For summer vacation, you've probably included the cost of a room
in a hotel or resort, a rental car, some nice dinners, and a few
souvenirs in the budget. But if you fail to include taxes, you
could end up with a bad case of traveler's remorse.
This year, taxes on hotels, rental cars and restaurant meals are
expected to cost travelers nearly $30 per day, on average, roughly
the same as last year. But that's up from $29.17 in 2012 and about
$28 in 2011, according to the Global Business Travel Association's
annual survey of top U.S. destination cities. "For a family of four
that might have budgeted $1,000 for their trip, they could end up
$100 or $200 over budget," says Joseph Bates, vice-president of
research for the GBTA.
The city with the highest total tax burden, which includes
general sales taxes as well as travel-related taxes, is Chicago,
where travelers pay an average of $41.04 in taxes per day. Second
on the list is New York City, at $38.65 per day. Fort Lauderdale
has the lowest tax burden, at $22.61 per day.
Travel-related tax increases enacted in 2013 include a 2%
"transient occupancy tax" tacked on to existing tax rates for
hotels in northern Virginia (which are popular with visitors to
nearby Washington, D.C.) and an increase in Minnesota's rental-car
tax from 6.2% to 9.2%.
Taxes on travel-related services have been on the rise since the
1990s, when protests against increases in property taxes led
states, counties and other jurisdictions to search for alternative
sources of revenue. Taxes on hotels, rental cars and restaurant
meals were viewed as a way to raise money without increasing the
tax burden on residents. But the GBTA argues that residents feel
the pinch, too, because locals also eat in restaurants, stay in
hotels for special occasions and rent cars when their own vehicles
are in the shop.
Meeting planners increasingly factor in the cost of taxes when
deciding where to hold conferences. "When you're talking about
1,000 people, those numbers add up," Bates says.
For leisure travelers, though, figuring out the amount of taxes
in a specific destination can be difficult, says Carol
Kokinis-Graves, senior state tax analyst for tax publisher CCH.
State sales tax rates are readily available (see our
State Guide to Taxes
), and most large cities provide information about taxes and fees
on their Web sites. But many smaller cities and jurisdictions that
impose their own taxes may not even have a Web presence, says
Still, you can avoid some sticker shock by planning ahead. Web
sites such as Orbitz and Expedia don't include taxes and fees in
their initial quotes for hotel rooms, but once you select a
specific rate and provide the dates of your planned visit, you'll
get the total cost. You don't need to provide your personal
information or credit card number to get this figure. Web sites for
some rental-car companies and travel discounters will give you the
total rental cost upfront; with others, you must select the car you
want to reserve to get that information.
Renting a car at an off-airport location could also save you the
airport concession fee--typically 11% to 13% of your total rate.
Just be sure to factor in the cost of cab fare. Some cities tax