State Senator Wants To End Bus-Trip Tax To Help Tourism

LCT Staff
Posted on April 7, 2009

TRENTON, N.J. — When Gwen Elmore books trips with her Virginia Beach, Va., bus company, she has to consider if it's worth it to travel to New Jersey, where her travel is taxed, versus other states, where it is not.

Elmore and about 40 others in the travel and tourism industry throughout the state and region were on hand Friday afternoon as state Sen. Jeff Van Drew rallied support for a bill he is sponsoring that would repeal corporate business taxes on out-of-state bus companies.

New Jersey's perilous fiscal shape as it tries to pass a $29.8 billion budget makes it unlikely state lawmakers would vote to repeal a tax.

But if it rolls back the corporation business tax, Van Drew, D-Cape May, Cumberland, Atlantic, said tourism would grow and other taxes would make up the difference.

United Motorcoach Association President Victor S. Parra said a busload of tourists spends between $8,000 and $12,000 per day.

Van Drew said he does not know how much the tax raises, and the online version of the bill does not include a fiscal note. He filed the bill in October, and Assemblymen John J. Burzichelli, D-Cumberland, Salem, Gloucester, and Matthew W. Milam and Nelson T. Albano, both D-Cape May, Cumberland, Atlantic, sponsored it in the Assembly. It has not gotten a vote in either house.

Van Drew and others pointed to figures that show Atlantic City bus visits have declined more than 40% since the tax was imposed in 2001.

The latest available figures from the New Jersey Center for Hospitality and Tourism Research show 5,909 buses arrived in Atlantic City in 2007, the fewest since 1980.

Resort bus trips peaked at 14,929 in 1988, through the combination of novelty, the resort's former status as the East Coast's only gambling destination. and casinos seeking out the day-tripper market. Figures have varied since, but Van Drew and others said the tax is to blame for the 38.5% drop since 2001's 7,986 bus trips.

The tax requires charter bus companies to pay taxes on the percentage of their travels inside the state, or at least $1,000 per year. Elmore said she did not know how much her company paid but said she thought it cost more for accountants to compute the debt than it did to pay it.

Earlier in the day, other lawmakers told arts and tourism groups gathered for a legislative panel discussion on the third day of the Governor's Conference on Tourism that the current fiscal picture makes it unlikely the state will increase its tourism marketing budget.

Tourism groups are howling that the state proposed to spend $7.5 million on promotion, $2.5 million less than last year and below the $9 million threshold other legislation says is needed to continue to collect an $85 million tax on hotels and motels.

Beach replenishment funding, projected at $18.75 million, or less than the $25 million minimum required to collect a $234 million Realty Transfer Tax, is drawing similar ire. Gov. Jon S. Corzine's administration has said it can ignore the funding minimums as unconstitutional.

"I'd love to sit here and say tourism won't be cut, beach replenishment won't be cut," Sen. Jim Whelan, D-Atlantic, said, but the $7 billion gap between current state revenue and inflationary increases from last year's state budget prohibit it.


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