Michigan Joins Montana, New York, Florida, Hawaii, California, and Others to Change US Travel Dynamics by Implementing New Tourism and Hotel Taxes Starting in 2026: Everything You Need to Know

Written By: Jishnoo Banerjee

Jishnoo Banerjee

A published author with over 9 years of experience in writing, poetry, and novel creation. Starting out on social media, Jishnoo gained recognition for engaging content in both English and Bengali. With a strong background as a news content writer, Jishnoo now contributes to a prestigious global travel magazine. Known for blending creative writing with journalism, the work seamlessly combines artistic expression with insightful reporting across different platforms.

See Full Bio

November 17, 2025 17:06 GMT+5:30

Image generated with Ai

Michigan joins Montana, New York, Florida, Hawaii, California, and others to change US travel dynamics by implementing new tourism and hotel taxes starting in 2026. These changes are aimed at boosting local revenue and addressing infrastructure and tourism needs. With the rise in taxes across various states, including increases in the Lodging Facility Use Tax and Transient Occupancy Taxes, local governments are seeking new ways to fund essential services, such as homelessness prevention, environmental initiatives, and tourism promotion. As these states shift their focus from traditional funding methods, travelers can expect changes that will impact accommodation costs and overall travel expenses in the coming years.

Michigan: Lodging Facility Use Tax Starting 2026

Image generated with Ai

In Michigan, the Lodging Facility Use Tax (also known as the bed tax) remains at the current 4% rate with no confirmed increases for 2026. However, there are discussions about redirecting a portion of lodging tax revenue toward property tax relief, which could affect funds for tourism promotion and related services. This potential shift in funding may impact the state’s ability to market itself as a tourist destination while providing property tax relief to residents and property owners.

Montana: Lodging Facility Use Tax Changes Starting 2026

Image generated with Ai

Montana‘s Lodging Facility Use Tax (bed tax) remains at a consistent 4% rate, with no immediate plans to increase the rate in 2026. However, there are proposals to redirect lodging tax revenue towards property tax relief, which could reduce funds available for tourism promotion. This shift could have a significant impact on tourism funding in Montana, potentially affecting marketing initiatives that attract visitors to the state’s popular destinations.

New York: Hotel Occupancy Tax Changes Starting 2026

Image generated with Ai

New York is increasing local hotel taxes in some areas starting in 2026. In Saratoga County, the hotel occupancy tax (bed tax) will rise from 1% to 3%, affecting visitors staying in hotels and short-term rentals. This increase is aimed at generating more revenue for the region’s tourism initiatives. While this change is county-specific, it will still have a significant impact on tourists visiting Saratoga County, which is a popular destination for both leisure and cultural events.

Florida: Tourist Development Tax (TDT) Changes Starting 2026

Image generated with Ai

In Florida, significant changes are expected for tourism-related taxes starting in 2026. The state’s Tourist Development Tax (TDT) revenue will no longer be primarily allocated to tourism promotion and infrastructure. Instead, counties will be required to use at least 75% of TDT funds for property tax relief, shifting the focus away from traditional tourism marketing. Additionally, the state is proposing to remove the fixed percentage requirement for tourism promotion, providing local governments with more flexibility in how they utilize these funds. These changes aim to relieve property owners and redirect tourism-generated funds.

California: Transient Occupancy Tax (TOT) Changes Starting 2026

Image generated with Ai

California is introducing increased hotel and accommodation taxes in key cities, affecting visitors starting in 2026. In Menlo Park, the Transient Occupancy Tax (TOT) will increase from 14.5% to 15.5%, impacting hotel stays and short-term rentals. In San Diego, the hotel room tax (TOT) will rise to support infrastructure and homelessness services, with the rate varying by location. These changes reflect California’s efforts to generate more revenue from tourism while addressing local needs such as urban development and homelessness prevention.

Hawaii: Transient Accommodations Tax (TAT) Changes Starting 2026

Image generated with Ai

Hawaii is implementing a new tax structure for tourism-related services starting in 2026. The Transient Accommodations Tax (TAT) will increase by 0.75%, raising the total rate to 11% for hotel stays and vacation rentals. This extra levy is intended to support environmental protection efforts, such as shoreline restoration and wildfire mitigation. Additionally, Hawaii will impose an 11% tax on cruise ship bills when ships are docked in Hawaiian ports, aligning the tax with the accommodation tax to further fund environmental initiatives.

Other States’ Tourism Tax Changes Starting in 2026

Image generated with Ai

Several other states are also exploring or implementing changes to their tourism and hotel-related taxes, aiming to balance revenue generation with the needs of local economies. For instance, Texas is considering an increase in hotel occupancy taxes in high-tourism areas like Austin and San Antonio to fund city infrastructure improvements. Nevada is looking at expanding taxes on short-term rentals as a way to generate more revenue for public services and tourism development. Tennessee plans to increase its state-level hotel tax to support tourism marketing campaigns, particularly around major events and conventions. These changes reflect a broader trend of states utilizing tourism taxes to address local infrastructure needs while maintaining the appeal of their destinations for visitors.

Michigan joins Montana, New York, Florida, Hawaii, California, and others to change US travel dynamics by implementing new tourism and hotel taxes starting in 2026. These changes are aimed at boosting local revenue and addressing infrastructure and tourism needs.

Conclusion

Michigan joins Montana, New York, Florida, Hawaii, California, and others in changing US travel dynamics by implementing new tourism and hotel taxes starting in 2026. These adjustments reflect a broader trend across the country, where states are aiming to boost local revenue and address essential needs such as infrastructure improvements, homelessness prevention, and enhanced tourism services. As tourism taxes rise, travelers will need to consider these changes when planning trips, while local governments look to balance the needs of residents and visitors alike. With these shifts in tax policies, the landscape of US tourism is evolving, and the long-term impact will continue to shape both the travel experience and local economies.