Oregon Short-Term Rental Laws: Licensing, Taxes & Penalties

Oregon’s short-term rental laws operate on three stacked layers: a state license from the Oregon Health Authority, a local permit from your city or county, and tax registration with both the state and your local jurisdiction. There is no single statewide permit that covers everything, and the rules change meaningfully across city lines. A rental that is fully legal in Bend may be prohibited in a Portland residential zone, and a host in Hood River faces a different occupancy formula than one in either city.

The State License Every Operator Needs

Oregon Administrative Rules Chapter 333, Division 029 governs what the state calls “travelers’ accommodations.” Under OAR 333-029-0020, no one may operate, manage, or maintain a travelers’ accommodation without first applying for a license, paying the application fee, and receiving a license from the issuing authority.¹ These licenses expire on December 31 each year and must be renewed annually.

The same rules require you to be available on the premises while the accommodation is open for use, or to post the name and location of a responsible representative on-site. Buildings, equipment, fixtures, and furnishings must be kept clean, in good repair, and maintained to protect guest health and safety.¹ This license applies statewide no matter what your city adds on top.

Local Zoning and Permits

Zoning is the first thing to check, and often the thing that ends the plan. Your property’s zone determines whether a short-term rental is allowed at all, allowed with conditions, or prohibited outright. Residential zones usually face tighter restrictions than commercial or mixed-use areas, and submitting an application for a zone that doesn’t allow short-term rentals wastes both your time and a non-refundable fee.

Many Oregon cities add primary residency requirements on top of zoning. Portland only allows accessory short-term rentals in residential zones if the owner occupies the unit as a primary residence for at least 270 days per year, and renting an entire dwelling without a long-term resident present is not allowed in Portland’s residential zones. Portland uses a two-tier permit system: Type A for one or two bedrooms with up to five guests, and Type B for three to five bedrooms, which requires a Conditional Use Review.²

Bend takes a different approach, distinguishing between owner-occupied rentals (where the owner stays on-site during the guest’s visit) and whole-house rentals, which are subject to concentration limits and a more involved permit review. Bend requires a permit for each dwelling unit used as a short-term rental, even if multiple units sit on the same lot, and limits properties with multiple units to a single STR permit.³

What Your Application Will Ask For

Exact requirements vary, but most Oregon cities and counties ask for proof of property ownership (a deed or recent property tax statement), a site plan or floor plan identifying sleeping areas and emergency exits, and contact information for a local representative who can respond to complaints. Liability insurance is commonly required. Bend mandates at least $1 million in liability coverage, while Portland requires insurance without specifying a minimum amount. Confirm your city’s specific threshold before buying a policy.

Fees and Renewal

Application and renewal fees range widely. In Bend, annual renewal runs $255 plus a transportation fee supplement of $108 to $200, depending on whether the property is a whole-house rental.⁴ Other jurisdictions set their own schedules, so budget for both the initial application and annual renewals when deciding whether the numbers work.

Fire and Safety Equipment Required by State Law

Oregon layers state fire and safety rules on top of whatever your local jurisdiction requires. Violations carry civil penalties and can cost you the license.

Smoke Alarms

Under ORS 479.270, the owner of any rental dwelling unit must supply, install, and maintain smoke alarms and provide written testing instructions to occupants.⁵ State Fire Marshal rules require smoke alarms in each sleeping room and in the corridor or area giving access to sleeping areas. Where sleeping areas are on an upper level, the alarm should be placed as close to the center of the ceiling over the stairway as practical.⁶

Carbon Monoxide Alarms

ORS 90.317 requires landlords to ensure that any dwelling unit containing a carbon monoxide source, or connected by a door, ductwork, or ventilation shaft to a room with one, has one or more carbon monoxide alarms installed in compliance with State Fire Marshal rules.⁷ In practice, any property with a gas furnace, water heater, fireplace, wood stove, or attached garage needs CO alarms.

Fire Extinguishers

Oregon’s travelers’ accommodation rules require portable fire extinguishers with a minimum rating of 2A:10B:C, positioned so that no guest has to travel more than 75 feet to reach one.⁸ For a typical house or condo, that usually means one on each floor, with special attention to the kitchen.

Occupancy, Parking, and Noise

Guest limits are set locally, but a common Oregon formula is two people per bedroom plus two additional guests. Bend codifies this directly, so a two-bedroom property may host a maximum of six overnight guests.³ Hood River uses the same formula for overnight occupancy (10 p.m. to 7 a.m.) and allows six additional people during daytime hours.⁹ Portland caps Type A permits at five guests regardless of bedroom count.²

Most jurisdictions also require designated off-street parking, and noise ordinances generally prohibit loud activity during late-night hours. Neighbor complaints are the fastest path to permit revocation in most Oregon cities, so these rules matter more than they look on paper.

Lodging Taxes You Must Collect

Oregon imposes a state transient lodging tax of 1.5% on all consideration charged for short-term lodging under ORS 320.305.¹⁰ You must register for a tax account with the Oregon Department of Revenue, a separate process from any local permit.¹¹

Local taxes stack on top of the state rate and often dwarf it. Deschutes County charges 8%.¹²¹³¹⁴

These taxes apply whenever a guest stays fewer than 30 consecutive days. Stays of 30 days or more by the same person are exempt under ORS 320.308.¹⁰ Some booking platforms collect and remit certain Oregon taxes automatically, but coverage is inconsistent across jurisdictions and tax types. Confirm with both the Department of Revenue and your local tax authority which accounts you need and which taxes you owe directly.

Federal Income Tax Basics

Short-term rental income is taxable federally with one narrow exception. If you rent your home for fewer than 15 days during the year, you do not need to report any of that rental income, and you cannot deduct any associated rental expenses.¹⁵ Once you cross that threshold, all rental income becomes reportable.

For properties rented 15 days or more, you report income and may deduct associated expenses such as cleaning, maintenance, insurance, depreciation, and a portion of utilities. How you split expenses between personal and rental use depends on how many days you use the property yourself versus rent it out. IRS Publication 527 lays out the framework.¹⁶

Rental income is generally excluded from self-employment tax under 26 U.S.C. § 1402(a)(1).¹⁷ That exclusion disappears if you provide “substantial services” to guests beyond what is needed to maintain the property. Daily housekeeping, concierge services, airport shuttles, and stocked personal toiletries can push a rental into hospitality-business territory and trigger self-employment tax on the net. Providing linens, Wi-Fi, and a furnished kitchen is generally fine; hotel-style personal service is what tips the scale.

Booking platforms like Airbnb and Vrbo are third-party settlement organizations. Under federal law as amended by the One, Big, Beautiful Bill Act, they must issue you a Form 1099-K if your gross payments exceed $20,000 and you have more than 200 transactions in a tax year.¹⁸ Falling below that threshold does not make the income tax-free. You still must report it.

A Permit Does Not Override Your HOA

Even with a clean zoning check and an approved permit, private restrictions can still shut you down. Homeowners’ association rules and CC&Rs recorded against the property frequently limit commercial activity, and courts have split on whether short-term rentals qualify. Some have found that renting to transient guests through booking platforms counts as commercial use that violates residential-only covenants. Others have held that renting a home does not change its residential character as long as the CC&Rs don’t explicitly mention rentals. Read your CC&Rs before investing in permits and setup costs, because an HOA enforcement action can stop an otherwise legal rental regardless of what the city allows.

What Noncompliance Actually Costs

Operating without the required permits, or violating license conditions, exposes you to enforcement from multiple directions at once.

At the state level, violations of Oregon’s travelers’ accommodation rules carry civil penalties organized by severity. The most serious, including fire safety and sanitation failures, are Class I violations with penalties ranging from $75 to $1,000 per violation. Operating without posting a responsible representative or failing general maintenance standards are Class III violations with penalties from $25 to $350.¹

Local penalties layer on top. In Portland, operating an accessory short-term rental without the required permit or in violation of permit conditions triggers code enforcement action, including citations with civil penalties. If cited violations are not corrected within 30 days, a monthly code enforcement fee accrues until the property passes re-inspection.²

Tax penalties add a third layer. Failing to register for a transient lodging tax account, collect the taxes, or remit them on time results in penalties and interest from both the Oregon Department of Revenue and your local taxing authority. The state imposes a 5% penalty for failure to pay within 30 days of a billing notice. Combined with local penalties and interest, the cost of ignoring tax obligations accumulates quickly and can easily exceed the rental income that triggered it.

1
Oregon Health Authority. Chapter 333 Division 029 Travelers Accommodation Rules
2
Portland.gov. Accessory Short-Term Rental Permits – Read Before You Apply
3
City of Bend. Bend Development Code 3.6.500 Short-Term Rentals
4
City of Bend. Short Term Rental Permits and Licenses
5
Oregon Public Law. Oregon Code ORS 479.270 – Owner of Rental Dwelling Unit to Supply, Install and Maintain
6
Oregon Secretary of State. Oregon Administrative Rules Chapter 837 Division 45 – Smoke Alarms and Smoke Detectors
7
Oregon Public Law. Oregon Code ORS 90.317 – Repair or Replacement of Carbon Monoxide Alarm
8
Legal Information Institute. Oregon Administrative Code 333-029-0095 – Fire Safety
9
City of Hood River. Short Term Rentals – City of Hood River
10
Oregon State Legislature. Oregon Revised Statutes Chapter 320 – Miscellaneous Taxes
11
Oregon Department of Revenue. Transient Lodging Tax
12
Deschutes County. Transient Lodging Tax
13
Multnomah County. Multnomah County Transient Lodging Tax
14
Portland.gov. Transient Lodgings Filing and Payment Information
15
Internal Revenue Service. Renting Residential and Vacation Property
16
Internal Revenue Service. About Publication 527 – Residential Rental Property
17
Office of the Law Revision Counsel. 26 U.S. Code 1402 – Definitions
18
Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One Big Beautiful Bill