Travel Taxes – Check your Car Rental and Restaurant Receipts; You May be Surprised

With Memorial Day weekend behind us, the summer travel season has (unofficially) begun. Soon millions of American families will be hitting the roads and taking to the skies for that well-deserved summer vacation. It is the perfect time to just head out and leave it all behind. One of the last things on your mind is probably taxes, but not so fast. Depending on your destination, you might be surprised how unforeseen taxes can take a big bite out of your vacation funds and fun.

Global Business Travel Association, a non-profit organization that tracks business travel data and expense trends, recently conducted a survey of the top 50 U.S. destination cities. The results showed that discriminatory travel taxes related to services increased a whopping 58 percent in 2013. The annual study examines things like sales tax rates, taxes on lodging, meals, and car rentals. In most cases, the revenue generated from visitor-related taxes is rarely used on projects related to tourism at all; instead, it is generally used to fund pet projects or to help offset budget shortfalls.

The outcome of the GBTA study is a listing of the top ten highest and lowest cities for the tax burdens placed on out-of-towners. As you might expect, Chicago and New York top the list as most expensive. In the case of Chicago, an average of $41.04 is tacked on in travel-related taxes, for each day of your visit! The city has the highest rental car tax and second highest restaurant taxes of the 50 cities evaluated, for an overall tax rate of 16.1 percent.

From the above GBTA chart, we see that Minneapolis, Indianapolis, and Cleveland became more expensive between 2012 and 2013. Boston and Seattle became slightly less pricey, while the remaining cities were unchanged.

Looking at the ten cities with the lowest tax burden placed on visitors, Florida has four cities listed, including the top three spots. All ten cities have held their standings from the prior year, with the exception of Honolulu and Ontario, CA, which have switched places on the list.

So, for comparison purposes, on a seven-day vacation in Chicago you can expect to pay $287 in taxes, as opposed to only $173 in Orlando.  So, what can you do with the extra $114? How about four Mickey Mouse t-shirts, or the gas to get there?