Which Cities & States Charge the Highest Lodging Taxes?
Vadim Liberman October 14, 2014
An annual report found that Connecticut charges the highest state lodging tax, while St. Louis charges the highest city lodging tax.
As anyone who has ever stayed in a hotel knows, a great room rate might not seem so great once the bill arrives. Government taxes can easily cause a room’s final rate to balloon, in some destinations more than others. HVS Convention, Sports & Entertainment Facilities Consulting recently released its third annual Lodging Tax Report, which details the levies that individual cities and states across the U.S. charged for hotel stays in 2013.
Travelers wishing to avoid paying a state lodging or sales tax on overnight accommodations should visit the only two states that don’t charge either — Alaska and California. The same cannot be said for local municipalities in those states, however, or elsewhere. Here is a ranking of the 10 states that charged the highest combined sales and lodging taxes on accommodations in 2013:
1. Connecticut — 15%
2. Hawaii — 13.25%
3. Rhode Island — 13%
4. Maine — 12%
4. New Jersey — 12%
6. New Hampshire — 9%
6. Vermont — 9%
8. Arkansas — 8%
8. Delaware — 8%
8. Idaho — 8%
On the opposite end of the spectrum, tied for 47th place, Oregon and Nevada each charged sales and lodging taxes totaling 1%.
When it comes to urban U.S. cities, these 10 charged the highest total tax rates on accommodations in 2013:
1. St. Louis, Missouri — 21.97%
2. Salt Lake City, Utah — 19.2%
3. Overland Park, Kansas — 17.65%
4. Birmingham, Alabama — 17.5%
4. El Paso, Texas — 17.5%
4. Omaha, Nebraska — 17.5%
7. Chattanooga, Tennessee — 17.25%
7. Cleveland, Ohio — 17.25%
7. Knoxville, Tennessee — 17.25%
10. Anaheim, California — 17%
[Photo: iStock]
There's another much simpler way to avoid paying sales and lodging taxes: Use hotel points (or free night certificates) for your stay, and don't charge any incidentals to your room. (That, of course, may be unavoidable at a "resort" hotel which charges a resort fee even on award stays.) But hotel taxes should not be a giant surprise upon arrival. Most hotel booking sites show the estimated taxes before you commit to the reservation (even if they don't show them on the first results screen). Those estimated taxes may be off by a few cents, but they should be in the ballpark. There are SOME third-party hotel booking sites that show the total including taxes on every screen (including the initial hotel results screen), but the problem is that they may not have the same rates as the site you want to book at, so in my experience it's hard to use them for' final price comparison. (I know these sites only from trying to do Best Rate Gaurantee claims with hotel chains.) I think these sites may most often be ones based in countries where tax (VAT) is commonly quoted as part of the rate (not separate from it as is the case in the USA). And, by the way, hotel taxes are based on your final bill. So if you can avoid eating at the hotel restaurant (if it's not free) and eating offsite, you MAY save on taxes. But double check: Some cities may have higher taxes on restaurants too (figuring it's mostly visitors who eat at those restaurants). Still, who care what the taxes are, if the final hotel bill is the low? Anaheim CA may have high tax rates, but all in all you're likely to find a hotel in Anaheim CA at a much lower room rate than down the road in Irvine, and so even with the higher taxes you may still save overall by staying in Anaheim as opposed to a community a dozen miles away.