax.

It seems the United States still has the lead in targeting the walletsof vacation and business travelers. New York City raised its room andsales tax last year to 14.25 percent, but in addition there are otherfees that bring the total to more than 20 percent.

The room tax in popular Hawaii recently was increased to 9.25percent, while in Nevada a room tax has been upped by 3 percent to amaximum of 12 percent in Las Vegas. Reno's tax was already at 12percent and wasn't raised, according to USA Today.

In San Francisco, there will be a measure on the November ballot toincrease its room tax by 2 percent, which is expected to bring in $23million a year. The San Francisco tax currently is at 15 percent.Most of the money raised by the room tax goes into the city's generalcoffers, with expenditures not related to tourism. And that's true inother cities.

So which American cities impose the highest discriminatory traveltaxes on lodging, car rentals and meals? A new survey from theEconFirst Associations and the National Business Travel AssociationFoundation pinpoints those communities.

In computing only taxes that target car rentals, hotels stays andmeals, Portland, Ore., is tops with a daily total tax of $21.55.Next highest is Boston — now considering increasing its rental carlevy — at $21.52. Minneapolis comes in third at $16.51.

Travel industry groups are becoming increasingly critical of taxes onvisitors. Michael McCormick, an official of the National BusinessTravel Assn., told a publication that "enough is enough." He added, "It is unacceptable that visitors, whose general tax dollars can helpto keep a community afloat in difficult economic times, are forced topay so much more taxes and fees to fund projects unrelated to theservices they purchase.

Here and there

• The Metropolitan Airports Commission has received awards for itsdesign and marketing of the Value Parking Ramp (the Orange Ramp} at Terminal 2 (Humphrey) at Minneapolis-St. Paul International Airport.The 4,575-space ramp opened in February 2009. The InternationalParking Institute presented an "Award of Merit" to the facility,recognizing it as one of he top parking facility designs in thenation, said Jeff Hamiel, executive director of MAC.

The ramp is an intermodal facility, connecting directly to light railand housing auto rental, taxi and shuttle services as well as bicycleracks. Convenient light rail access between terminals makes it easyfor travelers to gain the price advantage of value parking regardlessof which terminal their airline uses, Hamiel said.

• The final figures are in: European airport operators saydisruptions from Iceland's volcanic eruption last spring cost themnearly $371 million in losses and 17 million lost passengers. TheAirport Council International Europe says the volcanic ash crisis"essentially broke our recovery," after logging growth of 5.2 percentin passenger traffic in the first quarter of 2010

How to squeeze new tax revenue from global travelers

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