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Protecting Statewide Lodging Tax Legislation
 
Background
HB 2267 in the 2003 Legislative Session was designed to raise revenue for the promotion of tourism in Oregon. The bill instituted a 1% statewide lodging tax on all lodging properties in Oregon. This money is dedicated to the promotion of tourism through the Oregon Tourism Commission and TravelOregon, the state's travel and tourism agency. The bill requires any local government with a lodging tax in place to determine what percentage was being used for tourism promotion when the bill became law and maintain at least that level in the future. The formula is based on percentage of budget, not the dollar amount dedicated and the percentage used for tourism is not allowed to decrease. The bill also requires any local government that institutes a new local lodging tax or increases an existing tax in the future to use at least 70% of the new revenue for tourism promotion. No more than 30% of new lodging tax revenue can be used for general fund or other non-tourism functions.

The bill defined "tourism promotion" activities under which the local governments may spend local lodging tax dollars.

In 2005 OLA introduced legislation that included vacation home rentals as "lodging" for purposes of this statewide tax.
 
Issue
Some local governments continue to oppose the language in statute that protects new local lodging taxes and dedicates them for tourism promotion uses. OLA and ORA needs to ensure that the statute remains in place as written. Additionally, some local governments have looked to use local tax dollars for "tourism promotion" activities that we believe do not fall under the statutory definitions. Finally, there is always the risk of other interested parties trying to reallocate the statewide tax revenue to fund programs unrelated to tourism promotion and the Oregon Tourism Commission.
 
ORA Position
The Oregon Restaurant Association (ORA) and Oregon Lodging Association (OLA) support the current legislation and oppose any changes. Both Associations believe in protecting the dedicated tourism funds to ensure they continue to be allocated to tourism promotion purposes at the state and local level with the intended end result of increasing length or stay and increasing visitor spending at local businesses.
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