Touring Americans Bound to Have a Taxing Vacation This Summer

Travelers to the Democratic National Convention in Chicago this summer had better bring along some extra money: Of 50 major American cities, the WindyCity has the highest level of “travel taxes” in the country. Republicans fare better: San Diego, the site of the GOP convention, is ranked 37th.

Travel taxes are state and local levies on services traditionally offered to out of-towners. The taxing plight of the American tourist was examined earlier this year in a survey of 50 cities by the Travel Industry Association of America (TIA). Not only do tourists get hit with higher-than-expected levies on travel-related activities, such as lodging and automobile rentals, but a fair amount of the revenues collected from out-of-towners gets deposited into general funds instead of being channeled back into local travel and tourism efforts.

Using TIA survey results, the Tax Foundation ranked the 50 cities in each individual tax category - lodging, restaurant, car rental (base rate), car rental (base rate plus off-site levy), and gasoline - and in terms of overall travel taxes. As Chart 1 shows, Chicago was joined by Seattle, Houston, New York, and Dallas in the top five. At the other end of the scale, Honolulu, Boston, Cincinnati, Atlanta, and Fort Lauderdale have the lowest tax rates in terms of travel taxes.