GBTA's Michael W. McCormick Testifies at House Judiciary Hearing

Supports H.R. 2469 – End Discriminatory State Taxes for Automobile Renters Act of 2011

ALEXANDRIA, Va., Feb. 1, 2012 /PRNewswire-USNewswire/ -- Today, the Global Business Travel Association (GBTA), the voice of the global business travel industry, testified before the House of Representatives Committee on Judiciary, Subcommittee on Courts, Commercial and Administrative Law at hearing focused on H.R. 2469, the "End Discriminatory State Taxes for Automobile Renters Act of 2011".

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Introduced by Rep. Steve Cohen (D-TN) and Rep. Sam Graves (R-MO) in July of 2011, the bill proclaims that excise taxes on car rental consumers are unwarranted and would enforce a permanent halt on any new taxes. In August 2011, it was referred to the House Judiciary Subcommittee on Courts, Commercial and Administrative Law. Congress has enacted similar protections from discriminatory state and local excise taxes for other interstate travelers such as airline, train and bus passengers, GBTA agrees with the bill's sponsors that this is a logical and needed extension to protect business travelers.

A "discriminatory" travel tax is a tax that imposes a burden on travel services above and beyond general sales taxes. Excise taxes on car rentals are classic examples. This sort of tax differential is often justified with the claim that travel taxes shift part of the tax burden to nonresidents, but the reality is that businesses spend substantial amounts for rental cars in their own cities.

Appearing on behalf of GBTA, Michael W. McCormick, GBTA executive director and COO said: "GBTA and its members are not opposed to reasonable taxes or service charges that finance the costs associated with travel. We understand that a safe, efficient transportation infrastructure requires funding.  But business travelers – already a significant driver of revenue – should not be the financing source for local projects, including sports stadiums, museums and performing arts centers unrelated to travel."

Business Travel and the Economy
Although these discriminatory taxes increase business travel costs, and that directly impacts GBTA members, their negative impact on the nation's economy and jobs growth is painfully clear and cannot be ignored. As part of his testimony, McCormick shared the latest findings of the GBTA Business Travel Index™ to demonstrate the importance of business travel on the economy in general, and in particular that business travel is a leading indicator of U.S. employment. The business travel sector—transportation, lodging, entertainment, meals, meetings and conventions—is a significant component of the United States and world economies.  In the U.S., approximately 8 million Americans work in travel-and tourism-related businesses.  In 2011, U.S. spending on business travel topped $250 billion. Worldwide, over $1 trillion was spent on business travel and meetings. 

The latest projections show business travel maintaining an upward trajectory in 2012.  This, despite the fact that the business travel sector, the main economic and employment engine in a number of states, suffered a steep decline in 2008 and 2009 as the nation sank into recession.  U.S. companies operating globally are enjoying export booms and gains in their overall competitiveness. Corporations are expected to book 3.3% more trips abroad in 2012 and increase their international travel spend 7.7% to $34.3 billion. This follows 2011 growth of 9.1% in international travel spend.

GBTA research has also shown that the GBTA Business Travel Index™ is a leading indicator of U.S. employment: increased business travel equals increased jobs. If the GBTA Business Travel Index™ increases during a particular quarter, there is a very high likelihood U.S. employment will also increase during the following quarter. 

McCormick continued: "When businesses are confident in a growing economy, they send their employees on the road to secure even more business.  This results in an increase in sales for companies, necessitating the hiring of more staff to fill those sales, more employees to accommodate the needs of business travelers and a positive ripple effect throughout the economy. In 2012, however, GBTA projects that domestic business travel will lag to international. Policy, tax, and funding decisions made by Congress and Administration can have major impacts on the growth and success of domestic business travel - an industry vital to the United States recovery. Enactment of H.R. 2469 represents one of those policy decisions." 

About the Business Travel Quarterly Outlook 
The Business Travel Quarterly Outlook – United States projects aggregate business travel trends over the next eight quarters and includes key buy-side metrics such as total business travel volume and spending, plus supply-side projections of changes in costs, across both transient and meetings travel.  Business Travel Quarterly Outlook – 2011 Q3 United States is the fourth report in the series with subsequent releases being published on the second Tuesday of each quarter of the Fiscal Year 2012.

The Business Travel Quarterly Outlook uses an econometric model to better inform the forecast process.  The model explicitly relates measures of business trip volume and spending, sourced from D.K. Shifflet & Associates to key economic and market drivers of business travel including: U.S. Gross Domestic Product (GDP) and its components, U.S. Corporate Profits and Cash Flow, U.S. Employment & Unemployment, ISM Business Sentiment Index, Key Travel Components of CPI (airfare, lodging, food away from home, rental cars, fuel, transportation), among other components.

About the Global Business Travel Association
The Global Business Travel Association (GBTA) is the world's premier business travel and meetings organization.  Collectively, GBTA's 5,000-plus members manage over $340 billion of global business travel and meetings expenditures annually.  GBTA provides its network of 17,000 business and government travel and meetings managers, as well as travel service providers, with networking events, news, education & professional development, research, and advocacy. For more information, visit gbta.org. 

SOURCE Global Business Travel Association