Commercial Lodging EstablishmentsBusiness Licenses

For ease, we will refer to any commercial lodging establishment as "hotel." But, a commercial lodging establishment may be anything from a large hotel to a short-term rental property. For further definition see Municipal Code.

Who is considered a "Transient Guest?"
Why does the City impose this tax on our guests?
How is the TOT calculated?
What is considered taxable rent?

Who is considered a "Transient Guest?"

Any person who stays in your hotel for a period of 30 consecutive calendar days is considered a Transient Guest and is subject to paying TOTs. Any person occupying space in a hotel shall be considered as a transient guest until the period of 31 days, an agreement in writing between the operator and the occupant should be provided reflecting intent to occupy for 31 consecutive days.

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Why does the City impose this tax on our guests?

Taxes, of course, keep the City running by providing essential public safety, repair and maintenance to roads and public facilities, and general improvements to the community. The taxes collected from our transient guests are deposited, along with other City revenue, in the City's general fund for general governmental purposes, including community improvements as determined by the City Council from time to time. These improvements greatly contribute to our City's desirability and encourage future tourism in our community.

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How is the TOT calculated?

All taxable rent charged our guests for lodging purposes is taxed according to the rate established in the Code. Currently, our tax rate is twelve percent (12%) of the taxable rent charged. 10% is unrestricted revenue and 2% is restricted to Creeks Restoration and Water Quality Improvement (Measure B).

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What is considered taxable rent?

Any amount identified as "rent" on a guest's receipt is subject to TOT with no later deduction or reclassification of non-rent items permitted whatsoever. The following is a list of common guest charges to use as a guide to help determine what is considered taxable rent:

Subject to TOT	Not Subject to TOT
Any amount reflected as "rent" on the guest's receipt. Basic room charge. Charges for equipment (i.e. roll-away beds, cribs, television sets, etc.). In-room services (i.e. cost of movies provided through a TV cable channel or any other service not subject to California Sales Tax). Forfeited deposits and/or cancellation charges.	Items subject to California Sales Tax (i.e. taxable meals, etc. which have been listed separately on the guest's receipt). Non-rent items (i.e. phone charges, valet service, parking fees, golf, tennis, etc., which have been listed separately on the guest's receipt).

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Last Updated: Aug 22, 2018