Pa. hotel tax hike could kill smaller Philly levy for promoting tourism

A tax increase proposed in Harrisburg could kill a small tariff that Philadelphia hotel owners were going to impose on themselves.

The plan moving through the state Legislature would raise Pennsylvania’s hotel tax from 6 to 11 percent. Ed Grose, executive director of the Greater Philadelphia Hotel Association, said his members were ready to impose a surcharge on themselves beginning in January.

If the state raises the hotel tax, he said, all bets are off.

“Our tourism improvement district levy — which is called PHIL for Philadelphia Hospitality Investment Levy — goes into effect on Jan. 1,” Grose said. “However, if this tax were to go through, I would imagine support for the tourism improvement district would not be there.”

Grose said the planned tariff would be a positive move for the city, not a crushing tax.

“It would be 0.75 percent per room night, and it would go toward generating business,” he said. “This 5 percent [state tax hike] would not.”

Philadelphia hotels now collect 15.5 percent in taxes.  Starting Jan. 1, the total charges for taxes and fees will be 16.25 percent if the state tax does not increase.

The original 15.5 percent includes an 8.5 percent actual local hotel tax to generate funds for the Pennsylvania Convention Center, Philadelphia Convention & Visitors Bureau, and Visit Philadelphia.

For now, Grose said, his members are concentrating on going to Harrisburg to fight the proposed state hotel tax hike.