Transient Lodging Tax in Oregon
Understanding the Transient Lodging Tax (TLT)
In 2003, HB 2267 established Travel Oregon as a semi-independent state agency and created a state transient lodging tax, imposed at a rate of 1% to provide funds for the promotion of Oregon’s tourism programs. HB 4146 (2016) increased the transient lodging tax rate from 1% to 1.8% for the period of July 1, 2016-July 1, 2020. On July 1, 2020, the rate decreased to 1.5%. ORS 320.335 authorizes the Department of Revenue (DOR) to collect and retain up to 2% of tax collected and remitted (net of a 5% fee retained by the transient lodging tax collector) for administrative expenses. DOR reports taxes remitted and processed monthly by region and distributes the balance to the OTC monthly. In addition to the transient lodging tax, OTC also receives revenues from the Governor’s Conference on Tourism attendee registration and sponsorship fees, various agency workshop registration fees, interest income, grants and the Welcome Center Brochure program.
Starting with the 2017-19 biennium, ORS 284.131, as modified by HB 4146 (2016), stipulates that OTC utilizes transient lodging tax moneys as follows:
- At least 65% must be used to fund state tourism programs. HB 4146 (2016) removes the provisions that funds can only be used for marketing programs.
- 10% must be used for a competitive grant program which may include tourism-related facilities and tourism-generating events, including sporting events.
- 20% must be used to implement a Regional Cooperative Tourism Program (RCTP) using a regional allocation formula that distributes revenue to regions in proportion to the amount of lodging tax revenues collected in each region.
To provide some predictability to the regional entities designated to develop and execute plans for use of state lodging tax dollars, OTC determines RCTP awards based on prior calendar year transient lodging tax receipts and disburses the state lodging tax upon approval of the regional plans, usually in July of the following fiscal year.