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Some Indianapolis Businesses Benefit From High Travel Taxes

By Indiana Public Media News Staff

Posted October 8, 2012

A survey from the Global Business Travel Association shows visitors to Indianapolis pay more in travel taxes than in most other American cities. State lawmakers say it is not a funding structure they plan to change, because it has been a windfall for the state capital.

The poll looks at taxes commonly paid by travelers, on rental cars, hotel rooms and food, among other items. Indianapolis visitors pay about $34 a day in such taxes, similar to rates paid in Boston, Seattle and Minneapolis.

John Livengood is the president of both the Indiana Hotel and Lodging Association and the Indiana Restaurant Association. He notes such taxes helped pay for the construction of Lucas Oil Stadium and the expansion of the Indianapolis Convention Center, but says the costs and benefits are not shared equally.

"All of the businesses in downtown Indianapolis benefit from the convention center, but only the hotels and the restaurants are singled out to pay the tax," Livengood says. "And that is not equitable either. The suburban hotels and restaurants are paying the tax, and they don't see the benefits. So there are a lot of equities here that could've been taken care of if we'd funded this in a different way."

Among the 50 cities most visited by tourists, Indy ranks eighth in the amount of tax paid by travelers, according to the study. But State Budget Committee Chairman Luke Kenley says the appearance of high taxes is a function of having undertaken a couple major capital projects in recent years.

When other cities do the same, he says, Indy will fall on the list, and visitors appear willing to shell out a little more to come to the Circle City.

"We've had significant increase of number of visitors who are willing to pay the taxes," he says.

Kenley says he does not expect conversation about reducing the tax rate in the budget session of the legislature which begins in January.

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