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Visitor levies: policy and debates

A ‘tourist tax’ (or ‘transient visitor levy’ or ‘occupancy tax’) comprises a levy on the occupation of hotel beds in a local authority area. It normally takes the form of a charge per occupied bed or room per night, levied on short-term accommodation providers. Charges may be set at a flat rate or a percentage of the price of the bed or room.

This research briefing explains how tourist taxes work, and looks at recent debates on their introduction at the UK level. It explains the Scottish Government’s introduction of powers for Scottish local authorities to introduce tourist taxes, and the Welsh Government’s bill to introduce similar powers in Wales. It also explains how some English cities have introduced forms of ‘tourist tax’ using Business Improvement Districts (BIDs).

The briefing also describes alternative forms of tourist tax, including cruise passenger levies, day visitor taxes, and taxes on visitors arriving or departing a state or locality. It provides some detail of commentary, industry views and research on tourist taxes.