City Auditor Dan Burke said the state redefined the definition of a hotel in 2020 to address the proliferation of short-term rental housing found throughout the state.
He said the new state law definition for hotels includes establishments in which fewer than five rooms were being used to accommodate guests; and establishments with rooms are used to accommodate guests regardless of whether a home is accessible through one of its own keyed entry, or several rooms that are accessible through the same keyed entry.
Burke requested, for consistency purposes, that the city change its tax ordinance to reflect the change in state law and to impose a 3% city lodging tax fee to apply to any applicable lodging facility, including short-term rental businesses.
“I believe that it is reasonable and fair to apply the same lodging tax to short-term rental facilities that traditional motels or hotels are required to pay,” Burke said in his report. “On average, the city lodging tax generates approximately $ 23,000 annually.”
Council member agreed with the proposal. Councilman Scott Norris said the average VRBO property in Lebanon costs $150 a night.
“I don’t like taxes but this is a form of equity,” said Councilman Mike Cope.
The tax collection will start Jan. 1.
Al Hardy, owner of Hardy Lodging Suites on Wright Avenue, said he always believed that the city should have imposed a lodging tax as well as inspected the bed and breakfasts and other short term rentals.
“It’s not fair to local businesses, when these companies (AirBnB, Vrmo, etc.) charge premium rates,” he said.
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