City Council Starts Process to Repeal Parking Tax

The Salem City Council passed the first reading of an ordinance to repeal the Downtown Parking District Tax following the transition to paid on-street parking system launched in July 2025. The ordinance, when taken up for final approval February 9, will retroactively eliminate the tax as of July 1, 2025, and businesses that paid the tax will get refunds for taxes paid since that date.

The paid parking program has exceeded expectations, generating $1.19 million in revenue during its first six months. Monthly revenues steadily increased, with $160,741 collected in July and $209,244 in December. The program has also improved parking turnover, with the average vehicle parking time recorded at 90 minutes. This turnover ensures more spaces are available for visitors.

The program has also boosted parking garage permit sales. This trend suggests that paid on-street parking is encouraging more people to use parking garages, freeing up spaces for downtown shoppers and diners.

Revenue from the paid parking system replaces the Downtown Parking District tax and is intended to cover parking structure operating costs, including maintenance, enforcement and infrastructure upgrades; downtown cleaning and parking garage security, cleaning and electricity of the parking structures.

Why it matters: The repeal of the Downtown Parking District Tax marks a significant milestone in the City's efforts to improve parking accessibility and availability, support security and cleaning needs in the Downtown and in parking structures and support downtown businesses. The City Council will continue monitoring the program's progress and community feedback.

Online: Downtown Paid and On-Street Parking Update