Federal Way, WA Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Tax rate
- 1 percent of lodging charge
- Applies to
- hotels, motels, rooming houses, tourist courts, trailer camps
- Exempt stays
- continuous occupancy of one month or more
- Collecting agent
- Washington State Department of Revenue
- Revenue use
- Hotel/Motel Tax Fund No. 109, tourism promotion
Summary
Federal Way imposes a special excise tax of 1 percent on lodging charges at any hotel, motel, rooming house, tourist court, or trailer camp under FWRC 3.25.010, layered on top of the state sales tax under Chapter 82.08 RCW.
There is hereby created a special excise tax of one percent on the sale of or charge made for the furnishing of lodging that is subject to tax under Chapter 82.08 RCW. The tax imposed under Chapter 82.08 RCW applies to the sale of or charge made for the furnishing of lodging by a hotel, motel, rooming house, tourist court, or trailer camp, and the granting of any similar license to use real property as distinguished from the renting or leasing of real property. It shall be presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same.
Official source re-checked September 8, 2026: no newer edition of the code had been published (publisher’s edition: current through Ordinance 26-1049, passed August 11, 2026).
Full Breakdown
08 RCW. The tax reaches lodging sold by a hotel, motel, rooming house, tourist court, or trailer camp, and applies to the granting of any similar license to use real property rather than an actual rental or lease. The code draws a bright line at duration: occupancy of real property for a continuous period of one month or more is presumed to be a rental or lease of real property, not a taxable license to use, which pulls long-term stays out of the tax entirely.
020). Collections go into a dedicated special revenue fund, Hotel/Motel Tax No. 28 RCW. 08 RCW administration. This piggybacks Federal Way's local lodging tax onto the state's existing sales-tax collection machinery rather than running a separate city billing system for hotel operators.
Violations & Fines
FWRC 3.25.050 makes it unlawful for any person, firm, or corporation to violate or fail to comply with any provision of the chapter, covering a hotel operator's failure to collect, remit, or otherwise administer the tax as the Department of Revenue's rules require. Because collection runs through the Department of Revenue rather than a city finance office, enforcement and any assessment of back taxes, interest, or penalties for a delinquent lodging operator follows the state's standard sales-tax collection and enforcement procedures under Chapter 82.32 RCW.
Frequently Asked Questions
How much is Federal Way's hotel tax?
Does the 1 percent tax apply to a month-long stay?
Who collects Federal Way's lodging tax?
Where does the lodging tax money go?
Sources & Official References
Other rules in Federal Way
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Transient Occupancy Tax in Nearby Cities
How other cities in King County handle transient occupancy tax.