WASHINGTON — A proposal to boost tourism by providing tax breaks for Americans who travel inside the United States is being “actively” considered by the White House for inclusion in the next coronavirus stimulus package.
Three White House officials told McClatchy the tax credit for travel, which has been sharply curtailed by the coronavirus pandemic, is among the economic recovery proposals under discussion. They plan to make a formal recommendation to Congress next month.
“One of the things that is very much on the table is a tax deduction for Americans to do tourism activities,” one senior White House official said.
The U.S. Travel Association has proposed a tax incentive for travel of up to $4,000 per household to help restart domestic business and leisure travel.
The association’s proposed tax credit would allow for a refund of 50% of qualified travel expenses through the end of 2021, with qualified expenses defined as any purchase over $50 during travel inside the United States on “meals, lodging, recreation, transportation, amusement or entertainment, business meetings or events, and gasoline.”
President Donald Trump at a May roundtable with restaurant executives similarly pushed an “Explore America” tax credit, which he said could be used for “domestic travel, including visits to restaurants.”
An amount for the possible tax break or timeframe for Americans to use it has not been decided, the White House officials who spoke to McClatchy said. The tax break is still under discussion and is not guaranteed to be included in the legislative package the White House presents to Congress.
Kevin Hassett, a senior adviser to the president, said last week that Trump supports a tax incentive “to help people explore America” at a time when the travel and hospitality sectors have been hit hard.
The president’s National Economic Council director, Larry Kudlow, said the incentive could come in the form of a tax deduction, tax credit or a refundable credit.
“Pretty much from day one we’ve looked at that, and there seems to be a very broad agreement with congressional members that that would be a good thing to do,” Kudlow said.
A third White House official said the White House is “actively considering” the tax break and that a deduction could be introduced for a limited scope of time.”
Tori Emerson Barnes, executive vice president of public affairs and policy at the U.S. Travel Association, said the organization saw $4,000 as a “meaningful” amount that could encourage Americans who canceled their vacations amid the pandemic to travel again.
“The most important thing is a real stimulus that can help to encourage folks who obviously may feel uncertain about traveling to really help encourage them,” she said. “We hope that this will push them over and proceed with a trip, either leisure or business.”
Some potential travelers may decide to re-book travel, if they’re provided with a tax incentive, she said. “Given the uncertainty of the economic, of the broader economic challenges that the country’s facing, people also might want to hold onto their money a little bit more.”
Experts said there was also the question of whether a tax break would significantly spur tourism.
