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Taxes on Hotel Stays Could Be Going Up

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On the same week that the City of Philadelphia announced that it would like to extend its hotel tax to people making lodging arrangements through third party electronic apps, the Pennsylvania General Assembly is giving the option to 54 of the state’s 67 counties to boost their local hotel tax from 3 percent to 5 percent.  Both levels are maximums–there is nothing that forces a county to levy the tax at all or, if it does, to set it at the maximum.

The Legislature is saying they are responding to the desires of counties and tourism agencies that have been asking for the increase.  A study on the history of hotel taxes in PA and the use of the tax can be found here.

Since the proposal only extends to certain counties from the third through eighth classes hotel patrons in Allegheny County will still be subject to the 7 percent maximum that is levied under the provisions of the second class county code (this is in addition to the 7 percent sales, use, and hotel occupancy tax levied by the state, which is 6 percent elsewhere, unless you are in Philadelphia).  For a look at how the hotel tax in Allegheny County is divided up, this handy flowchart should help.

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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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