Travel taxes can really add up

Vacation time is winding down, and although many of us took staycations this year, a fair amount of folks managed to get a bit farther out and about. And the bills from such excursions — hotels, tickets and meals put on credit cards — are, and will keep, showing up for a while.

If you followed the advice of financial experts, you budgeted for your trip. But I bet there’s one line item you forgot: taxes.

A study commissioned by the National Business Travel Association (and written about in this USAToday story) finds that taxes take a big toll on both individual and company budgets.

It’s not unusual on one trip to encounter multiple levies. At a stay in Cleveland,
for example, taxes include a 3 percent city bed tax, a 3 percent Cuyahoga County bed
tax, a 1.5 percent tax to pay off the bonds for building the Rock and Roll
Hall of Fame and a 7.75 percent sales tax.

Ah, those pervasive state and local sales taxes, like the almost 10.5 percent charge tacked onto my fast-food meal on trip to Chicago. In that instance, I was paying not just the usual sales tax, but also a take-out tax created to raise money for anti-littering efforts. Such special charges aren’t unusual.

According to USAToday:

"Tax proceeds may go into a city’s general fund or may be used for a
non-travel purpose. For example, a 1.5% lodging tax in New Orleans is
used to fund the school system, and a 0.5% lodging tax in Tampa is used
to aid the homeless, says the American Economics Group, which conducted
the study. The Washington, D.C., consulting company specializes in tax
analysis."

The national newspaper also put together a chart showing travel-related taxes by airport. The most expensive place to fly into of the 50 airports examined? Cleveland, at which a traveler pays $45.92 a day in taxes. That includes $20.33 in sales tax, plus $25.59 in taxes aimed at travelers.

While as individuals traveling for pleasure we often can drive (if we can afford the gas!) and avoid some of these travel taxes. However, many business travelers still must fly. For an owner of a small business, that can take a big bite out of an already thin profit margin.

And even if you’re traveling on your company’s dime, if those corporate travel costs get too big, your ability to meet clients face-to-face could be curtailed. Worse, individual raises could be reduced to help cover your company’s growing travel budget.

Carrying an added fee: Though not technically a tax, the decision by some airlines to charge you for checking your bags can really add up if you insist on over packing.

I previously cited Sound Money Matter‘s advice on How to Pack a Suitcase so you don’t have to pay extra, but it’s worth a second mention.

And I highly recommend a post from my Austin-area friend and travel blogger Sheila, who at Perceptive Travel tells us how to be a suitcase Swami. How good is she? Sheila managed to literally pack her husband off for a week-long conference with just one suitcase!