Economic Development

Tourism and Lodging Taxes

Issue Brief

Tourism and lodging taxes—unlike property and sales or use taxes—can be imposed on uses tied to tourism and spent in support of tourism, hospitality, entertainment and the arts at the state or local level. Taxes for hotel lodging, rental car and parking at event venues are the most common tourism-related taxes in the U.S. and Canada.

A recent discussion point focused on lodging taxes imposed on non-hotel short-term/vacation rentals (e.g., Airbnb, HomeAway). In many resort areas, tourism and lodging taxes are a main source of revenue for local government. And about half of all states impose a lodging tax. Another topic is online travel agencies (OTAs). OTAs may or may not pay a taxing jurisdiction the lodging tax on full price consumers but only on the sales price that the OTAs pay back to the hotels. Finance officers should find out how their jurisdictions resolved these issues.

Local jurisdictions that seek to impose or increase these taxes may face resistance from hotel and lodging associations. The associations claim that such taxes often increase hotel room vacancy rates and result in lost revenue to lodging facilities.


  • Publication date: March 2020
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