Two Dollar Hotel Tax Generates $1.6 Million a Year in South Dakota Town
Many of the taxes levied on hotel rooms and rental cars are used by cities to build new stadiums or attract new visitors. The goal is to pick a tax that’s not too hight to drive away tourists.
A $2 per night room tax in Sioux Falls generates about $1.6 million annually.
The Argus Leader reports that the city ordinance that requires most hotels to charge the tax was established in 2011. The Convention and Visitors Bureau says it’s helped them attract visitors the city would not have reached in the past.
Best Western Ramkota general manager Jan Grunewaldt says the tax has afforded the community the luxury of having a larger pool of money to hit new markets.
Convention & Visitors Bureau Executive Director Teri Schmidt says the organization is doing more digital marketing in the coming year, an area that has doubled because of the money.
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