The Exportability of Hotel Occupancy and Other Tourist Taxes

This paper examines the incidence and exportability of an ad valorem hotel room occupancy tax for Hawaii vis-à-vis alternative tourist taxes. The study employs a system approach and times series data (1961-1980). Results indicate that a hotel room tax is readily, though not fully, shifted/exported. It is more readily exported than similar taxes levied on entertainment and on purchased meals and drinks, or a general excise/sales tax, since taxes levied on non-lodging expenditures also fall heavily on residents. Our results also suggest that taxes imposed on tourist spending have a moderately large negative output effect on the visitor industry.