A Transient Occupancy Tax(TOT), often known as the hotel tax, or lodging tax, is a type of tax imposed on visitors when they rent a room at a lodging business, such as a hotel, short-term vacation rental, or campground usually for less than 30 days. In California, by California Revenue and Taxation Code 7280, the power to levy the Transient Occupancy Tax goes to cities and counties. The TOT that the county levies only applies to the unincorporated areas of that county.  In addition, voter approval is required for any city or county in California to levy new or increase the TOT. For TOT imposed for general government purpose, i.e, the tax goes to the general fund and is spent toward various categories in the general fund, a simple majority of electorate voting is required. For TOT imposed for special purposes, a two/third electorate voting is required.
Background[edit | edit source]
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Transient Occupancy was introduced to the cities in California as early as the mid-twentieth century. Imperial Beach established the TOT in 1965. In comparison, San Diego City established TOT in 1964, Chula Vista in 1973, and Carlsbad in 1984.  Measure G was passed in 1990 in a simple majority vote, thereby raising the TOT of Imperial Beach from 8% to 10%. In the same year, two other cities in San Diego County also had their TOT measure passed: Vista and La Mesa. By 2022, all 18 incorporated cities in San Diego County have enacted TOT. The highest TOT rate is owned by Solana Beach, 13%. In contrast, Lemon Grove has the lowest TOT rate in the county, 6%. 14 out of 18 cities in the County currently have 10% TOT rate.
The TOT rate of Imperial Beach has remained at 10% from 1990 to 2022. In November 2021, the City Council has discussed several potential options for increasing general fund revenue, which include increasing the TOT rate.
Summary of the Measure[edit | edit source]
The City of Imperial Beach is considering raising the current 10% TOT rate to either 13% or 14%. If accepted, as estimated by the city's officials, each one percent increase will generate an additional 100,000 dollars in revenue for the general fund. The total additional revenue generated by this measure is estimated to be 300,000 to 400,000 dollars.
This increase would maintain and/or increase the quality of service in a variety of areas. It mostly focuses on increasing security presence in public spaces by expanding the Park Ranger Program, expanding parks and recreation facilities and programs, and enhancing maintenance and facilities in tourist areas.
Since it is a tax imposed on the lodging visitors, the local residents will not be affected by this measure. It will only have a direct effect on the three hotels and 100 registered Airbnb in Imperial Beach. The two largest hotels, Hampton Inn & Suites and Pier South Resort have shown their support for this measure. In addition, Mayor Serge Dedina and Imperial Beach City Council also gave their support. They consider increasing TOT as the optimal fund-raising option for the City's general fund.
The SDCTA took a position of supporting the proposed transient occupancy tax. The SDCTA decides that Imperial Beach has demonstrated a justifiable need in increasing the TOT and established a good record of effectively managing the fund revenue and assets. A more in-depth analysis of the proposed TOT increase can be found in the SDCTA’s position paper.
Citation[edit | edit source]
- Cal. Revenue and Taxation Code § 7280 a https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC§ionNum=7280