Do local taxes make tourists think twice about visiting Chicago?

Chicago has a little something for everybody. Museums, restaurants, shopping and sports give many people reason to put Chicago on their “must see” list. But the Windy City comes at a hefty price for tourists.

To begin with, the 9.75 percent sales tax is tied with Los Angeles for highest big-city rate. There’s a 11.25 percent restaurant tax, 15.4 percent hotel tax, and 12 percent auto rental tax — that may cause tourists to think twice before booking their Chicago vacation.

Chicago car rental bill June 6-8, 2011

According to an April report  by The U.S. Travel Association’s Travel Tax Institute, 49 percent of U.S. travelers changed their plans as a result of high travel taxes.

Danielle Powell, a tourist visiting Chicago from New York, was shocked by the high sales tax in Chicago. “It was ridiculous,” Powell said. “I thought New York was high at 8.875 percent.”

Virgina Hyatt, a proprietor of the Old Chicago Inn, said that many tourists are surprised to learn about the taxes they have to pay when they check out of the bed and breakfast, even though Hyatt tells them about the taxes when they book their reservations.

“People will sometimes try to negotiate with me over the room rates,” Hyatt said. “It’s a tough economy.”

“Travelers are often considered an easy tax target,” Roger Dow, president and CEO of the U.S. Travel Association said in the press release. “Few public officials understand how rising travel taxes influence consumer behavior and impact the economy.”

“About half of our customers are surprised at the taxes they have to pay when they rent a car,” Tim Dolan, an Enterprise Rent-A-Car employee said. “We always explain it to them on the front end so people don’t get so upset.”

The Travel Tax Institute, which conducts research to determine how high tourism taxes may impact economies on both a local and national level, found that travelers who did change their plans in an attempt to avoid high travel taxes ended up staying at less expensive hotels and spending less on shopping and entertainment.

“I would only do a weekend trip in the future,” Powell said. “I’d pay the tax and not avoid it, but prioritize my spending because of it. Thus, no store shopping on a whim. And I’ll only use mass transit.”

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