Say Anything Blog

There may be, but making things like shopping and hotel rooms and attending local attractions more expensive in order to fund efforts to bring people to your state to shop, stay at hotels and attend local attractions is pretty illogical.

PIERRE, S.D. (AP) South Dakota’s tourism tax goes up next month.

The 2009 Legislature passed a measure raising the tax from 1 percent to 1.5 percent, effective July 1.

Lawmakers raised the rate to help fund arts programs and add revenue to the state general fund. The increase is expected to raise about $2.6 million and is to remain in effect for two years.

Some of the money goes to the South Dakota Arts Council and the state’s Archaeological Research Center.

The tax applies year-round to the gross receipts of hotels and lodging establishments, campgrounds, motor vehicle and recreational equipment rentals, recreational services, spectator events and visitor attractions.

When you tax things you get less of them.  If you tax the things tourists do you’re going to get fewer tourists.  Granted, this isn’t a huge tax hike, but it is expected to fleece tourists in South Dakota to the tune of about $2.6 million.  That’s not exactly small potatoes.

And does anyone think that the tourism promotion that $2.6 million will be spent on will result in enough economic impact to pay for it being taken out of the economy by the state in the first place?  It’s not bloody likely.

Taxes for things like “economic development” and “tourism” have become nearly ubiquitous across the country.  They’re easy for politicians to promote (if you’re against them then clearly you hate tourism and the economy), and the initiatives they fund are so broadly defined that the money ends up being little more than a slush fund for politicians and well-connected types to do with whatever they want.

Regardless, tourism and economic development are not promoted by higher taxes and unnecessary government spending.