Americans Would Get Tax Credits to Travel Under Senator’s Plan to Boost U.S. Tourism

U.S. Sen. Martha McSally (R-Ariz) is proposing offering tax credits to Americans who spend money on lodging and entertainment as a way to encourage more travel domestically.

The bill, called the American TRIP Act, would also give funding to destination marketing organizations (DMOs) in order to help them promote the travel and tourism industry around the nation.

Under the bill, up to $4,000 in travel tax credits would be given to individuals and $8,000 to joint filers (plus an additional $500 credit for dependent children), for money they spend on hotels or other travel. The tax credits would be provided for in 2020, 2021, and 2022 filing years.

Under McSally’s plan, a total of $50 million would be given to DMOs.

The credit will apply to all travel in the United States or its territories as long as all travel, expenses, and the final destination are beyond 50 miles of the principal residence of the filer(s).

“The tourism and hospitality industries were among the hardest-hit sectors across the country and their revival is critical to our economic recovery,” McSally said in a statement.

The U.S. Travel Association said it had proposed the idea.

“Travel has been hit harder by the fallout of the pandemic than any other U.S. industry, accounting for more than a third of the total jobs lost,” said Tori Emerson Barnes, U.S. Travel Association’s executive vice president for public affairs and policy. “The only way to get those jobs back is to get people moving around the country again, and the only way to do that is to incentivize travel.”

“Leaders on both sides of the aisle recognize that there is a critical need for legislation to provide relief for the travel industry, and also to stimulate travel demand,” she added. “We expect to see several bills in both the House and Senate that demonstrate bipartisan recognition of the importance of travel and tourism to the ultimate recovery of our country.”

The bill comes at a time when domestic travel is expected to suffer due to the coronavirus. According to the latest forecast prepared for the U.S. Travel Association by Tourism Economics, domestic travel spending is projected to drop by 40 percent this year (from $972 billion in 2019 to $583 billion in 2020).

The idea of subsidizing travel for citizens to boost the industry is not new to this crisis. Italy, for example, is providing “holiday bonuses” to lower-income families who travel. Other destinations are trying different ways to get tourists to visit.

McSally’s full bill can be read here.

CORRECTION: This story incorrectly stated that the tax credit would extend to trips within 50 miles of a taxpayer’s principal residence. It would extend to trips beyond 50 miles.

UPDATE: This story was updated to include quotes from Tori Emerson Barnes with the U.S. Travel Association and earlier a link to another story that talks about the different ways that destinations are trying to pitch travelers to visit.