Introduction
A policy is a written guideline provided to taxpayers to explain procedures or provide guidance in particular fact situations.
The terms "City" or "County", as used in policy examples, shall include and may be substituted for the other jurisdiction, unless the policy only interprets a code section unique to one jurisdiction.
All official policies adopted by the Revenue Division ("Division") are reviewed internally before formal adoption by signature of the Program Manager.
Definition of Taxable Rent Policy
Portland City Code 6.04.010 M. states: “Rent” means the consideration charged… for the occupancy of space in a hotel…valued in money, goods, labor, credits, property, or other consideration….
Portland City Code Section 6.04.010 J. states: “Occupancy” means the use or possession, or the right to the use or possession for lodging or sleeping purposes….
A taxable rent payment for lodging includes but is not limited to the following:
- Rent payments for transient occupancy.
- Rent payments received from “no show” billings.
- Rent which is a portion of a “package plan”. Please note that “rent” shall be the same charge made for rent of the identical room when it is not a part of a package plan (per Transient Lodgings Tax Law Section 6.04.010 N.).
- Any payment for additional guests.
- Any payment for additional beds (rollaway and/or crib).
- Any payment for pets staying in the same room as the Transient Lodger.
- Any “trade-out” for room rent (defined as a payment for rent received in goods, services or any other valuable consideration).
All above receipts are required to be included as Gross Rents to be reported on line 1 of the Transient Lodgings Tax Quarterly Report. Transient Lodgings Tax is required to be collected on all amounts defined as taxable rent payments. Failure to collect appropriate Transient Lodgings Tax will result in audit assessments for additional tax and interest.
2/20/1997 Terri Williams
Date Program Manager
Adopted: February 20, 1997
De Minimus Rental of Private Home Policy
According to Transient Lodgings Tax Law 6.04.050, no tax shall be imposed on any person who rents a private home, vacation cabin, or like facility from any owner who rents such facilities incidentally to his own use thereof, except Bed and Breakfast Homes and Inns.
For purposes of this Code section, the Division defines incidental as a period of 7 days or less over the course of one calendar year. The 7 days need not be consecutive. Additionally, the Division would not consider the use to be incidental if the facility is advertised or marketed to the general public. This advertising/marketing includes, but is not limited to newspapers, websites, social media and public postings.
Example 1: If an occupant rents a private home from their friend for a period of 7 days or less and the home is not rented out to anyone else over the course of the calendar year, the rental period is exempt from the Transient Lodgings Tax. The owner of the home does not need to register as an operator with the Division.
Example 2: If an occupant rents a facility from their relative for a period of 8 days, but no more than 30 days, the rental period is subject to the Transient Lodgings Tax and the tax must be collected and remitted by the owner/operator.
Example 3: Three occupants rent the same facility at different timeframes throughout the same calendar year.
- Occupant 1 rents the facility for a period of 3 days in February. This is the owner’s first rental of the calendar year.
- Occupant 2 rents the same facility for a period of 3 days in the month of June. The facility has now been rented a total of 6 days.
- Occupant 3 also rents the same facility for a period of 4 days during the month of September. The same facility has now been rented for a period of 10 days in the same calendar year. The facility has now exceeded the incidental period of 7 days allowed for the calendar year.
It is important to note that the owner/operator will be responsible for any Transient Lodgings Tax not collected from Occupant 1 or Occupant 2 if the facility exceeds the 7 day incidental period allowed for the calendar year. If the owner/operator chooses to collect the tax from Occupant 1 and Occupant 2 and it is later determined that the 7 day incidental period was not exceeded, any tax collected must be remitted to the City of Portland.
Facilities that are not used personally by the owner would also not be subject to the Transient Lodgings Tax if their lodging use is incidental as defined above. This would include but not be limited to properties that are purchased by an individual for investment purposes.
Example 4: An individual purchases a rental house. The owner rents the house to Occupant A from January 1, 2014 through January 5, 2014. On January 13, 2008, Occupant B rents the property for the remainder of the calendar year. Although the property is specifically intended for investment purposes and is not for personal use, Transient Lodgings Tax would not be imposed on Occupant A and the owner would not need to register as an operator with the Division. In the case where an owner/operator is in the business of offering Transient Lodgings services (e.g., hotel, motel, bed & breakfast, vacation rental), this example would not apply and the tax must be collected and remitted for the January 1, 2014 through January 5, 2014 occupancy.
2/19/2014 Terri Williams
Date Program Manager
Adopted: 2/19/14
Exemption of Occupants of Government Owned Public Institutions Policy
Portland City Code Section 6.04.050 states: No tax imposed under this Chapter shall be imposed upon…Any occupant in a … government owned and operated public institution. (emphasis added)
The Revenue Division finds that agents who operate certain public institutions act as the governmental unit that owns the public institution. It is not the intent of the Division to deny exemption merely because of the operator. Therefore, if the temporary occupants of such public institutions are lodged for purposes reasonable related to the functions of the public institution and rooms are not rented to the general public, the exemption shall be allowed.
Example 1: AB College owns a residential complex adjacent to AB College. The complex is used to provide temporary housing for individuals whose presence is related to functions of AB College. The temporary occupants generally stay less than 30 days. Rent is paid to a management company that has contracted with AB College to operate the complex. The temporary occupants of the complex will be exempt from the Transient Lodgings Tax so long as their presence in the complex is reasonable related to the functions of AB College (including visiting participants, students, lecturers, professors, etc.). The management company may not rent rooms to members of the general public whose presence at the complex is not related to the functions of AB College.
Example 2: As above, except rooms within the residential complex are available for rent by the general public whose presence at the complex is not related to the functions of AB College. Since the management company may freely compete with other transient lodging operators (hotels, etc.), no exemption is allowed.
9/1/1996 Terri Williams
Date Program Manager
Adopted: 9/1/1996
Monthly Rental Exemption
Only in the following cases will a deduction for tax exempt monthly rentals be allowed:
- When a room in a hotel / motel or short term rental is occupied (or paid for) by the same occupant for more than 30 consecutive calendar days. Occupant may be defined as any individual, company or other group or combination acting as a unit.
- When a room is being paid for on a monthly rental basis (commonly payable in advance, subject to a month to month lease, not subject to refund if the initial occupancy is less than one month, etc.). This would include the month of February, i.e., if an occupant leases a room for the entire month of February, paying a monthly rate, a deduction for monthly rental shall be allowed.
This exemption will be applied incrementally, i.e., one room at a time. In other words, to use the exemption for two rooms you must have two rooms occupied (or paid for) by the same occupant for more than 30 consecutive days.
There is no room for variability within this rule. As occupant must occupy or pay for all rooms listed as exempt for each of at least thirty-one consecutive days.
This rule will not allow unlimited use of tax exempt status for an entity such as an airline or trucking company that simply uses a large number of rooms at a hotel on a variable basis. This amounts to a volume discount, and has never been the intent of this exemption. If an occupant guarantees a minimum number of rooms for a thirty-one consecutive calendar day period, and pays for rooms not occupied during that thirty-one consecutive calendar day period, the hotel will be allowed this deduction or minimum number of rooms guaranteed.
For example, if an occupant rents (or pays for) 10 rooms for 31 consecutive calendar days: 31 days X 10 rooms X room rate is the allowable deduction for 31 days. However, if an occupant rents 2 rooms for 11 days, 18 rooms for 10 days and 10 rooms for 10 days during the same period: 2 rooms X 31 days X room rate is the allowable deduction. In both cases 310 rooms were rented during the same 31 day period, however, the minimum rooms occupied during the 31 consecutive calendar days is the standard by which the exemption is allowed.
Transient Lodgings Tax not collected, due to operator error, is to be remitted to the City by the operator. In addition, tax collected in error that is not refunded to the occupant is also to be remitted to the City by the operator.
February 1990 Terri Williams
Date Program Manager
Adopted: February 1990
Transient Lodging Report Extension Request Policy
The Revenue Division may grant an extension of time to file and pay a monthly or quarterly transient lodging (TL) tax report if the request is made prior to the delinquent date of the return. The extension is granted for one calendar month. The extended due date will be the last day of the month following the month in which the report was originally due. The extended delinquent date will be the day following the extended due date. The provisions of Portland City Code 6.04.070.A will apply if the extended due date falls on a Sunday or legal holiday.
The Division may deny any extension request for any reason, including, but not limited to, the Division's determination of good cause or if the operator has a history of abuse of this privilege.
3/25/2020 Scott Karter
Date Program Manager
Adopted: 8/13/99
Revised: 7/2002, 3/2020
Government Exemption Policy
Portland City Code Section 6.04.050 D. states no tax shall be imposed upon: Any Federal Government employee travelling on official government business, who presents an official Government Exemption Certificate or official travel authorization.
“Federal Government employee” is defined as:
An employee of a federal governmental department, agency or instrumentality. Most federal agencies are well known such as the IRS,FDA,USForestService, Bureau of Indian Affairs (including Indian Health Service employees) and many others. However, federal instrumentalities or entities granted specific exemption from local tax under federal law include the Red Cross, Amtrak and Federal Credit Unions. Employees of the Red Cross, Amtrak and Federal Credit Unions are granted the exemption because federal law grants such exemption or because the U.S. Congress has deemed them federal instrumentalities.
(Note: Tax exemption cards issued by the U.S. State Department may grant exemption from hotel tax--as stated on the tax exemption card. The Revenue Division accepts such exemptions as valid.)
“Federal Government employee” is not defined as:
An employee of a state, county, municipal or tribal government. There is no exemption under the Transient Lodgings Tax Law for such employees. Additionally, no exemption may be granted to federal contractors, as they are not employees of the federal government.
“…official Government Exemption Certificate or official travel authorization” shall include:
Federal agency exemption certificates, federal agency letterhead requests for exemption (stating employee name(s), date(s) of stay and confirmation the stay is for official government purposes), City of Portland Government Exemption Certificate and official travel orders issued by a federal agency. A business card with a federal logo will also be accepted provided the federal employee supplies contact information for their direct supervisor.
Direct Bills and Constitutional Supremacy
The Comptroller General of the United States has ruled that direct payments made by the federal government to an entity to directly purchase goods or services may be tax exempt. The Comptroller General has also ruled consistently that indirect payments (including use of the Individually Billed government issued credit card or other reimbursed payments) are not tax exempt. Therefore, the Revenue Division will only allow exemption for direct bills where the federal government is the direct orderer of such services and the federal government is the direct payer of such services. This exemption also applies to federal employees making payment with a Centrally Billed government issued credit card. No exemption will be allowed for indirect payments (such as payments to an intervening contractor who brokers services under federal contract) unless made directly by the actual federal employee to a hotel and an official Government Exemption Certificate or official travel authorization is also presented.
12/19/2013 Terri Williams
Date Program Manager
Adopted: 7/24/02
Revised: 12/2013
Transient Lodgings Tax Penalty Waiver or Reduction Policy
Portland City Code Section 6.04.080 F. states that “any operator who fails to remit the tax herein levied within the time herein stated shall pay the penalties herein stated, provided, however, the operator may petition the Director for waiver and refund of the penalty or any portion thereof and the Director may, if a good and sufficient reason is shown, waive and direct a refund of the penalty or any portion thereof.”
A penalty waiver is at the sole discretion of the Revenue Division.
12/15/2011 Terri Williams
Date Program Manager
Adopted: 3/10/1995
Revised: 12/2011