Oregon Tax Trouble: Lack of sales tax leads to lost opportunities in tourism (Oregonian)

November 4, 2012 – As we’ve pointed out a few times, Oregon’s (Aa1 / 68608UPX8) unique tax structure produces a number of unintended consequences. Some, such as unstable budgets, are obvious. Others, such as the negative effect on small business, are subtle. Some are virtually unnoticed.  The state’s meager tax haul from tourism falls into the last category. Oregon has pushed hard to increase its share of the tourism market. However, the lack of a sales tax limits the ability of the state to harvest revenue from tourists. Emphasizing tourism without a sales tax is somewhat like operating a beach resort without selling margaritas. You’re passing up easy money. That doesn’t necessarily mean Oregon needs a sales tax — another topic for another day — just to collect more money from visitors. But tourism-related taxes do need to be on the table as the state considers tax reform. Specific taxes applied to lodging and rental cars won’t solve school-funding problems, but used correctly they can help local governments close some budget gaps or address specific projects. In Oregon, the primary taxes assessed on tourists are transient lodging taxes and rental car taxes. The state assesses a 1 percent lodging tax, which is used to fund tourism marketing programs. But the bulk of tourism-related taxes are collected at the local level by cities and counties, with the stipulation that 70 percent of the net revenue go toward tourism promotion or facilities.

Link to Full Article: http://www.oregonlive.com/opinion/index.ssf/2012/11/oregon_tax_trouble_lack_of_sal.html


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