Will There Be a “Comic-Con Tax” on San Diego Visitors?

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201202210232 Will There Be a “Comic Con Tax” on San Diego Visitors?

by Bruce Lidl

According to the organizers themselves, the key factor in Comic Con’s 2010 decision to spurn suitors from  Anaheim and Los Angeles, and to stay in San Diego (at least through 2015) was the stated commitment of local hotels to not gouge future visiting Con-goers with jacked up rates during the Con.  It was, however, the promise by local politicians and hoteliers to pursue an ambitious expansion of the San Diego convention center (already bursting at the seams from the 125,000 capacity of the Con) that was expected to lock down Comic Con in San Diego long term.

A crucial portion of the expansion plan has been the creative way it is to be funded.  No one believed the plan could garner a two-thirds majority in a local election, as California law requires.  Instead, the plan’s supporters came up with the idea of a specially worded property tax just on hotels, to be put into action as a form of occupancy tax, adding a 3% charge for hotels closest to the convention center, 2% a little farther out (Mission Valley for example) and 1% for the rest of San Diego county.  Over thirty years the new tax would be expected to raise on average $36 million per year, and would cover the bulk of the convention center expansion plan’s projected cost of $520 million.  Instead of San Diego voters having a direct say on the matter, San Diego hoteliers themselves will vote on April 23rd, with a two-thirds super-majority required in that vote as well.

Almost from the moment the plan was announced it ran into criticism, and as we reported previously, other groups looking for construction money, like the San Diego Chargers, have openly tried to scheme their way into some of the revenue.  More difficult however, may be the rumblings, some which comes from local organized labor, that the ingenuity necessary to evade a public vote on increasing city revenue may be simply too creative, and would be vulnerable to legal challenge.  To underscore just how vulnerable the plan may be, San Diego’s city attorney, Jan Goldsmith recently admitted that the financing scheme faces “constitutional questions” and that he cannot vouch for its ultimate legality.

While the ultimate fates of the tax and the convention center expansion itself remain very much up in the air, the upcoming Wonder Con, to be held in March 16-18 in Anaheim instead of its usual San Francisco location, will offer an interesting vision of what might have been.  Organized by the San Diego Comic Con staff, the 2012 Wonder Con in Anaheim might also demonstrate a viable option for the big daddy Comic Con itself should the local expansion plans fall through.  It will be quite telling to see how successful the show is this year, not just to see how many previous Wonder Con goers make the trek down south, but also how useful Anaheim could be for the future.

Of course if San Diego’s plan does get put into effect, how will travelers respond to a “Comic Con tax” on their hotel bills?  The current San Diego occupancy tax is 10.5%, so they may not notice, especially if they stay outside of downtown.  And for comparison sake, New York City’s equivalent tax is 14.75%, plus $3.50 per night.  But is taxing tourists for local infrastructure fair in general?  A kind of taxation without representation?  A does government spending on convention centers even make sense any more from an economic standpoint?  Would a new tax end up doing exactly what the Con organizers fought against in the first place, that is, gouge visitors unfairly?

Comments

  1. Do vendors at the convention pay state sales tax on everything they sell? Also, do artists on artist alley charge sales tax for commissions? Every con I’ve ever been to seems to be a sales-tax free environment.

  2. And maybe this experiment will finally put to bed the idea that you can just move SDCC to Anaheim and it’ll be more or less the same experience.

    As for the conventionjacking of hotel prices, I would be shocked if it actually stops, no matter what scheme gets put into place. Next you’ll tell me that they’ll cap daily parking to just ten bucks during SDCC, too.

  3. jaroslav hasek says:

    while the CCI people may have said that they didn’t want san diego locals “gouge” comic-con attendees, what they meant is they didn’t want the hotels subtracting funds from attendees’ spending accounts that otherwise would go to CCI or exhibitors.

    whats fair is that people enjoying the comic con pay for it. if a hotel tax is not politically feasible, just have the hotels kick in money from their budgets. or have CCI rent out huge blocks of rooms ad rent them to ticket holders and skim off of that revenue. or just start fresh and move to anaheim, or somewhere else that already has the necessary infrastructure paid for already.

  4. Torsten Adair says:

    “Anaheim Comic-Con” and “Los Angeles Comic-Con” have been registered as trademarks by Comic-Con International.

    The Anaheim convention gives CCI an opportunity to test the LA market. Will Hollywood show up? Will fans from the Bay Area make the trek down? Will fans from down south travel to LA?

    If it is successful (which I would judge as 75% attendance from WonderCon 2010), then CCI can launch a fourth show in LA. They’ll know what to expect in a second year, have some experience with the convention center, and can scale up or down accordingly.

    I suspect they will continue in Anaheim, given the size of the center, the number of hotels nearby for satellite programming, and the accessibility and demographics of Orange County and Los Angeles.

    Metrolink is nearby, along with Amtrak, so it is accessible from San Diego and Los Angeles. (Although it’s a bit of a hike from the train station to Disneyland, as the station is located on the other side of the baseball stadium.)

  5. Ray Feighery says:

    No problem paying the 3% It’s toruists who will be using the facility so why not.

    Also, to answer the previous question, yes vendors have to declare thier earnings and pay sales tax…do some cheat on cash sales? Sure…but they pay tax.

  6. Rob Most Dealers put sales tax in the price and just pay the bill when they get home from it. You see many small signs saying Sales Tax included or without Sales Tax around the show. You don’t have to report the sales to pay the tax until after the show.

  7. @Rick Rottman: SDCC requires all exhibitors to apply for a California tax permit. It is up to the exhibitor to decide how to collect tax on sales, but once you get a permit the state BOE is going to expect them to pay tax on their sales within 45-60 days after the show, if I recall. SDCC doesn’t have to do anything other than make sure vendors have permits. I’m not sure if people in artist alley count as vendors, though.

    There are of course ways around it. When you apply for the permit, it asks for an estimate on sales, so you can always low-ball that number, and then after the show lie about how well you did, and pay little tax. This, of course, is very very WRONG. Shame on you, shame shame. But definitely file the report as they’ll fine you for forgetting.

  8. I love SDCC. I would pay anything for the experience.

  9. Secret Identity says:

    Other large conventions have passed San Diego by because the center isn’t large enough. So while some may call it a ComicCon tax, the truth is it will benefit a lot of other conventions and the city the most.

  10. Bardo Ambriz says:

    Regarding Anaheim, transportation is abundant and the area is generally safe at various times of day. Regarding San Diego, I don’t like the “Comic-Con tax” but I understand it has to be done in order to expand the convention center in order to keep both Comic-Con as well as other convention centers around. I live in LA but I love going to San Diego to experience the area as well. Time will tell after WonderCon

  11. ~chris says:

    > No problem paying the 3% It’s toruists who will be using the facility so why not.

    It’s an additional 3% on top of the 10.5% transient occupancy tax and the 2% Tourism Marketing District “assessment” (for hotels with at least 70 rooms). All those “small” tax increases add up to real money.

    Tourists from out of town don’t get to vote on the tax. This is the “kind of taxation without representation mentioned” in the article.

    The tax is applied to all San Diego tourists, not just the ones that visit the convention center.

    Advertised hotel rates do not include taxes. Only at the end of the reservation process is the total, including taxes, shown. Didn’t the airlines get a lot of flack for not revealing the total price up front?

  12. ~chris says:

    …“kind of taxation without representation” mentioned…

  13. Patrick McEvoy says:

    I’m not sure why this is only being framed as a “comic-con” tax. Obviously the convention center is used for other purposes, and also it’s clear that the bigger the convention center, the more world-class conventions they can get. Also, it seems that a tax on visitors using the facilities (and I’d guess most guests in the nearby hotels are doing that) is the best way to do it.

    Of course, my personal preference is that they do anything possible to keep SDCC in SD. Or, barring that, hopefully anywhere other than Anaheim, which is just an awful convention area.

  14. Ron Thibodeau says:

    All you need to do is call the hotel up directly, and ask them how much everything will be for your stay, including taxes.

    Or find out what the tax rate is of the city/state BEFORE you book.

    It’s really not that difficult an issue to resolve.

  15. ~chris says:

    “All you need to do is call the hotel up directly, and ask them how much everything will be for your stay, including taxes.”

    I agree. But it’s a bit hypocritical for the government to make a fuss and then force airlines to disclose their fees up front, but doesn’t bat an eye when the consumer has to make a call or click through multiple webpages to find out what the government’s tax/fee/assessment is.

  16. Pablo says:

    No more taxes already! It’s expensive enough just to go to Comic Con. I’ve been to the Anaheim Convention Center for WizardWorld and the D23 (Disney) Expo. Those fit perfectly for those smaller events. I don’t think Comic Con would fit at all at the Anaheim Convention Center because of all of the vendors, exhibitors, artists and writers, celebrities, gaming, panels, fan clubs, and fans. Traffic and the crowds would be an even bigger nightmare at the convention center because it is so close to Disneyland, and the convention doesn’t feel as big as San Diego’s convention. Forget LA, Vegas, and Anaheim, Comic Con only works in San Diego. Period. End of story! Either have Anaheim be WonderCon’s new home, or have WizardWorld return to Anaheim to stay. I will be going to WonderCon, as it may be the only good reason to go to the Anaheim Convention this year. With no WizardWorld, no D23 Expo, and no BlizzCon, WonderCon will be the game in town!

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