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City looks to expand hospitality tax
McMinnville official Everett Brock.

The city of McMinnville is expanding its hospitality tax collection effort.

In September 2017, the state legislature approved a request from the city to levy a hospitality tax –currently at 5% – on hotels and motels. In 2020, city officials began discussing adding to that measure and including short-term rentals, such as bed and breakfasts and Airbnb (Air Bed and Breakfast), located within the city of McMinnville.

“At one time we thought we’d have to change the Occupancy Tax Ordinance because of adding Airbnb,” said Alderman Everett Brock, during a Finance Committee meeting on Tuesday.

City attorney Tim Pirtle said a change is not needed, “It is my opinion that the language in the ordinance is sufficient to bring in the purview what we call Airbnb, bed and breakfast establishments, so no further action is required of the board.”

Airbnb is an online marketplace which lets people rent out their properties or spare rooms to guests. Airbnb takes 3% commission of every booking from hosts, and between 6% and 12% from guests.

Pirtle says Airbnb independently contracts with different municipalities to collect and remit hospitality taxes, but that is subject to a private contract between the online marketplace and those municipalities.

“If they are interested in partnering with us in performing that task it would take little bit of work off Recorder Shirley Durham’s plate,” said Pirtle. “Otherwise, it will be incumbent upon those local providers of hospitality services to report and remit their tax. This is a self-reported system. The recorder is charged with doing an annual audit of the income of those establishments but not more than that.”

Revenue collected from the tax is given to the city’s Tourism Development Board. The board works much like the Industrial Development Board. However, its focus is on encouraging tourism growth.