Oregon’s legislature has broadened Oregon’s tax on short-term room rentals (also called the transient lodging tax). The new law, Enrolled House Bill (EHB) 4120, expands the scope of persons who must collect and remit the tax and file returns.
Background and Prior Law
EHB 4120 comes after a 2013 change in the law meant to treat third-party intermediaries on par with traditional hotels and motels. Apparently, the legislature now believes the earlier change did not go far enough—so in comes the amendment.
The old law and new law both require intermediaries to collect the tax along with short-term rental providers. But the old law defined intermediaries somewhat narrowly as those who simply facilitate and charge for short-term rental sales. While some intermediaries collected and paid the tax under this framework, that approach was not consistent across the market.
For example, some cities and counties reached voluntary agreements with certain intermediary companies to collect the tax; others had to rely on property owners’ individual compliance. Some intermediary companies took the position that the tax did not apply to them.
Washington lawmakers have decided that all types of lodging in King County should participate in funding the Washington State Convention Center. Since the advent of King County’s convention center tax in 1982, hotels and motels with 60 or more units have had to collect from guests not only the retail sales tax, but also the convention center tax. In Seattle, the convention center tax is 7 percent; in the rest of King County it is 2.8%. As smaller lodging facilities and short-term rentals have increased in popularity, it has become clear that exempting them from the convention center tax has been giving them an unfair basis for competing against larger facilities.
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.