Utah officials have long maintained that travel and tourism is big business in Utah. But how big is big?
According to a report issued by the State Tax Commission, more than $405 million was spent on hotel and motel room rentals in 1994, and almost $1.4 billion was shelled out for restaurant food and drinks.Direct tourist-specific taxes on room rentals, restaurant food, rental cars and the like generated more than $30 million in tax revenue to local cities and counties.
The State Tax Commission report indicates that $12.1 million in hotel and motel room taxes alone were collected in 1994. All Utah counties now collect the 3 percent transient room tax, which primarily targets tourists and business travelers.
Transient room tax revenues were up 11.2 in 1994, compared with a 16 percent increase experienced in 1993. After adjustments for inflation, the 1994 growth rate was still pegged at 9.1 percent.
Room tax revenues grew in all Utah counties except Beaver, Duchesne, Kane, Millard and Washington counties. The biggest decline was in Duchesne County, where revenues dropped by 14.3 percent, and Millard County, which was down 10.4 percent.
The biggest increases were seen in Rich County (53.3 percent), Garfield County (33.2 percent) and Davis County (30.2 percent). In Salt Lake County, which generates almost four times the room taxes as any other county, revenues grew by 17.7 percent.
Statewide, the amount of money being spent on hotel and motel room rentals has grown from $261 million in 1990 to $405 million last year. The industry has grown every year since at least 1983.
In addition to the transient room tax, the Legislature authorized a local-option sales tax, called the Resort Communities Sales Tax, of up to 1 percent for cities where the transient room capacity exceeds the permanent population.
The report indicated that five communities - Tropic, Brian Head, Alta, Park City and Springdale - have imposed the 1 percent tourism tax, generating $3 million for those communities in 1994.
Under provisions of the Tourist, Recreation, Cultural and Convention Facilities Tax, passed by the Legislature in 1990, counties can also impose taxes of up to 3 percent on car rentals, 1 percent on prepared food and beverages, and an additional 0.5 percent tax on room rentals. This revenue was to be used to finance the costs of development, operation and maintenance of tourist and convention facilities.
The Tax Commission study indicated that 18 Utah counties have imposed the 1 percent restaurant tax, generating an additional $13.8 million in revenue on almost $1.4 billion in sales in 1994.
Two Utah counties - Salt Lake and Uintah - also have imposed the tourist tax on car rentals that do not exceed 30 days. That tax generated more than $2.5 million in additional tax revenue, the vast majority coming in Salt Lake County where tourists spent almost $85 million on car rentals last year.
Only Salt Lake County has elected to impose the additional one-half of 1 percent tax on hotel and motel rooms. The revenue generated by that tax was not reported in the study.
Of course, the revenues reported in the Tax Commission study reflect only tourist-specific taxes and not the amount of taxes being paid by tourists on such things as sales taxes on ski lift tickets and fuel taxes every time they pump gasoline into their rental car or tour bus.