Transient Occupancy Tax

The Santa Barbara South Coast Tourism Business Improvement District (TBID) Assessment, developed by Visit Santa Barbara and Santa Barbara South Coast lodging businesses, is an assessment district that provides specific benefits to payors by funding programs that specifically benefit assessed businesses. The TBID is assessed at the rate of 2% of all room revenue. The TBID Assessment is not assessed on any other charges or on conpensated rooms. For more information related to the TBID assessment, contact Visit Santa Barbara.

Visit Santa Barbara                               Website: SantaBarbaraCA.com
500 E. Montecito Street                        Phone: (805)966-9222
Santa Barbara, CA 93103

Hotel: Any structure, any portion of any structure, or any property or portion thereof which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, overnight recreational vehicle and camping park (as defined in Titles 28 and 30 of this code), or other similar structure or portion thereof.

Short Term Rental: (STR) is a property that's rented out for a period of less than 30 days. STRs can be a whole home, a room, or an accessory building. They're also known as vacation rentals, transient rentals, or resort dwelling units.

Rents: The consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. (SBMC 4.08.020)

Occupancy: The use or possession, or the right to the use or possession of any room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping purposes. (SBMC 4.08.020)

Transient: Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days.  Any such person so occupying space in a hotel shall be deemed to be a transient until the period of 30 days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy; provided that an occupant of an apartment unit, constructed under a building permit as such, or in buildings which have been legally converted into apartments, shall not be deemed to be a transient if his or her occupancy is for a period of more than 30 days and with or without such written agreement. (SBMC 4.08.020)

1. Total Rental Charges Subject to TOT: This amount is to include the total rent charged, whether or not received, during the reporting period, without deductions. This total should include, but is not limited to, room revenue, resort or destination fees, cleaning fees, non-refundable deposits, cancellation charges, group attrition charges, pet fees, in-room equipment rental fees, and parking fees.
2. Allowable Deductions: Deductions are allowed only for room occupied for more than 30 days (enter on line 2a of the remittance form) and for stays occupied by federal employees on official business (enter on line 2b of the remittance form). Any reported deductions must be occompanied by a Claim for Exemption form with the appropriate supporting documentation.
3. Taxable Rents: Subtract the allowable deductions from the total rental charges to determine the taxable rents.
4. TOT Due: The TOT rate is 12% of the total taxable rents. Multiply line 3 by 12% to calculate the TOT tax due.
5. Total Rental Charges Subject to TBID: This total should only include all charges paid by a transient to the hotel for the occupancy of a room only, without any additional fees.
6. Allowable Deductions: Subtract the allowable deductions from the room revenue only to determine the total taxable rents for the TBID assessment.
7. TBID Due: The TBID rate is 2% of the total taxable rents of room revenue only. Multiply line 6 by 2% to calculate the TBID due.
8. Total TOT + TBID Due: Add lines 4 and 7 together to determine the total TOT + TBID due, before penalties, interest, or adjustments are applied.
9. Penalty: The penalties are assessed at the rate of 10% on the first day payment is delinquent.
10. Additional Penalty & Interest: An additional 10% is added 30 days after the delinquent date. The penalty rate does not exceed 20% of the TOT due. Interest is assessed 30 days after the delinquent date. Interest is added at the rate of 0.5% each month, increasing by ½ of one percent each month past delinquency. Contact the Finance Accounts Receivable Office to help determine the penalties and interest due, if applicable.
11. Adjustments: Adjustments may be considered for a credit or balance due from a previous reporting period. Adjustment amounts must be accompanied by supporting documentation, such as a letter from the City of Santa Barbara or associated auditors.  If a credit is due to an overpayment, write the total as a negative amount. If a balance from a previous period considered, write as a positive amount. This will be added to the grand total.
12. Total Monthly Tax Due: Add all lines of tax due with penalties and interest to determine the total amount needed to remit for the reporting period.

• room revenue
• resort or destination fees
• cleaning fees
• non-refundable deposits
• cancellation charges
• group attrition charges
• pet fees
• in-room equipment rental fees
• parking fees
• no-show fees
• Early check-in fees
• Late check-out fees
• Upgrade room charges
• Damages/stolen items
• Smoking fees
• Violations of hotel policy
• California Tourism Assessment Fee (CTAF) effective July 1, 2025

Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax. Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent, shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed. (4.08.080, 4.08.090)

In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one-half of one percent per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first become delinquent until paid. (4.08.110)

The Director of Finance may approve a waiver of for one tax period’s (one month’s) late penalties and interest. This request must be submitted in writing and submitted to the Finance Accounts Receivable office. Only one penalty waiver will be granted per account.

All hotels, motels, and short-term rentals operating within the city are required to register with the Finance Accounts Receivable Office within 30 days of commencing operations. Upon registration, a Transient Occupancy Registration Confirmation letter will be issued. This letter includes the operator's business name, the property address, the effective date, and the assigned TOT registration number. The TOT registration number is required on the monthly remittance form.

This Transient Occupancy Confirmation Letter signifies that the person named on the face hereof fulfilled the requirements of this chapter by registering with the Director of Finance for the purpose of collecting from transients the transient occupancy tax and remitting the tax to the Director of Finance. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a hotel without strictly complying with all local applicable laws, including, but not limited to, those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit. (SBMC 4.08.060)

It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Director of Finance shall have the right to inspect at all reasonable times. (4.08.150)

After a customer has occupied a room for 30 consecutive days, beginning with the 31st day and continuing subsequent days, the customer is exempt from paying the Transient Occupancy Tax. Additionally, when a customer has made reservations in advance, and executed a written contract for a successive or uninterrupted stay exceeding 30 days, the customer is exempt from the tax for the entire stay.

Certain government organizations and other entities have been granted special exemption by the U.S. Congress and under Public Law. Exemptions are given to AMTRAK, the American Red Cross, the U.S. Postal Service, Federal Credit Unions, and insurance companies.

Diplomats (with the appropriate U.S. Department of State identification card as shown in the attached Diplomatic Tax Exemption Program card sheet.)

• In 1982, the United States Congress passed a law under which foreign missions, diplomats and certain other categories of persons, living or traveling in the United States on official business for their government, are granted an exemption from the payment of all state and local restaurant, sales, lodging, and similar taxes. The U.S. Department of State issues an identification card that verifies these individuals and their tax exemption entitlement.

U.S. Government (when payment is made directly by the U.S. Government on a purchase order or the individual pays for lodging with a credit card issued by the U.S. Government.) Only federal agencies are exempt -- not state or municipal. Even if the individual claims he/she is a member of a federal agency and is travelling on official business, if the lodging is paid for with a personal credit card or cash/check, the individual must pay the tax and submit a claim for refund (see below) directly to the City.

If you accept an exemption, based on strict compliance with the City’s exemption criteria, please provide the information on your monthly Transient Occupancy Tax Return. Include the room charge in the total rents reported on Line “A” and report the tax exemption amount on Line “B”.  To substantiate this amount, provide either a copy of:

1. the federal purchase order or credit card, or
2. the individual’s official identification card (in some cases both front and back will be needed) and a copy of the individual’s bill or itemization of the account.