Transient Occupancy Tax Frequently Asked Questions
1. What is Transient Occupancy Tax?
Transient Occupancy Tax (TOT), also known as "hotel tax" or "bed tax," is authorized under the State Revenue and Taxation Code 7280 as an additional source of non-property tax revenue to local government. This tax is levied at a rate of 12% for Hotel/Motels and 14% for Vacation Rentals in the unincorporated areas of Santa Cruz County. (Santa Cruz County Revenue and Finance Code 424.030)
2. Who needs to register for a Transient Occupancy Tax Certificate?
Within thirty days after commencing business, whichever is later, each operator of any transient occupancy facility, including any hotel, inn, tourist home or house, motel, studio hotel, lodginghouse, roominghouse, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other lodging in the unincorporated areas of the County of Santa Cruz renting occupancy to transients, shall register said transient occupancy facility with the tax administrator and obtain from him a "Transient Occupancy Registration Certificate" to be at all times posted in a conspicuous place on the premises. (Santa Cruz County Revenue and Finance Code 424.030)
3. Should I include the tax in my stated room rate?
No, Transient Occupancy Tax must be charged and tracked separately from the stated room rate.
4. How long should I maintain my records?
It shall be the duty of every operator liable for the collection and payment to the county of any tax imposed by this chapter to keep and preserve, for a period of three (3) years, all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and payment to the county, which records the Tax Collector shall have the right to inspect at all reasonable times. (Santa Cruz County Revenue and Finance Code 424.090)
5. How do I calculate the amount of Transient Occupancy Tax due?
The amount of the Transient Occupancy Tax due is 12% for Hotel/Motels and 14% for Vacation Rentals of the room rents received in the applicable reporting period. (Santa Cruz County Revenue and Finance Code 4.24.030)
Click here for a list of taxable items
6. How often do I need to pay Transient Occupancy Tax?
Each operator shall, on or before the last day of the month following the close of each calendar quarter, make a return to the Tax Collector, on forms provided by him, of the total rents charged and received and the amount of tax collected for transient occupancies. (Santa Cruz County Revenue and Finance Code 424.080)
7. Are any guests exempt from Transient Occupancy Tax?
No tax shall be imposed on (1) any person as to whom, or any occupancy as to which, it is beyond the power of the county to impose the tax herein provided; and (2) any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. No exemption shall be granted except upon a claim therefore made at the time the rent is collected and under penalty of perjury upon a form prescribed by the Tax Collector.
8. We did not have any guests during the most recent reporting period , or we are closed for the season, or all of our guests stayed over thirty (30) consecutive days. Do we still have to complete a return?
Yes. Regardless of whether any qualified rents are received for the reporting period, a return is required to be filed. (Santa Cruz County Revenue and Finance Code 424.080)
9. We plan to sell, or close, the business. What do we need to do about out Transient Occupancy Tax Certificate?
In either event, contact our office in person or by telephone so that we can assist you. If you plan on closing your business, then you must return your certificate to us. If necessary, our staff will assist you in preparing a final report. If you are selling the business, we will assist the seller and buyer with the transfer of the Transient Occupancy Certificate.
10. There has been a change in ownership or a change to other information contained on my registration form, what should I do?
Contact the Tax Collector’s office and request a new registration form or download the Registration form from this website. Complete the form with the new information and return it to the Santa Cruz County Tax Collector.
11. I misplaced my Transient Occupancy Tax reporting form and need a replacement, what should I do?
You may download a blank reporting form form from this website.
12. Are they any exemptions for Transient Occupancy Tax facilities of religious, educational, or charitable groupsTransient Occupancy Tax shall not apply to occupancy of a transient occupancy facility owned or operated by a religious, educational or charitable group and used for religious, educational or charitable purposes, which is not conducted for profit and no part of the earnings of which inures to the benefit of any private shareholder or individual. (Santa Cruz County Revenue and Finance Code 424.50)
13. Where do I mail my Transient Occupancy Tax return?
Santa Cruz County Treasurer-Tax Collector,
P.O. Box 5639,
Santa Cruz, CA 95063