Issaquah, WA Hotels & Lodging: Transient Occupancy Tax (2026)

The tax is set by Issaquah Municipal Code § 3.11.020, in Chapter 3.11 of Title 3 (Revenue and Finance). The rate is 1 percent, applied to the sale of or charge made for the furnishing of lodging, and only where that lodging is subject to tax under Chapter 82.08 RCW. Section 3.11.010 incorporates the definitions of RCW 67.28.080 by reference, so the state lodging-tax definitions decide what counts as a taxable stay in Issaquah.

The tax does not stack on top of the state sales tax. Section 3.11.040 provides that tax imposed on a sale of lodging is credited against the amount of sales tax due to the State under Chapter 82.08 RCW on the same sale. Section 3.11.030 does the same on the county side: any County ordinance or resolution adopted under RCW 67.28.181 must contain a credit against the County tax for the full amount of the City tax on the same taxable event.

Collection is handled by the state. Under § 3.11.080 the tax took effect on the first day of January, 1999, and under RCW 67.28.200 it is collected by the State Department of Revenue, at no cost to the City, and distributed to the City under that Department's rules and regulations. A lodging operator therefore deals with the Department of Revenue, not an Issaquah finance counter, for remittance.

The revenue is restricted. Section 3.11.050 creates a special fund called the Lodging Tax Fund and directs that all taxes levied under the chapter go into it to pay all or part of the cost of tourism promotion, acquisition of tourism-related facilities, or operation of tourism-related facilities, as those terms are defined in RCW 67.28.080. The City Finance Director may invest the money in interest-bearing securities, and the City Council may agree to use the revenue for a multi-jurisdictional tourism-related facility.

Under § 3.11.060 a Lodging Tax Advisory Committee of at least 5 members, appointed by the City Council, reviews any proposal to impose a new lodging tax, raise the rate, repeal an exemption, or change how the revenue is used. The Council must submit such a proposal to the Committee at least 45 days before final action. The chapter text in the Issaquah code does not use the term short-term rental, so the chapter's own wording is the test of what is taxed.