1. What is TOT?
The City of San Diego taxes the occupancy of any structure or any portion of any structure. TOT is calculated as a percentage of the rent for the occupancy of a structure or any portion of the structure. The law requires that Operators collect the tax from Transients. Operators hold TOT collected in trust and remit the TOT to the City Treasurer every month. If the Operator fails to collect the tax, the Operator is liable to the City for the amount of the tax due on the amount of taxable rent for the occupancy of the structure or any portion of the structure as if the Transient had paid the tax.
2. What is a Transient?
A Transient is any person that rents any structure or any portion of any structure for less than one month.
3. What is the TMD assessment?
The purpose of the TMD assessment is to promote events and tourism in the City of San Diego. Effective Sept. 1, 2016, the TMD assessment is levied on lodging businesses with 70 or more rooms. For the period Jan. 1, 2013, through Aug. 31, 2016, the TMD assessment was levied on all lodging businesses. The Operator may elect to pass the TMD assessment on to the Transient.
4. Can the TOT and TMD assessment be combined on the guest folio (as 12.5%, for example) and reported as a combined total to the City?
No. TOT is a tax collected from the Transient and the TMD assessment is levied on the lodging business. The TMD assessment may be passed on to the Transient but must be shown as a separate line item on the folio/receipt. The TOT and TMD assessment must also be reported separately on the monthly return submitted to the City.
5. How do I apply for a certificate number?
Applications for a Transient Occupancy Registration Certificate may be submitted online. Operators will receive the certificate via email once the application is processed. The number provided on the certificate is the account number associated with the lodging business and should be referenced on all remittances and/or correspondence submitted to our office. Operators may also complete and submit the Application for Transient Occupancy Registration Certificate via email to the Office of the City Treasurer at email@example.com.
6. I rent out a room in my condo via an internet website; is my rental subject to the TOT and TMD assessment?
If you are renting a room for less than one calendar month, the rental is subject to the TOT. If you rented a room during the period January 1, 2013 through August 31, 2016, then the TMD assessment of 0.55 percent was also applicable.
The method used to advertise and/or book rentals, whether through a property management company, an online service (such as Vrbo or Airbnb), is not a determining factor. The San Diego Municipal Code (SDMC) requires Operators and/or Owners to obtain a Transient Occupancy Registration Certificate if renting to a Transient. This certificate number is used when remitting the TOT and TMD assessment to the City. For additional questions, please contact our office at 619-615-1530 or firstname.lastname@example.org.
7. I rent my personal residence (or portion of) to Transients. Other than the TOT, is there any other tax or fee that I need to remit to the City?
Property owners who rent out all or a portion of their property for more than 6 days in a calendar year are responsible for remitting Rental Unit Tax to the City of San Diego. Rental Unit Tax is assessed annually, on a calendar year basis, upon anyone who owns, operates, or manages the rental of any residential real estate. This includes single family residences, multiple family residences, mobile homes, trailers, apartments, bungalows, hotels, motels, and any property advertised or otherwise held out for lease or rent during the calendar year. For more information, visit: www.sandiego.gov/treasurer/taxesfees/btax.shtml
Additionally, the Short-Term Residential Occupancy (STRO) Ordinance requires a license for all STRO of a dwelling unit, or part thereof, for less than one month within the City of San Diego beginning May 1, 2023. For more information on the Short-Term Residential Occupancy requirements, visit: https://www.sandiego.gov/treasurer/short-term-residential-occupancy.
8. I have a neighbor that is renting his/her residence to Transients. I don't think they are collecting/remitting the TOT. What can I do?
Contact the Office of the City Treasurer's TOT/TMD Administration desk at 619-615-1530 or email@example.com and provide us as much information as possible (e.g. address of rental, owners name and contact information).
9. Are cleaning fees taxable?
It depends on the nature of the charge. If the fee is non-refundable, it is part of what the guest pays for occupancy (i.e. rent) and is therefore subject to the TOT, and, if applicable, the TMD assessment. Conversely, if the cleaning fee is fully refundable with funds withheld only for specific damages, it is not subject to the TOT and TMD assessment.
10. How do I determine if a Transient is exempt from the TOT and TMD assessment?
The guest must provide official government business travel orders and a qualifying picture ID. You can verify if their government agency is listed on USA.gov (link is external). You may also find the TOT Exemption Chart helpful. Once verified, the guest must complete the TOT Exemption form; the operator must sign the TOT Exemption form and retain the completed form for audit purposes. Also note, non-profit companies and state officials (other than California) traveling on state business are not exempt from the TOT and TMD assessment.
11. I just became aware that my property is subject to the TOT and TMD assessment. I am voluntarily coming forward to get caught up on taxes/assessments owed. Can you waive penalties?
No, we do not have the authority to waive penalties; penalties are governed by SDMC §35.0116 .
12. As a Property Management company, do I have to remit a return for each property I manage?
No, property management companies do not have to remit a separate return for each property they manage. Property management companies may elect to remit their return information on a summary return ( sample summary return for periods prior to Sept. 1, 2016 (EXCEL) sample summary return for period after Sept. 1, 2016 (Excel) ). Please ensure the summary return includes monthly totals per property and the corresponding Transient Occupancy Registration Certificate numbers.
13. How do I remit my TOT and TMD assessment return?
There are three ways to pay: online, by mail, or in person.
14. If I rent my home to guests for a minimum of 30 days, do I have to collect TOT?
It depends. Operators are required to collect TOT from Transients. As defined in FAQ number 2 above, a Transient is any person who rents any structure or any portion of any structure for less than one month. A month is defined as the period of consecutive days from the first calendar day of occupancy in any month to the same calendar day in the next month following, or the last day of the next month following if no corresponding calendar day exists. This may or may not be 30 days.
- If a guest checks in on January 1 and checks out on January 31, they are not exempt from TOT.
- If a guest checks in on February 3 and checks out on March 3, they are exempt from TOT.
- If a guest checks in on August 31 and checks out on September 30, they are exempt from TOT.
15. I am either selling my hotel or STRO property and will no longer be renting to Transients. What do I need to do for TOT purposes?
For hotel properties: you should notify our office immediately by phone and email and provide the planned dates for ceasing operations and the name and contact information of the person or company that will continue the business operations. We will arrange for a closeout audit to be performed. Keep and maintain all records for the audit. You should also notify the successor of all TOT requirements including monthly reporting and the need to update the registration for the TOT Certificate.
For STRO properties: you should notify our office of your intentions to cease operations and then review your records for the time period that you rented to transients to make sure you have reported and remitted all tax due. The SDMC allows the City Treasurer to inspect your records to determine the amount of tax due to the City.
16. What do I do if I over remitted TOT last month?
You may take a credit on future tax returns up to the amount of the over remittance and keep records to document the amount and reason for taking the credit. In the present month, you would calculate TOT and TMD as you do normally and then enter a credit amount on the standard TOT return at line 5 for TOT and at line 10 for TMD. If you report and remit using TOT Online Pay, then enter the credit amount in the fields named "Less TOT Credit/Refunded to Non-Transients:" and "Less TMD Credit/Refunded to Non-Transients:". With either reporting format, the credit amount taken in any month cannot exceed the tax due for that month so you may need to take the credit over more than one month. Note that the TOT Online Pay application will not accept a transaction for less then $0.01 so carefully enter credit amounts on the online form.
These answers to frequently asked questions are presented for general guidance only. They do not provide specific advice about a particular set of facts and may not be relied upon as a defense to a complaint alleging any violation. Please refer to Article 5: Transient Occupancy Tax code and/or Article 1, Division 25: San Diego Tourism Marketing District Procedural Ordinance of the San Diego Municipal Code for the applicable law.