6A • December 30, 2016 | Cannon Beach Gazette | cannonbeachgazette.com
Hotels question city’s take on room tax BUSINESS
DIRECTORY
City now requires room taxes to
include all ‘nonoptional fees’
Cannon Beach Gazette
Cannon Beach Hotels and
vacation rentals are concerned
about Cannon Beach’s inter-
pretation of the lodging tax.
In September, lodging op-
erators received a letter from
the city that required lodging
tax collection to include “non-
optional fees.” These could
include booking, late check-
out, extended stay, pet, extra
guests, cleaning, hot tub and
cancellation fees.
Representatives from local
hotels and vacation rental com-
panies say this interpretation
conflicts with the municipal
code. Lodging industry mem-
bers from 16 local businesses
— including Hallmark Resort,
Stephanie Inn, Ocean Lodge,
Tolovana Inn and Surfsand
Resort — have asked the city
to vet the new requirements
through a public process.
The Jan. 3 City Council
meeting will address the lodg-
ing companies’ concerns.
After auditing 10 lodging
operators, the city found that
some hotels did not collect tax
on certain fees subject to the
tax, Finance Director Laurie
Sawrey wrote in the Septem-
ber letter. The city interprets
“gross room rent” to include
any fee that is mandatory, not
refundable and paid in order to
occupy the room, which is con-
sistent with the Oregon Depart-
ment of Revenue definition.
“We are using the state’s
definition for consistency and
because we think it’s the right
thing to do,” Sawrey said in
December.
The customer would pay
more in taxes under the city’s
interpretation of “gross room
rent.”
“The amounts quantified
by a recent audit are not sig-
nificant, but still an amount
that the city should be collect-
ing based on our definition of
gross rent,” Sawrey said.
Representatives from lo-
cal hotels and vacation rental
businesses met in November
to discuss the city’s definition
of “gross room rent.” None
agreed with the city.
“In our opinion the proto-
col for amending the munici-
pal code must include a public
process and direction from the
City Council,” states the letter
to City Council from lodg-
ing industry members. “We
respectfully ask that the city
participate in appropriate dia-
logue with the Cannon Beach
lodging industry to discuss el-
ements of the code and work to
clarify mutual expectations.”
“In other Oregon munici-
palities where we are involved
in business — specifically The
Dalles, Beaverton, Seaside and
our relationships in Portland —
guests are taxed on room reve-
nue only,” Escape Lodging Co.
president Patrick Nofield said
in December.
Nofield said the room tax in
Cannon Beach has only applied
to room revenue until now, and
lodging industry members are
“concerned with the way the
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SUBMITTED PHOTO
Owners of the Lighthouse Inn and other Cannon Beach ho-
tels seek to clarify the city’s room tax.
city implemented a change
without vetting it through an
appropriate process.”
Escape Lodging reviewed
the municipal code chapter re-
garding the room tax and found
the definition of “rent” to be
“the gross rent, exclusive of
other services,” Nofield said.
In an October letter re-
sponding to Escape Lodging’s
concerns, Sawrey said the city’s
code requirements for what is
included in gross rents has not
changed and the September let-
ter was “a reminder and clari-
fication” of code requirements.
“We maintain that the city
has the legal authority to en-
force all of the conditions and
requirements outlined in the
letter,” Sawrey wrote.
Linda Sweeney, owner of
Cannon Beach Vacation Rent-
als, said the city’s interpretation
of gross room tax could affect
her business. She said there
was a lack of public discussion
about the interpretation, but
she hopes that discussion with
the City Council “will clarify
and correct this misadventure.”
“The local lodging industry
was blindsided with the recent
interpretation of the lodging
tax collection,” Sweeney said
in an email. “We work hard to
accomplish the highest quality
product at the most stressful
time of year. The small prof-
it that results must carry us
through the remainder of the
year. The city’s unreasonable
behavior, unfair tactics and
greediness hurts not only my
business but will also reflect on
other small businesses in Can-
non Beach as our guests are
being priced out of our market.
They will look elsewhere to
spend their vacation dollars.”
The September letter to
Cannon Beach lodging opera-
tors also required lodging tax
collection returns to include a
copy of the state lodging tax
quarterly return.
Hotel guests pay an 8 per-
cent city tax and 1.8 percent
state tax to the hotel. The hotel
forwards to the city 95 percent
of the tax paid by the custom-
er and keeps 5 percent of the
amount, Sawrey said.
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Departing councilors honored at work session
Councilors from Page 1A
Steidel said he valued Cad-
wallader’s work as the Clatsop
County local government rep-
resentative for the Cape Fal-
con Marine Reserve. He also
praised Higgins for her com-
munication with hotels during
the effort to increase room tax-
es.
Cadwallader and Higgins
received pieces from Icefire
Glassworks as a departing gift
from the city. Councilors, staff
and residents enjoyed cake and
refreshments after the meeting.
Higgins and Cadwallader,
both elected in 2008, helped
draft and approve the city’s
first strategic plan that outlines
goals for the next five years.
Both councilors served
during the city’s acquisition of
805 acres in the Ecola Creek
watershed from the Oregon
Department of Forestry, fol-
lowing the 2010 voter approval
of a $4 million bond measure.
The acquisition created 1,040
connected acres of city-owned
forest in the Ecola Creek Forest
Reserve.
In the past eight years, the
City Council has also started
the Tourism and Arts Commis-
sion and approved room tax
increases.
Cadwallader, who served
as council president and coun-
cil liaison for the affordable
housing task force, is looking
forward to spending time with
family in California.
“I feel really positive about
the team, my fellow council-
ors, the staff, our city,” Cad-
wallader said in April. “Being
a councilor has been a kick. I
have found it a lot of fun.”
After many years of living
on the North Coast and work-
ing as the Ocean Lodge general
manager, Higgins has relocated
to the Tri-Cities, Washington,
area to open another hotel for
Escape Lodging company.
“I feel like with the council
that we have, we’re leaving it
better and stronger than we
found it,” she said in April.
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GARDENER
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Seaside Rotary sponsors Shop with a Cop
Shop from Page 1A
At breakfast provided by
the Seaside Pig ’N Pancake,
the children and officers got to
know each other and learned
about each other’s lives. Cast-
erline said the event would not
have happened without com-
munity support.
“We’re grateful for Pig ’N
Pancake because that made
it so much more comfortable
for the children. Fred Meyer
made a wonderful donation
to make this program happen
and offered discounts,” Cast-
erline said. “Police officers
bought kids items out of their
own pockets and are really
trying to bridge the gap. It
made me so proud of the cal-
iber of the police officers in
our community. They are just
extraordinary.”
Schermerhorn thanked the
Seaside Rotary, Fred Meyer
and staff, and Pig ’N Pancake
owner Wayne Pool and staff.
“It was great to see all the
smiles and hear the laughter,”
Schermerhorn said. “The of-
ficers had just as much fun as
the children and enjoyed test-
ing out some of the toys and
skateboards.”
Next year, the Rotary Club
hopes to double the number of
participating officers and chil-
dren.
Police chief gets
Silver Beaver award
Cannon Beach Police Chief
Jason Schermerhorn is a 2017
recipient of the Boy Scouts of
America Silver Beaver Award.
The award, created in 1931, is
the council-level distinguished
service award that recognizes
“registered Scouters of excep-
tional character,” according to
the Boy Scouts of America.
Upon nomination by their lo-
cal Scout council and with the
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approval of the National Court
of Honor, award recipients are
adult leaders who have made
an impact on the lives of youth
through service given to the
council. “The Silver Beaver is
an award given to those who
implement the Scouting pro-
gram and perform community
service through hard work,
self sacrifice, dedication, and
many years of service,” ac-
cording to the youth develop-
ment organization.
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SUBMITTED PHOTO
Officer James Jordan tries
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Laurelwood Compost • Mulch • Planting MacMix
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BUSINESS
DIRECTORY