By: Jim Chadderdon, Discover Klamath Executive Director

The most recent legislative session ended March 3rd. Many new bills were submitted and several received substantial media coverage, including a bill adjusting minimum wage. One bill you may not have heard about was HB 4146C, which increased the State Transient Lodging Tax (TRT) Rate.    

The measure, which was signed into law by Governor Brown April 4th, increases the statewide Transient Lodging Tax from 1.0% to 1.8% after July 1, 2016, and then reduces the tax to 1.5% after July 1, 2020.  The 80% tax increase will raise approximately $27.4 million in tax revenue.  The bill requires the Oregon Tourism Commission, dba Travel Oregon, to spend 20% of the tax revenue to implement a new Regional Cooperative Tourism Program (RCTP) and another 10% be used for a competitive grant program that includes tourism-related facilities or tourism-generating events.
 
The RCTP program will favorably affect southern Oregon as Travel Southern Oregon (TSO) – a seven county marketing cooperative which includes Klamath County – will realize and manage incremental revenue windfalls of approximately $500K annually. These new dollars will be managed by TSO’s Board of Directors, of which Klamath County Tourism officials are included.   

The original proposal was to increase the tax 100% from 1% to 2%. The decrease to 1.8%, along with the mandate that the state allocate 20% of the money to regional tourism programs and 10% to competitive grant programs, was made by the Legislature in response to strong criticism from (mostly rural) tourism officials, as well as some lodging owners, who did not believe their areas would benefit from the increased tax revenues.   

HB 4146C allows Travel Oregon to spend money on “tourism programs” which would include subsidizing costs of events, such as the 2021 World Track and Field Championships in Eugene.  Track Town USA was a major sponsor of the bill as it hopes to receive a significant amount over the next five years to help cover event costs in 2021.     

HB 4146C also includes a requirement that a work group lead by the Legislative Revenue Office study polices related to distribution of revenues for the regional cooperative tourism program.  Issues to be reviewed include: establishment of regional tourism boundaries, and, distribution of state tax revenues within each region. 

Klamath County’s lodging tax currently stands at 9.0%, which is about middle of the pack around the state. 8.0% remains in the county and 1.0% is paid to the Oregon Tourism Commission, dba Travel Oregon, for statewide promotion. With the new law going into effect July 1st, the 1.0% will become 1.8% for all counties statewide.  
 
Oregon’s tax on lodging is the 2nd lowest in the country.  At just 1.0%, Oregon ranks 47th in the nation. Connecticut is 1st (highest) at 15%. Being so low, it is unlikely tourism visitation will be adversely affected by the increase from 1.0% to 1.8%, since out of area travelers are used to higher rates elsewhere. Plus, Oregon’s lack of a general sales tax makes Oregon an attractive travel and shopping destination.