A visitor levy is being suggested to help councils pay for infrastructure tourists use.
Councils say New Zealand's tourism reputation could be damaged unless the government helps them get more money to pay for infrastructure.
The Councils said they did not get enough direct revenue from visitors to upgrade the roads and pipelines needed to cope with the tourism boom.
Local Government New Zealand is teaming up with tourism agencies and Air New Zealand, to work on a proposal for central government to ease the costs.
Its president, Lawrence Yule, said if towns could not build the infrastructure needed for growth, visitors would eventually turn away.
Mr Yule said a possible outcome could be a visitor levy, or the creation of special economic zones with targeted taxes.