Nebraska's Tourism Lodging Tax

As Nebraska's third largest revenue earner from outside the state, tourism has an important place in our state's economy. However, at the local or county level, decision makers may question if public investments in tourism really give a meaningful return on investment. While it is easy to see how visitor dollars benefit large tourism centers, it may be more challenging to understand the impact tourism has in more rural areas.

This NebGuide describes how Nebraska counties can use lodging tax statistics to estimate county tourism impacts by month, quarter or year. A brief explanation of how and why a lodging tax is established is provided first, followed by an explanation of expenditure patterns and lodging tax data. Next, formulas needed to estimate economic benefits are presented. Finally, secondary benefit principles are noted.

Tourism often provides greater economic activity in rural communities than anyone expects. Because tourism affects a variety of established sectors (lodging, food service, transportation, etc), it is easy for community leaders to overlook its combined impact. Estimates of direct economic expenditures can be easily calculated for counties that collect lodging taxes. It is also important to focus on the economic multipliers created by the spending of tourism businesses, since that activity ultimately expands the direct benefits of visitor spending.