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Committee approves raising daily TOT exemption from $30 to $40, citing hostel economic concerns
Summary
The committee advanced an ordinance to raise the daily transient-occupancy tax exemption from $30 to $40 to help youth hostels keep operating amid rising costs, after testimony from multiple hostel operators and OEWD analysis that city revenue impact would be negligible.
The Budget & Finance Committee on Dec. 10 voted to approve technical amendments to the Transient Occupancy Tax (TOT) exemption, raising the daily exemption threshold from $30 to $40.
Lisa Pagan of the Office of Economic and Workforce Development explained the change is intended to account for inflation since 1998 and to help youth hostels and budget accommodations keep operating. "Based on an analysis of the consumer price index from 1998 to 2013, we believe that the request for an increase in the exemption...is justified," Pagan said.
Representatives from several hostels testified in support, describing the role hostels play in providing affordable lodging for travelers, employment for local workers and economic spillovers to neighborhood businesses. Darren Overby, owner of Pacific Tradewinds Hostel, told the committee the increase would allow hostels to maintain safe, well-run facilities for budget travelers. Hostelling International and other operators described high annual guest volumes and employment supported by hostels.
OEWD staff said the office does not expect a revenue loss to the city from the change and noted the weekly exemption ($100) was unchanged. After public comment and brief discussion the committee approved the technical amendment and advanced the ordinance to the board.
