Pamplin Media Group – Hillsboro Hotel Owes $300,000 in Unpaid Lodging Taxes

A lawsuit filed in Washington County Circuit Court seeks to force Staybridge Suites Hillsboro to pay.

A Hillsboro hotel owes Washington County and the city about $300,000, according to a criminal complaint filed in court last month.

Staybridge Suites Hillsboro on Northeast Casper Court is the defendant in the lawsuit filed in Washington County Circuit Court in early April. The complaint says the hotel owes just over $210,000 in taxes, plus interest and penalties that push the amount well over a quarter of a million dollars.

Hillsboro’s share would be $74,000, although penalties and interest will continue to escalate if the hotel remains delinquent, until a judgment is rendered on the case.

In response, Washington County said it placed a lien on the property at 6225 NE Casper Court.

Hillsboro and Washington County both have what’s called a Transient Lodging Tax – often referred to as a “hotel tax”, although it also applies to homestays and other forms of lodging. paid – which is collected as a percentage of paid stays. Normally, hotels collect the tax themselves from guests and remit it to the county.

Washington County’s rate is 9% and Hillsboro’s rate is 3% of paid stays at every hotel, motel, and Airbnb rental operating in the county.

The county originally sent the hotel a notice in 2020, saying it had not submitted its tax since October 2019. Court documents show the hotel owners signed a payment plan agreement in November 2020 who allegedly demanded monthly payments of $5,000. Then the hotel defaulted on its payment plan late last year.

County spokesman Phillip Bransford said it was the biggest lodging tax offense he can remember.

The hotel also stopped paying the tax months before the effects of the pandemic were felt in Oregon.

Bransford said that for other breaches, hoteliers typically get back into compliance within months.

The hotel

The hotel is jointly owned by the developer and management company, InterContinental Hotels Group.

The hotel’s developers, Vancouver-based Kirkland Development, told The Oregonian/ that the COVID-19 pandemic has strained the hotel’s finances, preventing it from paying. Hotel management did not respond to a request for comment from Pamplin Media Group.

County officials said that was a flimsy argument. The tax is only collected on stays actually booked and paid for, which means that lower stays equate to a lower amount of tax.

“Most hoteliers have continued to remit collected taxes throughout the pandemic,” Bransford said. “Transient lodging taxes are levied in proportion to hotel/motel stays, so revenue is only generated at the rate of this form of economic activity within the hospitality industry.”

Under the terms of its contract with the two governments, Staybridge may also have to pay interest and a 10% penalty for continued default.

The complaint alleges that the hotel essentially admitted in emails that it was using the tax for its own purposes instead of paying the city and county.

Hurt revenue

Washington County says in its complaint that it not only suffered a drop in revenue due to nonpayment, but it is now spending taxpayers’ money to respond to legal proceedings like this.

Lower overall lodging tax revenue was also cited by the county as a reason for its lower-than-expected revenue for next year’s budget.

In fiscal year 2019 to 2020, the lodging tax brought in more than $14.6 million. This dropped to a total of $10.5 million the following year. Even in the first part of 2020, when travel restrictions became a nationwide reality, hotel revenues fell sharply from pre-pandemic levels.

From February to March 2020, hotel taxes collected increased from over $1.2 million to approximately $660,000. The following month they were well below $300,000.

However, now that travel and lodging restrictions have been lifted, Washington County expects hotel stays to increase, and they are already rebounding.

In its 2022-23 budget proposal, the county says it expects taxes collected to be higher than pre-pandemic levels, estimating a 79% increase over the total collected each of the three years prior to the pandemic. COVID-19.

“On the positive side, bed stays have begun to recover, leading to an increase in transient lodging taxes collected by hotels this fiscal year,” Bransford said in an email. “We have seen an increase in the speed of disbursements, with rare cases short-term debts. »

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