Sunday, December 9, 2012

City Leaders Set to Raise Taxes for CIB While CIB "Negotiates" to Give the Pacers Millions More

Jon Murray of the Indianapolis Star reports:
For years, hospitality industry leaders have protested creeping tax rates on hotel rooms, rental cars and meals that rank Indianapolis as one of the highest-taxed U.S. cities for visitors.

Bankers Life Fieldhouse
Soon they may have a fresh target: potential hikes being mulled by city leaders that could push taxes on car rentals from 15 to 17 percent and the admissions tax on Colts and Pacers tickets from 6 to 10 percent.
For the Indianapolis Colts, it's about sparing ticket-buyers from paying more. For the leader of the Indiana Hotel and Lodging Association, even higher car rental taxes could deter visitors and conventions from coming to Indianapolis. 
The car rental industry plans to fight any attempt to increase the rental tax. 
The 15 percent car rental tax rate recently helped rank Indianapolis No. 8 on the Global Business Travel Association's list of the worst 10 cities for travel taxes in 2012. The group also considered Indianapolis' 9 percent tax on food and beverages and its 17 percent tax on hotels. 
Topping that list were Chicago (which taxes car rentals at nearly 25 percent), New York and Boston.
"I'd be more concerned about the auto rental tax" increase, said hospitality industry spokesman said John Livengood, than a hike in the admissions tax. He said it makes sense that users of CIB facilities pay the tax to help support the agency's operations.    
But a higher car rental tax "would discourage people from coming to Indianapolis and spending money," said Livengood, who's president of both the Indiana Hotel and Lodging Association and the Indiana Restaurant Association, which are merging soon.
"That tax, like the hotel tax, is a disincentive for people to come here."
Ballard disagrees, saying that's not a consideration for him as he weighs whether to support seeking the tax increases.
But aside from arguments over travel taxes' impact, if any, on the tourism industry, the rental car industry long has opposed high taxes on its business as a matter of fairness, especially because many who end up paying aren't visitors but local residents who rent cars. 
To see the rest of the article, click here.

Global Business Travel Association earlier this year released a study showing Indianapolis as the 8th worst city when it comes to visitor taxes.

Increasing the rental car tax from 15% to 17% would add 80 cents to a $40 a day car rental.  That would push Indianapolis into 3rd place for cities with the highest visitor taxes, above every other city except for Chicago and New York.

Further, studies have shown that most rental cars are rented locally, not by visitors.  So the claim that the City's taxpayers won't bear the burden of these increased CIB tax increases simply isn't true.  That's not to mention the lost tourism dollars.

Finally, the article mentions that the CIB will be meeting on Monday to discuss the Board's "negotiations" with the Pacers regarding how many more millions of the public's dollars will be given to the Pacers.


Jon said...

Taxes on hotels and cars don't bother our mayor, he is traveling on our dime.
Here's a thought for the CIB how about putting the burden on the ticket buyers of the Pacers and Colts, that would be a true user tax.

Flogger said...

CIB "Negotiations" with the Pacers and Colts, now that is an oxymoron.

The CIB idea and our City Leadership idea of "negotiations" is to give the CIB what ever the Pacers and Colts want.

Corporate Welfare is one area both Political Parties are joined at the hip on.

Will there be one member of the Council who will speak out against this scheme???

Pete Boggs said...

Livengood makes perfect sense. Companies pay attention to those lists & it's not one a city wants to be on.