What's Happening?
Several U.S. states are set to adjust taxes on short-term stays in 2026, affecting hotel rooms, vacation rentals, and other overnight accommodations. This move aims to raise funds for local services and tourism
promotion. Michigan lawmakers are proposing a new accommodations tax of up to 3 percent, contingent on local voter approval. In Colorado, Eagle County voters have approved a measure to double the lodging tax from 2 percent to 4 percent, effective January 1, 2026. Hawaii plans to increase its Transient Accommodations Tax from 10.25 percent to 11 percent. Saratoga County in New York is raising its hotel occupancy tax from 1 percent to 3 percent. In California, several jurisdictions are increasing transient occupancy taxes, with rates varying by area to fund infrastructure and homelessness services.
Why It's Important?
The adjustments in tourism taxes across various states reflect a strategic effort to generate additional revenue for local governments. These changes could impact the tourism industry by increasing the cost of travel accommodations, potentially influencing travel decisions and patterns. Local governments stand to benefit from increased funds for infrastructure and services, which could enhance tourism experiences and support economic growth. However, travelers may face higher costs, which could affect tourism demand and local businesses reliant on visitor spending.
