Letting tourists off easy

Chuck Sheketoff

One of the most compelling arguments for a sales tax is that Oregon can capture funds from out-of-state tourists. The logic is much like that which says the Monty Python tax is the best tax: Oregon would get revenues for schools, health care and other important public structures and non-Oregonians would be footing the bill.

Few may be aware that we already have a sales tax in Oregon that targets tourists: state and local transient lodging taxes. Unfortunately, large retailers of online reservations (think Expedia, Orbitz, Priceline and the like) routinely shortchange state and local governments (PDF) by paying the tax based on their wholesale rate with the lodging establishments, not the retail rate that’s charged to the out-of-state tourists coming to Oregon.

HB 2656 (PDF) would "enhance the administration and enforcement of existing law" by making it perfectly clear that the transient lodging tax applies to the retail rate. That would mean more money for state and local governments and more money to promote tourism. And because it is only making current law more clear, the bill requires only a simple majority to become law. Adding the clarity should be an easy lift for the legislature because it adds dollars to promoting Oregon's tourism-related businesses.

Yet the bill has only had a hearing, not a "work session." Some very large out-of-state corporations seem to have blocked, for now, any action.

Next time you hear legislators or the business lobby claim to be sales tax proponents who want tourists to pay a fair share, ask them what they did to move HB 2656 (PDF) to the floor.

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Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.

By Chuck Sheketoff May 01, 2013 Posted in open discussion.