T axing travelers is a fairly common way to fund state and local tourism promotions.
The South Dakota Legislature, for example, voted in 1995 to remove the Department of Tourism from the state budget and instead fund the department's operations through tourism taxes. But in 1996 visitor numbers were down in the state, fewer tax dollars were collected, and the Department of Tourism's budget dropped 35 percent. For the past 10 years, Travel Montana, that state's tourism department, has been funded by a 4 percent bed tax. The success of the bed tax has not escaped Montana legislators. Introduced in the current legislative session were a number of bills aimed at claiming some tourism tax dollars for the state's general fund, including one that would have capped the amount of money Travel Montana could receive, with the overage going to the general fund.