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Council grants Holman Hotel 60-day extension for visitor taxes amid assessment dispute
Summary
The council approved a 60-day extension and waiver of associated penalties for the Holman Hotel's December and January transient-occupancy and Salem tourism-promotion-area taxes; the hotel cited an appealed Marion County property-tax assessment and loan/refinancing issues.
The Salem City Council approved a 60-day extension on Tuesday allowing the Holman Hotel more time to pay December and January transient-occupancy tax (TOT) and Salem tourism promotion area (STPA) charges, and waived related late penalties for that period.
Matt Smith, general manager of the Holman Hotel, told the council the hotel’s owner had appealed a Marion County property-tax assessment that the hotel says left the business in a precarious cash position. Smith said the hotel remains committed to fulfilling its tax obligations while the appeal and financing issues are resolved.
Chief Financial Officer Josh Eggleston said he can administratively authorize up to a 30-day extension, but the hotel requested 60 days, which triggered council review. Eggleston said the code allows penalty waivers; he also said the city does not commonly receive 30-day extension requests but does routinely consider penalty-waiver requests for businesses in good standing. He described the Holman Hotel as meeting standards for an extension.
Councilor Nishioka moved approval of the 60-day extension with associated penalty waivers; Councilor Matthews seconded. The roll-call vote recorded all aye and the motion passed.
Eggleston told council the hotel had described difficulties converting a high-interest construction loan to conventional financing as part of the explanation for the cash shortfall. Councilors asked whether the assessed property-tax appeal affects TOT/STPA liability; staff clarified that TOT and STPA are based on room-night gross receipts (heads and beds) and are not determined by property-tax assessment.
Staff clarified that interest continues to accrue on unpaid taxes under the code; the code allows penalties (distinct from interest) to be waived. If the hotel fails to make payment by the extended due date, additional penalties and interest would apply and the city could take collection actions.
Clarifying details: extension covers December and January TOT and STPA payments; CFO can authorize 30 days administratively, council approved a 60-day extension; reasons cited by hotel included an appealed property-tax assessment and difficulty refinancing construction loans. The motion was recorded and adopted by roll call.
