Salem short-term rental operators will soon face a new city fee after the Salem City Council gave final approval Monday to Ordinance Bill No. 4-26, extending the city’s Tourism Promotion Area assessment to short-term rentals and accessory short-term rentals. The ordinance passed March 23 and brings Airbnb- and VRBO-style lodging into the same tourism promotion system that already applies to hotels and motels.
The move adds Salem’s 2 percent Tourism Promotion Area fee on top of the city’s existing 9 percent transient occupancy tax for qualifying overnight stays. City materials say the tourism fee is used to support destination marketing intended to increase overnight visits, with 95 percent of the revenue going to the city’s destination marketing organization, currently Travel Salem, and up to 5 percent retained by the city for administration.
For the city, the argument is largely about parity. Salem already treats short-term rentals and accessory short-term rentals as lodging uses for tax and licensing purposes. Operators of those rentals must register, collect and remit transient occupancy tax, and the city licenses both hosted and non-hosted forms of short-term lodging under its code. By adding those operators to the Tourism Promotion Area, city officials are effectively saying businesses competing for overnight visitors should contribute to the same promotional system.
The ordinance was not adopted exactly as first proposed. According to the city’s March 23 staff report, the bill was amended after the March 9 public hearing to clarify that hosting platforms can collect and remit the Tourism Promotion Area fee on behalf of operators. That matters because the city had been working with major booking platforms on how the fee would actually be collected. Staff said VRBO was receptive, while Airbnb told the city it collects taxes only where there is a mandatory legal obligation and had identified potentially conflicting language in the city code. The engrossed version of the ordinance removed that ambiguity and clarified that booking agents do not have the right to object in future continuation proceedings.
City staff also built in a transition period. Rather than taking effect immediately, the ordinance was set to begin May 1, 2026. Staff said the delayed start would give operators and platforms more time for outreach, training and system changes. Under the city’s example, stays that occur in May would be reported and remitted by June 30.
The public-hearing record shows the city heard objections from more than two dozen lodging operators before the measure came back for final approval. But those objections represented 6.99 percent of potential rentable units, well below the 33 percent threshold that would have dissolved the Tourism Promotion Area. With the final vote now complete, the city’s next challenge is less about passing the policy than making sure hosts, platforms and city staff can carry it out without confusion
