City council favors city transient room tax

Published 12:00 pm Tuesday, April 13, 2021

The city of John Day is proposing to establish its own transient room tax.

The new tax for motel and RV park guests, which would be levied on top of the state and county rates, would only apply in the city limits.

The meeting agenda states that, to pursue this approach, the city would need to pass an ordinance, which includes establishing a local TRT rate, and enter into the agreement with the Oregon Department of Revenue.

The department would then administer the tax and handle the city’s tax by reviewing the ordinance, collecting the tax, providing financial auditing and then remitting the tax directly to the city.

Grant County’s transient room tax ordinance calls for the collection of 8% of what hotel and RV park operators charge for one night, paid by the temporary visitor. The tax administration office keeps a small fee, and the remaining amount is given to the Grant County Chamber of Commerce.

“The purpose of this tax is to raise revenues to be used for tourism promotion and tourism related facilities in the county,” according to Ordinance No. 2012-04.

The current transient rates in the county include a 1.5% state rate and the 8% county rate.

John Day City Manager Nick Green said he wouldn’t recommend less than a 3% rate. He said there aren’t enough rooms and the city’s occupancy rate is too low for a lower tax rate to be effective.

Malin Patel, who owns the Best Western and America’s Best Value in John Day, said he feels this is a regressive tax to the lodging businesses in John Day.

“Someone wants to spend $100 on a room, and they’re looking at a flat budget of $100,” Patel said. “By adding a 1.5% tax, that’s taking more money from our customers.”

Patel asked why the city is not pursuing a share of the county’s tax that’s already collected.

Councilor Dave Holland said he is not convinced that a $1.50 tax on a $100 room is significant enough for somebody to avoid lodging at a hotel. He added that the city council tried to work with the chamber and county to get a piece of the currently collected taxes but to no success.

Green said the additional funds from the tax could be used for tourism in John Day and help organize events to attract tourist to the area.

Grant County Fairgrounds Manager Mindy Winegar said she would have to possibly raise her rates to accommodate for the city’s transient room tax.

Holland said it’s not the businesses being taxed but the out-of-town guests.

“In the long run, we are trying to increase tourism to our city, and it gives us a way to have an income from the people who want to visit here and not from our local residents,” Councilor Shannon Adair said. “It’s an outside source of revenue that we can use.”

Five city council members said they were in favor implementing a city tax, while two said they were against it.