Group Criticizes Indianapolis Over High Traveler Taxes

Why a major association is pointing the finger at one city that taxes travelers at a higher rate than many others.

Think the hotel taxes in your area are too high? Just where do those taxes go, anyway? One trade group is trying to make sure taxes pay for where you’re staying, and nowhere else.

The Global Business Travel Association points in particular to Indianapolis, whose 7 percent tax is the second highest in the nation, Indiana Public Media reports.

According to the article, travelers to Indianapolis pay taxes at a rate of more than $34 per day on everything from rental cars to hotel rooms. The group is pushing against the tax, saying that the revenues aren’t going toward what the traveler really is paying for (hotels or rental cars) but instead public initiatives such as the Capital Improvement Board, which largely controls the state’s sports stadiums.

Despite this, the city is considering raising the rental-car tax, to raise more funds for local stadiums. This has happened before with hotels, in 2009, with hotel managers fearing the high taxes would drive business away.

But why the high rent? Ever wonder why hotel prices can get so high? We briefly covered this last November, but taxes are the main reason, as hotels are taxed relative to the city they’re in. (For instance, New York City hotels tax rooms at nearly 9 percent, with additional hotel occupancy tax.) Other factors include more amenities, which means your wallet opens not just for the room, but for the turndown service and the bellhop, too.

Heavy hitter: Even with Indianapolis taxes surging, it still falls behind Chicago, which rates as the most heavily taxed city at $40 per day. The least expensive? Fort Myers, Florida, and West Palm Beach, California, with just over $22 per day.

(photo by bnpositive/Flickr)

Chloe Thompson

By Chloe Thompson

Chloe Thompson is a contributing writer to Associations Now. MORE

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