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De Minimus Rental of Private Home Policy

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De Minimus Rental of Private Home Policy

According to Transient Lodgings Tax Law 6.04.050, no tax shall be imposed on any person who rents a private home, vacation cabin, or like facility from any owner who rents such facilities incidentally to his own use thereof, except Bed and Breakfast Homes and Inns.

For purposes of this code section, the Bureau defines incidental as a period of 7 days or less over the course of one calendar year.  The 7 days need not be consecutive. Additionally, the Bureau would not consider the use to be incidental if the facility is advertised or marketed to the general public. This advertising/marketing includes, but is not limited to newspapers, websites, social media and public postings.

Example 1:  If an occupant rents a private home from their friend for a period of 7 days or less and the home is not rented out to anyone else over the course of the calendar year, the rental period is exempt from the Transient Lodgings Tax.  The owner of the home does not need to register as an operator with the Bureau.

Example 2:  If an occupant rents a facility from their relative for a period of 8 days, but no more than 30 days, the rental period is subject to the Transient Lodgings Tax and the tax must be collected and remitted by the owner/operator.

Example 3:  Three occupants rent the same facility at different timeframes throughout the same calendar year.

  • Occupant 1 rents the facility for a period of 3 days in February.  This is the owner’s first rental of the calendar year. 
  • Occupant 2 rents the same facility for a period of 3 days in the month of June.  The facility has now been rented a total of 6 days.
  • Occupant 3 also rents the same facility for a period of 4 days during the month of September. The same facility has now been rented for a period of 10 days in the same calendar year.  The facility has now exceeded the incidental period of 7 days allowed for the calendar year.

It is important to note that the owner/operator will be responsible for any Transient Lodgings Tax not collected from Occupant 1 or Occupant 2 if the facility exceeds the 7 day incidental period allowed for the calendar year.  If the owner/operator chooses to collect the tax from Occupant 1 and Occupant 2 and it is later determined that the 7 day incidental period was not exceeded, any tax collected must be remitted to the City of Portland.    

Facilities that are not used personally by the owner would also not be subject to the Transient Lodgings Tax if their lodging use is incidental as defined above.  This would include but not be limited to properties that are purchased by an individual for investment purposes.

Example 4:  An individual purchases a rental house.  The owner rents the house to Occupant A from January 1, 2014 through January 5, 2014. On January 13, 2008, Occupant B rents the property for the remainder of the calendar year.  Although the property is specifically intended for investment purposes and is not for personal use, Transient Lodgings Tax would not be imposed on Occupant A and the owner would not need to register as an operator with the Bureau.  In the case where an owner/operator is in the business of offering Transient Lodgings services (e.g., hotel, motel, bed & breakfast, vacation rental), this example would not apply and the tax must be collected and remitted for the January 1, 2014 through January 5, 2014 occupancy.

02/19/2014                                               signed by Terri Williams
_________________                      ____________________________________

Date                                                  Transient Lodgings Tax Program Manager