New tax will make travel in Maryland less competitive
and will strike its own citizens
The Maryland State Senate voted today to raise taxes on visitors, locals and travel agents. In a move that some might refer to as a tourism self-inflicted wound, the upper house of the Maryland General Assembly struck at the growth of travel and tourism in the state. The vote on Senate Bill 190 will resonate negatively throughout the state’s tourism infrastructure if the bill becomes law.
Travelers United, a consumer advocacy membership organization, has worked for years to limit taxes levied on travelers. These proposed increased travel services taxes are what amounts to taxation without representation for visitors and a new tax for local businesses in the travel industry. However, as with many legislative efforts cloaked in soaking visitors, the incidence of these travel taxes will fall on state citizens as well.
In the past, when travel agents sold a hotel room to a customer, the room rate was taxable. This new law now will also tax the travel agents’ service charges in the booking. Every struggling small travel agent, vacation rental operator, tour operator and wedding planner in Maryland will how have a new tax on their services to contend with. Depending on how this law is interpreted, these taxes on travel services may be assessed whether the hotels booked are in Maryland or somewhere else.
In a world where travel and tourism dollars spent in local shops, with tour guides, while dining at restaurants, when sailing and boating and for accommodations are considered manna from heaven, it is hard to understand why a legislature committed to no new taxes has managed to do just the opposite. Why discourage the very visitors who bring their money to spend in Maryland before they even get there.
Besides taxing small business with a new travel services tax that will affect every person visiting a local travel agent, this tax will also affect Marylander users of the online travel sites that bring millions of visitors to the state through their worldwide reach and advertising. These online agencies sell more than a quarter of room nights booked in Maryland to locals for friends and family or for themselves when visiting other areas of the state.
Travelers United asks that such a misguided tax should be reexamined and reversed. Rather than hindering the continued growth of Maryland travel and tourism, the government should be finding ways to make travel to this state more attractive and to work together with travel agents across the country to promote Maryland.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
