"Destination signs at intersections are solely about telling the motorist the direction and location of a town, using the minimum amount of text."
NZTA had met the Te Aroha Business Association to explain its position which included the hot springs being further than 5km away from where they wanted the sign.
But business association president Shaun O'Neill said there was no good reason not to put up the sign.
Mr O'Neill said special tourist signs were given to major tourist destinations and Te Aroha met this criterion because of its historic spa site. "I really think they just haven't given it due consideration ..."
In the meantime, NZTA has suggested the business association work with the local council to look for other signage opportunities away from the state highway.
Matamata-Piako Mayor Hugh Vercoe said the council supported the initial application and any promotional signs for Te Aroha would be a good thing if the rules allowed it.