Parking tax troublesome for downtown Salem businesses struggling during COVID-19

Whitney Woodworth
Salem Statesman Journal

After facing shutdowns, accumulating bills and a sharp decline in customer traffic, downtown businesses are starting to protest the City of Salem's annual parking district tax.

The bills can total hundreds of dollars and are dependent on square footage and a business's hours of operations. 

Lora LaMon, of RJ Dance Studio, said her business had to remain completely closed during April and May. Like many business owners, she couldn't turn to "curbside" or "carryout" service to tide her and her employees over through the shutdown. 

Even with restrictions loosening and more businesses reopening, RJ Dance Studio is far from conducting business as usual. But after having no revenue for months, LaMon still received her parking tax district bill of more than $400.

Cars line Court St NE in Salem, Oregon, on Wednesday, July 8, 2020. Some business owners say they are struggling to pay a downtown parking tax amid a difficult economic climate.

Other downtown businesses have echoed her concerns about making the tax payments on top of the other economic hardships. 

"One of the most challenging things for a business owner during this time is allocating the few funds that they have available," said Sandra Powell, owner of Olivia's clothing store. "Every dollar counts. I know the city is facing financial challenges as well but it would be helpful if they would suspend the parking tax for the remainder of 2020."

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LaMon said she was able to open for social dances for a few hours one night a week. But she still isn't holding regular classes. Continued changes in mandates over crowd size and masks have made it difficult to reboot classes. 

"While I understand that the city needs revenue, too, I find it very frustrating that the city would send out these Tax Notices now and expect businesses to pay the full amount in light of the current situation," she said. 

LaMon questioned how she supposed to pay the parking tax with no income revenue. And it's possible no one will be using parking for businesses if the threat of another shutdown becomes a reality, she added. 

"The very least the city should do is completely postpone (yes, completely, without penalties or late fees) the collection of the Parking District Tax Assessment bills until this COVID issue is completely behind us once and for all, and we have an opportunity to salvage our businesses and get back on our feet," LaMon said in an email.

Kristin Retherford, urban development director for Salem, said the parking tax payments are not directly associated with free on-street parking in front of a downtown business.

Rather, the tax supports free parking in the parking garages including their operation and maintenance, downtown cleaning, downtown public safety/police services and, to a lesser degree depending on funding, downtown promotion. 

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"The use of streets as outside dining spaces has not reduced the tax for businesses," Retherford said. "As I mentioned before, the parking tax is not directly associated with free on-street parking nor is it associated with adjacency."

According to city officials, businesses have no special rights to parking spaces in front of or near their business.

Cars park along Court St NE in Salem, Oregon, on Wednesday, July 8, 2020. Business owners say they are struggling to pay downtown parking tax during the pandemic.

Despite the reduction in available parking spaces, Retherford said the overall cost of operating the Parking District has not decreased and the law does not make a specific allowance for reducing the tax based on temporary street closures.

"Ample free customer parking remains available in parking garages, as well as on a number of streets downtown," she added. 

Business owners said the minimum annual parking tax is around $440 and varies depending on the type of business, square footage, business hours and whether the business provides their own parking for customers. 

Retherford said Salem Revised Code allows for businesses to request their tax be prorated based on the number of months they are in operation during a fiscal year.

"Several businesses have requested this relief," she said. "If a business was closed due to the pandemic, they should contact the City’s Finance department to request the taxes be prorated."

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The City of Salem finance department can be reached at 503-588-6040 and via email at finance@cityofsalem.net.

LaMon said she was unaware of the city prorating the tax due to COVID-19 closures and did not see any information on prorating her tax bill. 

But she said itthe help will help with offsetting some costs.

"It’s not much, but it’s something," she said. 

For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com, call 503-910-6616 or follow on Twitter @wmwoodworth.