City

Harrisburg Apparently Wants to Kill Philly’s Hotel Industry

State legislators are considering a levy that would catapult the city's hotel tax to the highest in the nation.
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Philadelphia Skyline | R. Kennedy for Visit Philadelphia.

In an effort to end the state budget stalemate, Republicans in Harrisburg are pushing a plan to add a 5 percent tax on hotel stays statewide.

The levy would be on top of an existing 6 percent state tax, bringing the total Pennsylvania hotel tax rate to 11 percent. If the proposal got the green light, Philly would have the nation’s highest hotel tax, according to HVS, a consulting organization that specializes in the hospitality industry.

PennLive reports that Philly already charges the state’s highest hotel levy, and the tax here would jump from a combined rate of 15.5 percent to a whopping 21.25 percent if legislators backing the proposal have their way. (The increase is more than 5 percent because of another tax already scheduled to kick in in January.)

Hotel industry leaders, including the Pennsylvania Restaurant and Lodging Association, strongly oppose the plan.

In a statement, the nonprofit Power of Travel Coalition said the tax would “damage the industry’s ability to attract tourists and sell room nights – fewer visitors hurts the economy.”

House Majority Leader Dave Reed, who supports the proposal, reportedly claims that a hotel tax could generate as much as $96 million this fiscal year and $165 million next year. Reed told PennLive that of all the taxes and revenue plans proposed to fund the state’s $32 billion budget, the hotel tax plan has “the best chance” of passing.

Legislators recently voiced opposition to taxes on commercial warehouses (not a good look for Amazon, eh?) and Marcellus Shale natural gas production.

The House could vote on the plan as soon as Wednesday.

Follow @ClaireSasko on Twitter.