Oregon Adopts Temporary Lodging Tax Rule

The state sets new calculation guidelines for hotel stays spanning the upcoming January 1 tax rate increase.

Updated on Oct. 30, 2026 in Taxes

Isometric editorial illustration of a mountain lodge roofline, representing Oregon lodging tax policy adjustments. — The Oregon Department of Revenue has finalized a temporary regulation to standardize lodging tax calculations for stays overlapping the upcoming January 1 tax rate increase. AI Illustration. Upload story photo >

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The Oregon Department of Revenue has adopted a temporary regulation to govern state lodging tax calculations. This measure clarifies how taxes are applied to occupancies that begin before and end after the state's upcoming tax rate change.

Why it matters

The regulation ensures clarity for businesses and travelers regarding tax obligations for stays that overlap with the transition to a higher state lodging tax rate. It mandates that taxes be calculated separately for each portion of a stay based on the specific date.

The state lodging tax rate is set to increase from 1.5 percent to 2.75 percent starting January 1, 2027. This change requires that tax be imposed separately for each portion of a stay occurring before or after this effective date.

The players

Oregon Department of Revenue

This state agency is responsible for the administration and enforcement of tax laws throughout Oregon.

The details

Lodging providers must split tax applications for stays that bridge the transition date, applying the 1.5 percent rate to days through December 31, 2026, and the 2.75 percent rate to days starting January 1, 2027. This regulatory approach aims to prevent confusion for providers during the change in tax law.

December 31, 2026 marks the final day for the current 1.5 percent tax rate.
January 1, 2027 serves as the effective date for the new 2.75 percent tax rate.

Market Dynamics

This temporary regulation clarifies the implementation mechanics of the Oregon state lodging tax statutes ahead of a scheduled rate hike. It demonstrates how state agencies proactively address administrative transitions to ensure compliance during shifts in fiscal policy.

Travelers and lodging providers in Oregon should prepare for a split-rate calculation for any reservations covering the turn of the year. This shift will increase the total tax burden for portions of stays occurring on or after January 1, 2027.

The takeaway

Travelers with multi-day bookings spanning New Year's Day should review their final bills to ensure taxes are correctly apportioned. Proper documentation of stay dates will be essential for both guests and property managers to comply with the new regulatory requirements.