Deputy mayor of York and North Yorkshire Peter Kilbane believes a tourist tax would benefit the region.
He explained York had some of the best heritage assets in the world, which residents were funding the upkeep of through their council tax.
“Bringing in a tourist levy will help pay for that upkeep, which will in turn attract more people,” Kilbane said.
He added the revenue would also be spent on sustainable transport to move visitors into the city but it would be subject to consultation with all stakeholders.
North Yorkshire Council had a different view, however, and in a letter to the government, councillor Mark Crane raised concerns.
He explained that “staycationers” made up most of the North Yorkshire visitor trade and a tourism tax could drive up costs for domestic holidays.
“Across the York and North Yorkshire Combined Authority, business sentiment is divided,” Crane said in a consultation response letter, which has been approved by the council.
“In York, views appear to be split, reflecting moderate support in an urban context.
“In rural North Yorkshire, opposition is strong and widespread among accommodation providers, who are particularly concerned about price sensitivity in our domestic led market.
“This disparity must be addressed through inclusive decision making that safeguards rural economies and does not allow urban priorities to dominate.”