Tigard will join neighbors like Beaverton, Lake Oswego and Portland in levying its own tax on overnight accommodations.
The 2.5 percent transient lodging tax, which stacks with Washington County's 9 percent tax rate and Oregon's 1.8 percent rate, was unanimously approved by the five members of the Tigard City Council on Tuesday, Aug. 8.
Often called a "hotel tax," the transient lodging tax is levied on overnight stays. Tigard adopting its own local tax will raise the total amount of the tax to 13.3 percent.
Toby LaFrance, Tigard's finance director, noted that 13.3 percent total rate is less than other cities in the area. In Portland, the total rate is 15.3 percent; in Beaverton, it is 14.8 percent. Hillsboro and Lake Oswego both have 13.8 percent total transient lodging tax rates.
The tax proposal was backed by the Tigard Chamber of Commerce and the Tigard Downtown Alliance. Seventy percent or more of revenues raised by a transient lodging tax must, by law, go toward "tourism-related purposes," something both business groups favor.
Chamber Chief Executive Officer Debi Mollahan told the council, "We view this TLT as a way for the city to improve and build tourism-centric amenities … and help really stimulate the local economy."
Steve D'Angelo, president of the Tigard Downtown Alliance, is a prominent booster of increased tourism to downtown Tigard.
"Anything that drives tourism-centric opportunities for economic opportunities for my business is important," said D'Angelo, who owns a catering and event planning company. "And I can only suggest that bringing more tourists to our downtown community is also good for our Tigard Downtown Alliance."
Tigard got some pushback on the proposal from the Oregon Restaurant & Lodging Association. Its director of government affairs, Greg Astley, asked the council to hold off on adopting the local tax until it got more feedback from hoteliers.
"We would hope that you take the time to just get a little bit more input on this," Astley said.
The association argues that transient lodging taxes can depress occupancy of the hotels, inns and other businesses they represent.
"Although many visitors won't look at a room tax of two and a half percent when they're making their hotel decisions, larger room blocks will," Astley said. "I've been with Little League teams who have traveled all across the state, and if you've got 15 kids and their families and you're looking at staying somewhere for a week, that can make a difference on which hotel you might want to stay at, so I would hope that you would consider that as well."
City Councilor Marc Woodard did not find that argument convincing.
"Tigard is still very competitive, and to tell you the truth, if there was a big block of people wanting rooms … the first place I would go is still Tigard," Woodard said. "I think we did set ourselves up to be competitive."
LaFrance said the city has been conducting outreach to the hotel industry for several months, but it has received virtually no feedback outside of a meeting he and Mayor John L. Cook held with the general manager of the Embassy Suites by Hilton at Washington Square.
"It is disappointing that people don't come forward, but it's not surprising, considering other municipalities … not only did they not outreach, but the cities that did do the outreach, nobody came forward either," Cook said.
Mollahan said it is key that Tigard is keeping its total tax rate competitive with neighbors even as it imposes its own local transient lodging tax.
"Of note, Embassy Suites is the largest hotel by far in Washington County, so keeping them at a competitive advantage I think is great," Mollahan said.
LaFrance estimated the 2.5 percent tax will generate about $625,000 in additional revenue per year for the City of Tigard.
The local transient lodging tax will become effective next month.
By Mark Miller
Assistant Editor, The Times
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