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Policies & Legal

What is California Transient Occupancy Tax?

Updated 2026-05-28

The California Transient Occupancy Tax, commonly abbreviated as TOT, is a local tax imposed on occupants of hotels, motels, vacation rentals, and other forms of short-term lodging. This tax applies to stays of 30 consecutive days or less.

Because it is a local tax, the specific rate and administrative rules are determined by individual city and county governments, not the state. It is also frequently referred to as a 'bed tax' or 'hotel tax'.

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How it works

The property host or manager is responsible for charging and collecting the TOT from the guest as a percentage of the rental revenue. This revenue typically includes the nightly rate plus any mandatory fees like cleaning fees.

The host then remits the collected tax funds to the appropriate local tax authority, usually on a monthly or quarterly basis, along with a completed tax return form. While some online travel agencies (OTAs) may collect and remit TOT on behalf of hosts in certain jurisdictions, the host is ultimately responsible for ensuring compliance. Vacation rental software can help automate this process by allowing hosts to configure tax rules that are automatically applied to direct bookings, which helps streamline hosting operations.

Why it matters

Complying with California Transient Occupancy Tax regulations is a fundamental legal requirement for vacation rental operators in the state. Failure to register, collect, and remit the correct tax amount can result in significant penalties, back taxes with interest, and potential legal action from local authorities.

Proper management of TOT is essential for running a lawful and financially sound short-term rental business in California. See the official website for current details.

Examples

  • A host in Palm Springs lists their property for $300 per night. With the city's TOT at 11.5%, they must add an additional $34.50 per night to the guest's bill and remit these collected funds to the city.
  • A property manager overseeing five rentals in the City of Los Angeles, where the TOT is 14%, uses their accounting system to track the tax collected from each booking. At the end of each month, they file a tax return and remit the total amount to the city's Office of Finance.
  • An owner renting out a spare room in their San Diego home for a weekend is required to charge the guest the city's 10.5% TOT on the total rental amount. They must then register with the City Treasurer and submit the tax collected.
  • A host with a cabin near Lake Tahoe, located in an unincorporated part of Placer County, uses a booking platform that has an agreement to automatically collect and remit the county's 10% TOT for all reservations, simplifying their tax obligations.

Frequently asked questions

Is the California Transient Occupancy Tax rate the same across the state?+
No, it is a local tax, not a statewide tax. Each city and/or county sets its own TOT rate, registration requirements, and remittance procedures. Rates can vary significantly between jurisdictions.
What parts of a guest's payment are subject to the TOT?+
Generally, the tax applies to the total rental charge paid by the guest. This usually includes the nightly rate, cleaning fees, and other mandatory charges. It typically does not apply to refundable security deposits. Hosts must consult their specific local ordinance for a precise definition of the taxable 'rent'.
Do I need to collect TOT if I only rent my property through Airbnb or Vrbo?+
Yes. While some platforms have agreements with certain municipalities to collect and remit TOT on your behalf, this is not universal across all of California. The property owner or operator holds the ultimate legal responsibility for compliance and must verify whether the platform is handling remittance or if they need to do it themselves.
How do I register to pay Transient Occupancy Tax in California?+
You must register with the finance or tax department of the city or county where your rental property is located. The process usually involves completing a registration form to obtain a Transient Occupancy Registration Certificate, which must often be displayed in the rental unit.
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