A Government minister has suggested a £1-a-night tax on holidaymakers that critics say would potentially damage the region's tourism industry.
The Local Government Minister, Bristol MP Stephen Williams, outlined a "tourism tax" to Liberal Democrat activists as a way for hard-pressed councils to boost their coffers.
The idea emerged as he spoke at a fringe event during the party's spring conference in York.
The policy – which has not been adopted by either the Government or his party – echoes a plan floated by a Cornwall Council officer two years ago to make the most of the area's swelling summer population.
Mr Williams gave the example of a "genuine bedroom tax" when advocating giving local authorities more powers to generate income.
He said: "You could have a genuine bedroom tax on hotels, for instance, in major tourist areas – seaside towns and cities like York. The city council would have done very well out of us this week if there was a £1 bedroom tax on every room. That's where I want us to get to – with local government being able to raise more and more of its own money.
"At the moment any new tax would require House of Commons approval. What I would like to see – this is just an idea, not party policy or anything yet – is that possibly why shouldn't we generally provide that local government can set new taxes, possibly across a range of areas, property or income, within given parameters, and then go from there?
"I personally would be in favour of local authorities being able to charge (a bedroom tax). It's an idea that perhaps we'll take up. But the bedroom tax isn't the only one that I'm sure people will come forward with."
Malcolm Bell, head of tourism board Visit Cornwall, said: "The industry's response would be that the visitor economy is already one of the highest taxed in the world – Cornwall already pays something like £600 million a year to the Treasury. Some would argue they should have £1-a-night back.
"How do you collect it? Would it cost more than a local council would collect? So there is an issue with complexity. This already happens to some extent with Business Improvement Districts – where businesses volunteer to pay but the money is hypothecated. Would that money go back to visitor services?"
In 2011, Tom Flanagan, Cornwall Council's corporate director for the economy, told a select committee of MPs that the fee could raise £26 million a year which could improve transport and facilities – benefiting tourists.
Many point out that tourists, who spend tens of millions of pounds each year in the West Country, are already burdened by high car parking charges and rates of VAT much higher than in Europe.