Historically, a lot of destination areas get a substantial part of the money used to market their destination from a room tax or surcharge on hotels and motels. It is commonly referred to as a “tourism tax” because the vast majority of it is paid by tourists, as opposed to local residents, and it is used to promote tourism. Although there are always exceptions to the general rule, typically, if this tax is expanded to other areas they are generally tourist specific such as tickets for attractions, shows, etc.
This acknowledges the reality of getting a tourism tax passed by the voters. It’s much easier to get voter approval if they are not paying the tax. A tourism tax on the lodging in hotels and motels is much easier to get approved than other tax proposals because most of those voting on it don’t use hotels and motels locally and won’t pay the tax.
There are some in Branson who would say, “Hold on Seagull, we have a tourism tax on meals purchased in restaurants.” Exactly the point, but it’s an exception to the general rule. That’s also why its rate is considerably less than the rate charged on lodging, shows, and attractions. Anyone want to take a bet on whether or not Branson’s tourism tax would have passed if it had contained a four percent tax on restaurant meals?
Unfortunately, 75 percent of the taxes collected from Branson’s current “tourism tax” must be used for infrastructure improvements, roads, water, sewers etc. Only 25 percent of the tax, on average, a little over $2 million per year, is available for marketing. In an Ole Seagull’s opinion, no matter how efficiently it is spent, that is not nearly enough in today extremely competitive tourist environment.
A current Taco Bell ad to “think outside the box” is good advice, not only for eating but for coming up with innovative ideas to raise needed marketing funds. Branson’s idea of charging a tourism tax on restaurant meals is certainly innovative from a tourism tax point. In addition to sleeping, and all the other typical tourist activities that tourists do, they eat. That’s the good news. The bad news is that residents also eat out and have to pay the tax too. Where’s the good news for the residents? There’s a lot more tourists than there are residents.
Tomorrow morning two people, one a resident of Branson and one a tourist, each spend $5 for breakfast. If the tourism tax on food in restaurants was one percent, each would pay five cents for a total tax collected of ten cents. Insignificant by itself but, what if instead of just two people, 25 percent of the approximately six thousand residents living in Branson, decided to eat breakfast out and spend $5 each. That’s a little more significant because the total tourism tax collected would be $75 for the day.
How much more significant do things get if about 60 percent of the average daily visitors to Branson paid $5 each to eat breakfast? About 6.5 times more significant because it would result in a total tourism tax collection of $493 for the day. In this example, on this day, for every dollar of tourism tax that a resident of Branson pays “tourists” will invest 6.5 times as much.
Don’t most tourists shop? Isn’t shopping one of the big draws to Branson? What if there was a one percent tourism tax on the retail sales of most items except cars, boats, food and medicines? If each of Branson’s approximately six thousand residents spends $3 thousand per year on taxable items, the total tourism tax collected would be $180 thousand. On the other hand, if the average tourist spent $150 each, over $9 million in tourism taxes would be raised or about 50 times as much.
“Come on Seagull, statistics can be used to justify anything.” That’s true, but the reality is that there are many more tourists than residents and, exponentially, they are going to pay much more in sales taxes than the locals. It’s a reality that can be used to get the Branson area the marketing funds that it needs to effectively market all that Branson has to offer.
In that context, what is needed is a vehicle to insure that the proceeds of any such tax are used to market Branson, in the most efficient manner possible, for the good of all, by an entity that is directly appointed by and accountable to the voters through one or more elected government entities. To an Ole Seagull’s everlasting disappointment and continuing amazement, in spite of the long standing need for increased marketing funds, he has yet to see such a vehicle.
