DATE: May 6, 2025
TO: Mayor and City Council
FROM: Director of Finance
SUBJECT
Transient Occupancy Tax (TOT): Adopt a Resolution Adjusting the City’s Transient Occupancy Tax Rate from 8.5% to 14.0%, Effective July 1, 2025; and Finding that the Action is Exempt from CEQA Review.
RECOMMENDATION
That the City Council adopts a resolution (Attachment II) adjusting the City’s Transient Occupancy Tax rate from 8.5% to 14.0%, effective July 1, 2025; and finds that the action is exempt from CEQA review.
SUMMARY
This report provides a review of the City’s current TOT rate, and consideration for adjusting the TOT rate in accordance with Measure NN, a voter approved ballot measure, which authorized City Council to increase the TOT rate from 8.5 percent to an amount up to 14 percent. In November 2020, the City continued to balance the impacts related to the economic uncertainties around the pandemic. At that time, City Council directed staff to keep the TOT rate at its current rate of 8.5 percent to allow hoteliers time to recover from the pandemic. City Council requested that an adjustment to the TOT rate be reviewed and considered when the economy recovered from the impacts of the pandemic.
This report provides an overview of the TOT rate and a recommendation to adjust the TOT rate to 14.0 percent.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution