New $4,000 “Explore America” credit could be coming

I mentioned yesterday about a new tax credit that could be created in order to incentivize travelers to get out and take a vacation in order to pump money back into the travel industry.

Well now we have more details about this potential new initiative.

The program would be called “Explore America” and it would provide up to a $4,000 tourism tax credit.

So basically you could subtract up to $4,000 from the amount of taxes owed just by going on your annual family vacation (it’s not clear yet if this would be a refundable or nonrefundable perk).

The new measure would cover as much as 50% of the travel expenses for a household up to that maximum $4,000 limit.

These expenses would include certain travel expenses over $50 including things like “meals, lodging, recreation, transportation, amusement or entertainment, business meetings or events, and gasoline.”

It would be active for expenses made through the end of December 2021 and would be intended to “encourage domestic business and leisure travelers to travel within a specified time frame, similar to what was done through the homebuyer tax credit in the wake of the housing crisis.”

There’s no question that the tourism industry has been decimated by the coronavirus. In fact, their job loss has accounted for almost 40% of the 20+ million jobs lost in the US in April.

Those are pretty absurd numbers and just underscore why a tax credit like this would be a great idea.

But in order for something like this to be a good idea, the timing is crucial.

I just wrote about how Arizona saw its worst week since the pandemic began this past week with cases jumping over 50%.

Based on reports I’ve seen, I think other states are in the same boat as well.

I think Congress has to be very careful about incentivizing herds of people to travel prematurely.

I like that this bill would run through the end of 2021 but I’m more concerned about when the tax credit will begin.

It’s starting to look like incentivizing people to take vacations this summer is probably not a good idea based on the fact that the spread does not seem to be under control in many locations.

Still, it is encouraging to see something like this getting talked about and I think it would be a great move that could benefit the travel industry in a pretty big way.

Other countries like Japan and Switzerland are also implementing similar measures so this could end up being a worldwide movement.



  1. It sounds an awful lot like trickle down economics and a giveaway to people that don’t need it.

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