June 2, 2021
To: Members of the New Hampshire Senate
From: Americans for Tax Reform
Re: Oppose HB 15, Tax Hike on Tourism
On behalf of Americans for Tax Reform and our supporters across New Hampshire, I thank you for your public service in these challenging times, and efforts to protect workers and provide relief to taxpayers.
Unfortunately, House Bill 15, which would impose a new tax on travel agent services, is a tax hike, which goes against much of the good policy legislators have worked on this session.
HB 15 would expand the meals and rooms tax to agents, apps, and websites that help people book hotels and car rentals in New Hampshire, forcing them to collect the tax on fees that are required to offer these services. Meanwhile, taxes are already collected on the price agents arrange with a hotel.
Online Travel Agents, or OTA’s – like Expedia, Travelocity, and others – make it easier for people to book hotels or other accommodations online. They attract travelers to New Hampshire by offering a variety of lodging options at competitive prices. As such, OTAs are great for restaurants, shops, and other local businesses, as they benefit from tourism.
Adding meals and rooms tax to service fees is effectively a tax hike on tourism. Anyone who books a hotel stay, or car rental, through a third party, will find New Hampshire becoming a more expensive place to visit. Not only would this tax increase directly hurt many services, it will dissuade visitors, and make it more difficult for local businesses that benefit from tourism to recover from the devastating impact of COVID-19.
Tourism industries have been the hardest hit by the pandemic. Passenger air travel was down over 65% in 2020. The U.S. Travel Association states, “Almost four in 10 of all the U.S. jobs lost since February of last year are in the Leisure & Hospitality industry, according to analysis of the latest Department of Labor national jobs report.”
Attacking travel booking not only hurts agents, websites, and hotels, it hurts dining and other related businesses – like meat, agriculture, trucking, and retail shopping.
While this tax hike is guaranteed to increase the state tax burden, often these kinds of taxes fall short of revenue projections. Given the unique nature of the pandemic, and the uncertainty of economic recovery, especially for the hospitality sector, one would imagine revenues would be underwhelming. Attempting to take money from a beleaguered hospitality sector, and falling short of projections, may result in more pressure to increase other taxes down the road.
Lawmakers should continue to champion much-needed pro-growth tax relief. Do not let the Tourism Tax Hike undermine your work. ATR opposes HB 15 and urges you to vote NO.
Grover G. Norquist
Americans for Tax Reform