In this week’s Legislative Newsletter, we take a deep dive into the bills and background affecting tourism tax legislation.

The 2025 Legislative Session is unfolding against the backdrop of uncertainty. Mandates from the new administration have left many of you, our partner organizations, unsure of the future – in terms of funding, staffing, and support.

Representative David Gomberg sums it up well in a recent newsletter when he says, “The nation is far from any consensus on what makes America great. And the daily litany of federal firings, canceled grants, and policy changes emanating from Washington D.C. continue to create an uncertain environment.”

We’re already seeing the effects on the coast, including the three multifamily housing projects with 180 units planned in Tillamook County that lost $3.78 million of federal funding, and a $12.56 million federal grant proposal for the Killam Creek bridge replacement that was withdrawn.

Park rangers at Yaquina Head have been dismissed, and NOAA and NWS have experienced significant cuts that will negatively impact Oregon’s blue economy.

Federal funding makes up 30% of Oregon’s state budget, which will impact many programs across the board.

While we feel these impacts ripple across the coast, we also know that the future of our communities relies on all of us supporting one another and coming together behind policy that shapes a sustainable future for us and our environment.

As the regional destination management organization for the Oregon Coast, we are committed to rallying behind legislation that creates a sustainable future for all of us. By focusing on legislation that affects the coast, we still hold power to shape our future locally, even in the face of an uncertain federal landscape.

Transient Lodging Tax

A deep dive into the bills and background affecting tourism legislation

One of the most significant policy discussions currently impacting the coastal economy is changes to Transient Lodging Tax (TLT). In this newsletter, we take a deeper look at the proposed changes, and what it all means for coastal residents, business owners, and anyone with a stake in the coastal economy.

TLT Background

In 2003, Governor Kulongoski was looking for ways to spur Oregon’s economy, and the travel and lodging industry came forward with a solution. The private industry put together a proposal to tax its own customers to help grow our statewide economy, and particularly those in rural communities.

The industry went out on a limb by taxing its own customers. And it is working. Tourism is a top economic driver for communities around the state – particularly in rural areas – bringing a greater level of economic equity.

That tax includes funding for Travel Oregon – which has put Oregon’s tourism industry on the map over the past 20 years – and local tourism marketing and infrastructure development. Of the local TLT funds – newly implemented taxes as well as increases to existing levies – collected after 2003, all funds must abide by a 70/30 split, which means:

  • 70 percent must go toward local tourism infrastructure (trails, performing arts and visual art centers, visitor centers, and other venues) as well as tourism marketing.
  • 30 percent of all taxes levied after 2003 can go toward the applicable local government’s general fund.

Current legislation (ie:, HB 3325) wants to change this split – but to do so would be a departure from a deal made with the industry when the taxes were implemented statewide and would be a deterrent from other industries looking to follow similar paths. It also punishes the tourism industry for being successful by attracting people who come and spend money in communities around the state.

TLT and Local Government

Many municipalities and counties already had TLTs in place locally before 2003. They all were grandfathered in at the existing allocations. So only newly implemented TLTs or the amounts added to existing TLTs after 2003 abide by the 70/30 split.

As a result, most counties and cities have splits that primarily benefit local government general funds rather than specifically tourism marketing and infrastructure. In many cases, the split already is largely beneficial to local government general funds, with a minority going to tourism.

The current formulas are working. Tourism in Oregon has grown to become a $14 billion industry and in many communities – particularly in rural parts of the state – tourism is the number one economic driver.

Tourism contributes $2.3 billion and nearly 26,000 jobs to the coastal economy, employing workers and keeping afloat through seasonal influxes the restaurants and other local recreational and cultural opportunities that year-round residents enjoy. Tourism isn’t just about attracting visitors; it builds an exceptional quality of life for people who live in communities around the state.

A closer look at the Bills in Question:

HB 3556

A major piece of legislation that threatens the coastal economy is HB 3556, which would allow tax districts to redirect a portion of net lodging tax revenues to fund essential services, shifting money away from tourism promotion and development.

Why are we opposing HB 3556?

This bill would reduce the percentage of Transient Lodging Tax (TLT) funds dedicated to tourism promotion and support, diverting them into general city or county budgets. This shift could have long-term negative impacts on tourism, which is a primary economic driver for coastal communities.

Tourism-related businesses and local economies rely on TLT funds to enhance visitor experiences, support tourism infrastructure, and market the Oregon Coast as a premier destination. If this allocation is changed, it could weaken the tourism industry’s ability to sustain and grow the economy.

HB 2977 

Another bill we are tracking closely is HB 2977, which would increase the state lodging tax by 1% to fund species conservation through the Oregon Department of Fish and Wildlife (ODFW). While conservation is vital, this increase would make Oregon less competitive for conventions, group travel, and major events.

Why are we opposing HB 2977?

OCVA opposes this bill because increasing the TLT will directly harm Oregon’s tourism industry, a vital driver of our state’s economy.

Oregon Coast Visitors Association Executive Director Marcus Hinz shared in a testimony against HB 2977 that “If it made sense to raise the state TLT, our industry would have done that –but it doesn’t make sense– not even to raise it for ourselves.”

While conservation is vital, this increase would make Oregon less competitive for conventions, group travel, and major events. The Oregon Coast tourism industry is very committed to environmental protection and enhancement and investing in recreation and access to nature, and dedicates many of its resources and programs to these issues already. Travel Oregon’s new 10 Year Strategic Vision includes explicit and powerful stewardship goals and objectives.

Unlike top global destinations, Oregon relies on competitive pricing to attract visitors, particularly for conferences and conventions, which are highly price-sensitive.

A higher TLT would force businesses to lower room rates, reducing revenue for already struggling establishments. Additionally, many communities are already planning their own TLT increases to fund essential tourism infrastructure, such as convention centers. A statewide increase would create unnecessary competition, placing additional strain on cities and counties.

Want to learn more about how the TLT helps Oregon Coast communities? We’ve put together a short article that dispels some common myths about TLT. Learn more here.