The Queenstown Lakes District Council has agreed to support a $70,000 referendum to test the idea of a visitor levy.
It could bring in a much-needed financial boost to the region desperately in need of upgraded infrastructure to cope with visitor numbers.
"The new levy will be unique to Queenstown Lakes District given the challenges we face as the number one destination for tourism in Aotearoa New Zealand," Mayor Jim Boult said.
For every one person living in the southern adventure capital, there are 34 international visitors. It's putting the town under pressure, as local residents are the only ones paying.
"We desperately need a new way of funding our infrastructure that shares the cost with everyone using our roads, our water supply, our waste water and more," Mayor Boult said.
A visitor tax is common internationally in other tourist hotspots, including Venice. There's also a levy charged for visitors to Milford Sound and Stewart Island.
Tourists seem to be on board with the idea of a levy.
"I guess it's so beautiful that I wouldn't mind, depending on what the amount was," one man told Newshub.
"Depends on what the tourist levy is, but if the place has a lot of tourists I think that might actually be a good thing," a woman said.
How the tax would be collected hasn't yet been decided, but it's expected both overseas tourists and Kiwi holidaymakers would have to pay.
If voted in, a visitor levy could be in place by 2021.