Booking hotel stays across different states in the U.S. can lead to sticker shock once additional taxes and fees are added at checkout. For budget-conscious travelers, identifying the states with the highest hotel taxes is key.
If you’re short on time, here’s a quick answer to your question: The U.S. state with the highest hotel tax is Illinois, which has hotel taxes up to 17.4% in Chicago.
This comprehensive guide will break down the states with the top 10 highest hotel tax rates. You’ll learn what the rates include, get tips on avoiding surprises, and find out how hotel taxes are benefiting local tourism.
The 10 States With the Highest Hotel Tax Rates
1. Illinois – up to 17.4% (Chicago)
Illinois takes the lead as the state with the highest hotel tax rate, with rates going up to 17.4% in the city of Chicago. This tax rate includes the combined state, county, and municipal taxes imposed on hotel stays.
Visitors to the Windy City should keep this in mind when planning their accommodations budget.
2. Maine – up to 15.5% (Portland)
Maine, particularly in the city of Portland, imposes a hotel tax rate of up to 15.5%. This tax helps fund various tourism initiatives and infrastructure projects in the state. Travelers looking to explore the beautiful coastal areas of Maine should factor this tax rate into their overall travel expenses.
3. Michigan – up to 15% (Detroit)
Michigan, specifically in the city of Detroit, has a hotel tax rate of up to 15%. This tax helps support local tourism and economic development efforts. Visitors to the Motor City should be aware of this tax when booking their accommodations.
4. Rhode Island – 14% statewide
Rhode Island imposes a statewide hotel tax rate of 14%. This tax revenue is used to fund various state initiatives, including tourism promotion and infrastructure improvements. Whether you’re exploring the charming city of Newport or enjoying the beaches along the Rhode Island coast, this tax rate will be applied to your hotel stay.
5. New York – up to 14% (NYC)
New York, particularly in New York City, has a hotel tax rate of up to 14%. This tax helps fund the city’s tourism promotion efforts and other local initiatives. Travelers visiting the Big Apple should consider this tax when budgeting for their trip.
6. Hawaii – 13.75% statewide
Hawaii imposes a statewide hotel tax rate of 13.75%. This tax helps support the state’s tourism industry and infrastructure projects. Whether you’re staying in Honolulu or exploring the beautiful islands of Maui or Kauai, this tax rate will be applied to your hotel bill.
7. Minnesota – up to 13.5% (Minneapolis)
In Minnesota, the city of Minneapolis has a hotel tax rate of up to 13.5%. This tax revenue is used to fund local tourism initiatives and support the city’s economy. Visitors to Minneapolis should consider this tax when planning their accommodations.
8. Wisconsin – up to 12.6% (Milwaukee)
Wisconsin, specifically in the city of Milwaukee, has a hotel tax rate of up to 12.6%. This tax helps fund various local initiatives, including tourism promotion and economic development. Travelers staying in Milwaukee should take this tax into account when budgeting for their trip.
9. California – up to 12.5% (Anaheim)
California has a hotel tax rate of up to 12.5%, particularly in the city of Anaheim. This tax revenue supports tourism promotion efforts and other local initiatives. Visitors to Anaheim, home to Disneyland and other popular attractions, should be aware of this tax when planning their stay.
10. Massachusetts – up to 12.45% (Boston)
Massachusetts, specifically in the city of Boston, imposes a hotel tax rate of up to 12.45%. This tax revenue is used to support various state and local initiatives, including tourism promotion and infrastructure improvements.
Travelers exploring the historic streets of Boston should keep this tax in mind when planning their accommodations.
These are the 10 states with the highest hotel tax rates. It’s important to note that hotel tax rates can vary within each state, with different rates in major cities compared to smaller towns. When planning your travels, it’s always a good idea to consider these taxes and factor them into your budget to avoid any surprises during your stay.
Breaking Down Hotel Taxes and Additional Fees
When planning a trip, it’s important to consider all the costs associated with your stay. One significant expense that often gets overlooked is the hotel tax. Hotel taxes and additional fees can vary greatly depending on the location, and understanding how they are calculated can help you budget accordingly.
Let’s break down some of the key components of hotel taxes and additional fees.
State sales tax
One of the primary factors contributing to hotel taxes is the state sales tax. Each state has its own sales tax rate, which can range from 0% to over 10%. This tax is typically applied to the room rate, and in some cases, it may also include additional charges such as room service or spa services.
It’s important to note that state sales tax rates can change over time, so it’s always a good idea to check the current rate before booking your stay.
City and local taxes
In addition to state sales tax, many cities and local municipalities also impose their own taxes on hotel accommodations. These taxes can vary widely from one location to another and are often used to fund local infrastructure projects, tourism campaigns, or other initiatives.
Some cities may have a flat rate, while others may calculate the tax as a percentage of the room rate. It’s worth noting that these taxes can significantly add to the overall cost of your stay, so it’s important to factor them into your budget.
Occupancy or lodging taxes are another type of tax that hotels may charge. These taxes are typically calculated as a percentage of the room rate and are used to fund local tourism initiatives or support the maintenance of public facilities.
Again, the rates for these taxes can vary depending on the location, so it’s essential to be aware of them when planning your trip.
Some destinations, particularly those with high levels of tourism, may impose additional taxes specifically aimed at supporting the local tourism industry. These taxes can be used to fund marketing campaigns, maintain tourist attractions, or improve infrastructure.
If you are planning a trip to a popular tourist destination, it’s worth checking if any specific tourism taxes apply and accounting for them in your budget.
Many hotels, particularly those in resort areas, charge additional fees known as resort fees. These fees are separate from taxes and are intended to cover the cost of amenities and services provided by the hotel. Resort fees can include access to fitness centers, Wi-Fi, pool towels, and more.
It’s important to be aware of these fees when booking your stay, as they can significantly increase the overall cost of your trip.
Lastly, parking fees are another common additional charge that hotels may impose. Depending on the location and hotel, parking fees can vary from a flat daily rate to an hourly rate. Some hotels also offer valet parking services, which may come at an additional cost.
If you plan on driving to your destination or renting a car, it’s important to factor in these parking fees when budgeting for your trip.
Understanding the breakdown of hotel taxes and additional fees can help you plan your trip more effectively and avoid any unexpected expenses. Remember to research the specific taxes and fees that may apply to your chosen destination and consider them when setting your travel budget. Safe travels!
Avoiding Surprise Charges on Your Hotel Bill
When it comes to booking a hotel, it’s important to be aware of any additional charges that may be added to your bill. One of the most common surprises for travelers is the hotel tax. Different states in the U.S. have varying rates of hotel taxes, and some states have higher taxes than others.
So, which U.S. state has the highest hotel tax?
Check rates closely during booking
Before finalizing your hotel reservation, it’s crucial to carefully review the rates and charges. Look for any mentions of taxes or fees and make sure you understand what they entail. By doing so, you can avoid any unexpected surprises when you check out.
Factor taxes into your budget
When planning your trip, it’s essential to include hotel taxes in your budget. Take into account the average tax rates of the state you plan to visit. This way, you won’t be caught off guard by a higher-than-expected bill at the end of your stay.
Ask about additional fees
Aside from hotel taxes, some establishments may charge additional fees for amenities or services. It’s always a good idea to inquire about any potential extra charges beforehand. This will give you a clearer picture of the total cost of your stay.
Read the fine print
Before confirming your reservation, be sure to read the terms and conditions provided by the hotel. Pay close attention to any clauses related to taxes or fees. Understanding the fine print will help you avoid any unpleasant surprises.
Compare total prices across properties
When looking for a hotel, don’t just focus on the room rate. Instead, compare the total prices across different properties. This includes both the base rate and any taxes or fees. By doing so, you can find the best value for your money.
Inquire about discounts/waivers
It’s worth asking if the hotel offers any discounts or waivers on taxes or fees. Some establishments may have special promotions or loyalty programs that can help reduce your overall expenses. Don’t hesitate to inquire about these options.
Remember, being proactive and informed during the booking process can help you avoid surprise charges on your hotel bill. By checking rates closely, factoring taxes into your budget, asking about additional fees, reading the fine print, comparing total prices, and inquiring about discounts or waivers, you can ensure a more transparent and hassle-free hotel experience.
How Hotel Taxes Support Local Tourism
Hotel taxes play a crucial role in supporting local tourism in various ways. They provide a significant source of revenue for cities and states, enabling them to fund convention centers, support tourism marketing efforts, develop attractions, maintain infrastructure, subsidize transportation, and provide public services.
Fund convention centers
One of the primary uses of hotel taxes is to fund convention centers. These centers are vital for attracting large conferences, trade shows, and events, which bring in visitors from out of town. By using hotel taxes to fund convention centers, cities can host these events, boosting local tourism and benefiting the local economy.
Support tourism marketing
Hotel taxes also contribute to tourism marketing efforts. By allocating a portion of these taxes to promote their destinations, cities and states can attract more visitors. This marketing may include advertising campaigns, online promotions, and participation in travel industry events.
By investing in tourism marketing, destinations can increase their visibility and attract more tourists, leading to economic growth and job creation.
Another way hotel taxes support local tourism is by funding the development of attractions. Whether it’s building a new museum, renovating historical sites, or creating public parks, hotel taxes can be used to enhance a destination’s appeal and give tourists more reasons to visit.
These attractions not only attract visitors but also contribute to the overall tourism experience, making a destination more memorable and enticing for future travelers.
Hotel taxes also play a vital role in maintaining tourism infrastructure. Roads, bridges, public transportation systems, and other essential infrastructure elements require regular upkeep to ensure a smooth travel experience for tourists.
By utilizing hotel taxes to fund these maintenance projects, cities can provide a seamless and enjoyable experience for visitors, enhancing their overall perception of the destination.
In some cases, hotel taxes are used to subsidize transportation options for tourists. This may include funding public transportation services, shuttle buses, or even supporting the operation of tourist-friendly transportation options like trolleys or trams.
By providing affordable and convenient transportation options, cities can encourage tourists to explore more of their surroundings, leading to increased spending and further boosting the local economy.
Provide public services
Lastly, hotel taxes are also used to provide essential public services that benefit both tourists and local residents. These services may include maintaining public parks, improving safety and security measures, and funding cultural festivals and events.
By investing in these public services, cities can create a more welcoming and enjoyable environment for tourists, making them more likely to return in the future.
Other Considerations When Booking Hotel Stays
When booking a hotel stay, there are several important factors to consider beyond just the nightly rate. Here are some other considerations to keep in mind:
Overall nightly rate
The overall nightly rate is an important factor to consider when booking a hotel stay. However, it’s not the only cost that should be taken into account. It’s essential to look at the value you’re getting for the price you’re paying.
Some hotels may offer additional amenities or services that justify a slightly higher rate.
Before making a reservation, it’s important to check what amenities are included in the hotel stay. Some hotels may offer complimentary breakfast, Wi-Fi, or access to a fitness center or pool. These amenities can greatly enhance your stay and save you money on additional expenses.
On-site fees like parking
Another consideration is whether the hotel charges additional fees for amenities like parking. Parking fees can vary greatly depending on the location and can significantly impact your overall budget. It’s worth looking into whether there are any alternative parking options nearby that may be more affordable.
It’s crucial to understand the hotel’s cancellation policy before making a reservation. Life can be unpredictable, and plans may change. Knowing the cancellation policy in advance can save you from potential penalties or fees if you need to modify or cancel your reservation.
The location of the hotel is another essential factor to consider. Is it conveniently located near the attractions or business areas you plan to visit? Is it easily accessible from the airport or other transportation hubs? Considering the location can save you time and money on transportation costs.
Brand and service quality
The reputation and quality of the hotel brand are important considerations. Researching customer reviews and ratings can give you an idea of the level of service and overall satisfaction guests have experienced.
It’s worth investing in a hotel with a reputable brand known for excellent service and customer satisfaction.
Remember, when booking a hotel stay, it’s essential to consider more than just the price. Taking into account factors such as amenities, additional fees, cancellation policies, location convenience, and brand reputation can help you make an informed decision and ensure a pleasant stay.
With hotel taxes reaching up to 17.4% of room rates in some areas, it’s important for travelers to account for these added costs when budgeting. While high, hotel taxes do provide benefits for tourism infrastructure and promotion.
We hope this state-by-state guide better equips you to anticipate your full hotel bill. With preparation, knowledge of average fees, and careful comparison, you can still find and book great hotel values across the US.