U.S. States Raise Tourist Taxes to Mitigate Overtourism: Here's the List

January 17, 2025 | 01:26 pm

TEMPO.CO, Jakarta - The United States, one of the top global tourist destinations, welcomes millions of visitors annually. According to CEIC data, over 54 million tourists visited the U.S. between January and September 2024. 

To capitalize on this influx, the U.S. has implemented a tourist tax to increase revenue. Several states have collected a lodging tax, also known as a temporary accommodation tax, on hotels, motels, apartments, rental houses, and bed and breakfasts. 

The tax amount and regulations vary by location and local government policies, with Houston boasting the highest hotel tax rate in the U.S. at 17 percent.

In addition to revenue generation for tourism infrastructure, the tourist tax aims to mitigate overtourism and protect the environment from tourism-related damage. To accommodate tourism needs, several U.S. states have recently increased their tourist tax rates. The list is as follows:

1. Michigan

Michigan recently passed Bill 6166, raising its tourist tax from 2 percent to 3.5 percent, effective from January 1, 2025, to December 31, 2030. The tax will further increase to 4 percent starting January 1, 2031. This tax applies to hotels, motels, and bed and breakfast accommodations. The revenue generated will primarily fund the state's tourism marketing program.

Michigan House of Representatives member Tyrone Carter said, “The funds are not used for anything other than promoting the Detroit area and all the things we offer that require money to advertise,” as quoted by Fox News on Wednesday, January 15, 2025.

2. Oklahoma

On October 1, 2024, Oklahoma increased its city's hotel tax from 5.50 percent to 9.25 percent, applicable to hotel stays and short-term rentals. The additional revenue will be utilized to attract more visitors, enhance marketing efforts, and support major festival events.

The 3.75 percent tax increase is expected to generate an additional US$11.6 million or approximately Rp189 billion in local revenue. The allocation for this increase includes 75 percent for tourism promotion, 13.3 percent for event sponsorship, 6.7 percent for Fairgrounds playground improvements, and 5 percent for convention center improvements. Prior to the increase, the 5.5 percent tax was allocated to Fairgrounds improvements at 55%, tourism promotion at 36%, and event sponsorship at 9%.

3. Hawaii

Hawaii's current tourist tax is 10.25 percent, with a 3 percent increase in some areas. Additionally, on January 22, 2024, Hawaii Governor Josh Green proposed the addition of a U$25 climate tax. The tax would be paid when visitors book a hotel or other accommodation while in Hawaii. This tax is intended to address the negative environmental impacts of tourism, especially after the fire in Lahaina, Maui.

The revenue generated from the climate tax would be allocated to a variety of environmental protection needs, such as forest and flood prevention, coral reef restoration, green infrastructure, land management, and emergency needs.

NIA NUR FADILLAH | FOX NEWS | USA TODAY

Editor's Choice: 7 Destinations Charging Tourist Tax: What Travelers Need to Know

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