Time county dealt itself in on the lodging tax bounty?
Since coming into vogue in the 1970s, transient lodging taxes have become almost universal in the U.S. and more the rule than exception elsewhere in the world — particularly in countries with at least some semblance of an international tourism industry.
But you’d think it represented a Machiavellian new way to pillage the wallet of the traveling public, to hear opponents of a county lodging tax here tell it.
The District of Columbia is joined by 48 states, all but California and Alaska, in imposing a lodging tax. They range from Oregon’s 1.5% to Connecticut’s 15%, and average about 6.25%.
What’s more, 34 states also impose a sales tax on motel rooms, though Connecticut, mercifully, is not one of them. It ranges from 2.9% in Colorado to 7% in Indiana, Mississippi, Rhode Island and Tennessee, and runs at least 5% in 23 of them.
Lodging taxes are also assessed by cities and counties throughout the U.S., and commonly their counterparts around the world as well.
In Oregon, 16 of 36 counties levy lodging taxes. The roster includes four of our neighboring counties — Clackamas, Lincoln, Tillamook and Washington — as well as several others at least as rural as ours — Baker, Grant, Jefferson, Klamath, Lake, Union and Wallowa.
In addition, more than 120 Oregon cities tax lodging in their own right, including McMinnville, Newberg and Dundee in Yamhill County. Newberg’s dates back to the 1990s, in fact.
Lodging taxes have become so ubiquitous we doubt the typical traveler pays any heed. If they catch his eye at all, it’s most likely because an airport fee has been tacked on as well — common in major airline hubs.
With Oregon levying the lowest lodging tax in the country, and no sales tax at all, travelers to our fair land are actually getting a deal in comparison to many other places they might visit. That’s true even for places in the Deep South and desert Southwest that aren’t typically known for tourism.
It’s also worth noting that our local visitor ranks include a well-heeled wine country contingent typically spending hundreds a night on fine dining and luxury lodging. It neither needs nor expects a local lodging tax break.
According to Hospitality Valuation Services, a global Goliath with almost 50 offices in North American alone:
“Hotel owners are often willing to cooperate with local governments to impose lodging fees dedicated to tourism promotion and convention center construction. For hotel owners, tourist-oriented public facilities and advertising serve as drivers of room demand” — drivers they could not afford on their own.
The national big five on the city level — New York, Orlando, Los Angeles, San Diego and Washington, D.C. — each collect more than a quarter of a billion dollars a year in transient lodging taxes. They are joined at that level by five states, Hawaii leading the way with an annual take exceeding $1 billion on its own.
By contrast, Oregon collects a mere $36 million annually. Yamhill County’s projected annual take, based on a tax of 2% in the three cities with existing taxes and 9% elsewhere, is an even more modest $1.7 million.
However, $1.7 million would go a long way here for a county desperately looking for a way to better develop, maintain and manage a park system much longer on potential than reality on the ground today. Given the local scale of things, that money could be put to good use on the very kind of asset that attracts tourists in the first place.
Those figures represent an initial recommendation proposed by County Commissioner Bubba King last month, promoting an initiative he discussed often while on the campaign trail last year.
It is the start of a discussion (actually, a restart of one) that must be fully explored and every option considered and scrutinized. State laws provide much leeway in how lodging taxes are enacted, and there are many paths the county could pursue.
It also must have open dialogue with those city agencies if it seeks to proceed with city overlay TLTs. We’ve already seen objection of that idea from Newberg (see story in Wednesday’s e-edition or the Weekly News Roundup in this issue).
Even without a tax overlay on cities, however, there is a bounty of TLT dollars to be captured in rural wine country.
King’s estimates show a $12.26 million annual lodging base for that area, which itself would generate more than $1 million in TLT revenue. Take a few minutes to review lodging options in rural parts of the area on sites like AirBnB and VRBO. Many of these are extravagant structures owned by out-of-area millionaires and even billionaires. We doubt their clientele would balk at $25-$50 extra a night during a trip they're likely spending thousands on.
We hope our county commissioners will, at the very least, give it a good look. We hope they will remember, as they take that look, that this is a tax that puts money into the pockets of local constituents instead of pulling it out.
It’s the best kind of tax you can ever assess — a tax on the other guy. And in this case, the other guy is coming here to tap assets that cost us a lot of money to develop and maintain, so that seems only fair.



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