'Hotel tax' takes effect in Forest Grove
The municipal government of Forest Grove is now taxing overnight stays within the city.
The transient lodging tax, more commonly called a "hotel tax" — although it applies to businesses like bed-and-breakfasts and even person-to-person rentals like Airbnbs as well — took effect Monday, Jan. 1, after being approved by the Forest Grove City Council in November.
The 2.5 percent city rate stacks with Washington County's 9 percent tax rate and Oregon's 1.8 percent rate, so the total tax rate on overnight stays in Forest Grove is now 13.3 percent.
At least 70 percent of revenues raised by the transient lodging tax must go toward "tourism-related purposes," and city officials said last fall that in Forest Grove, the entirety of those revenues will.
Airbnb announced it has amended its existing agreement with Washington County to allow it to collect and remit Forest Grove's transient lodging tax. The company has been handling tax collections from Airbnb for the county and its 9 percent tax since July 2016.
Laura Spanjian, Airbnb's Northwest public policy director, said in a statement, "Airbnb hosts love to share their community with visitors to Forest Grove, from the parks and trails to wineries and galleries. We are excited to be able to include the city in our tax agreement with Washington County, making it easier for our community to collect and remit the appropriate taxes and we look forward to working together to draw even more visitors to the area."
According to Airbnb, the typical Airbnb host in Forest Grove makes $6,400 per year by renting out space.
Guests at Airbnbs in Forest Grove will be charged the county and city taxes on their bill. Airbnb then remits those collected taxes to the county and city.
"Tourism revenues are important to our city, and we appreciate this partnership with the county and Airbnb because it makes the entire process easier for all involved," said Jeff King, Forest Grove's economic development director, in the statement issued by Airbnb.
King told the News-Times that the city estimates it will receive about $100,000 per year from the 2.5 percent transient lodging tax, supporting its efforts to promote tourism.
Forest Grove joins Beaverton, Hillsboro and Tigard among Washington County cities that have adopted their own transient lodging taxes. Its 2.5 percent city rate is equal to that of Tigard and lower than the rates in Beaverton and Hillsboro.
By Mark Miller
Editor, Forest Grove News-Times
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