Transient Occupancy Tax (TOT)/Tourism Marketing District (TMD)

The City of San Diego taxes the occupancy of any structure or any portion of any 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.

The TMD assessment is levied on the Operator who may elect to pass the assessment to the Transient.

Both TOT and TMD are calculated as a percentage of the rent for the occupancy of the structure or any portion of the structure.

TOT and TMD Rates are as follows:

For information pertaining to TMD prior to September 1, 2016, please contact TOT Administration at sdtot@sandiego.gov  

Transient Occupancy Registration Certificate

If your property is located in the City of San Diego and is rented out to Transients for less than one month, you must obtain a Transient Occupancy Registration Certificate. Examples of lodging businesses subject to the TOT include:

• Hotels and Motels
• Short-Term Residential Occupancy properties of any kind (i.e. houses, condos, rooms, or spaces) rented directly by the owner/operator, by property management companies or via internet travel services
• Recreational Vehicle (RV) Parks and Campground

To obtain a Transient Occupancy Tax Certificate, you must submit a completed application in order to obtain a Transient Occupancy Registration Certificate.  Applications for a Transient Occupancy Registration Certificate may be submitted:

• Online through the Transient Occupancy Registration System
• Via email by submission of a completed  Application for Transient Occupancy Registration Certificate to the Office of the City Treasurer at sdtot@sandiego.gov
• By mailing a completed  Application for Transient Occupancy Registration Certificate to:    

Office of the City Treasurer
Attn: TOT/TMD Desk
PO Box 122289
San Diego, CA 92112-2289

Operators will receive the certificate via email once the application is processed. 

Operators are required to post the certificate at all times in a conspicuous place on the premises.    Additionally, beginning May 1, 2023, Operators renting their dwelling unit for STRO will also be required to included the TOT certificate number on all advertisements.  

The certificate number is the account number associated with the lodging business and should be referenced on all remittances and/or correspondence submitted to our office.

TOT and TMD Payment / Remittance

The TOT and TMD assessment must be remitted monthly and is due no later than the last day of the following month. For example, the TOT and TMD assessment collected in the month of April must be remitted by May 31. A penalty is due on all late payments. The penalty is 1 percent of the TOT and TMD assessment due for the first delinquent day, plus one-third (1/3) of 1 percent for each day thereafter, not to exceed 25 percent.

To assist with the calculation of the penalty percentage, see the  Penalty Table(PDF). The TOT and TMD assessment may be paid online, by mail or in person.

Regulations governing TOT are contained in the following legislation and guidance

•  San Diego Municipal Code, Chapter III, Article 5
•  Hotel Packages and Complimentary Services
•  California Supreme Court Opinion (In re Transient Occupancy Tax Cases)
•  TOT Rent Definition Clarification
•  TOT Operators’ Duties and Accounting Procedures 
•  TOT Operators’ Records and Inspection of Such Records 
•  TOT Administrative Remedies and Appeals

Regulations governing the TMD assessment are contained in the following legislation and memorandums

•  San Diego Municipal Code, Chapter VI, Article 1
•  TMD Resolution, Document No. RR-303226
•  TMD Resolution, Document No. RR-307843
•  TMD Resolution, Document No. RR-310664

The San Diego Municipal Code allow for various exemptions from TOT; these include:

• When the Transient has exercised Occupancy or was entitled to Occupancy for one month or more;
• When the total rental charge at the lodging business is twenty-five dollars ($25.00) a day or less or the accommodations rented are in a dormitory and the total Rent for each Transient is twenty-five dollars ($25.00) a day or less;
• When the Transient is by treaty, or federal law, or state law exempt from payment of transient occupancy taxes (see information regarding US State Department Tax Exemption Program);
• When Rents are directly paid to the lodging business by the United States Government or the State of California or their respective instrumentalities.

An exemption chart has been created to assist lodging businesses in determining if a transient are exempt.

For those Transients that the lodging business has determined are exempt, a TOT Exemption Application should be completed by the lodging business staff and maintained as part of their accounting records.

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 sdtot@sandiego.gov.

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 sdtot@sandiego.gov.

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 sdtot@sandiego.gov 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.   

Examples include:

• 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.   
 

Disclaimer

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.

• TOT (and TMD) is applicable to those lodging businesses (hotels, STRO properties, RV parks, etc.)  within the City of San Diego georgraphic limits.   To determine if your property is within the City of San Diego, please visit the interactive City of San Diego Council District map.   For information on TOT in other municipalities, please visit the County of San Diego's TOT page and/or the webpage for your respective municipality.  
• The City also assesses a Rental Unit Business Tax on any owner who rents residential property within its jurisdiction.   Additional information can be found on the Rental Unit Business Tax Webpage.
• A Short-Term Residential Occupancy (STRO) license is required for all STRO of a dwelling unit, or part thereof, for less than one month within the City of San Diego.   Additional information can be found on the STRO Webpage.
• A list of active TOT vacation certificates can be found on the Open Data portal at:  http://data.sandiego.gov/datasets/tot-establishments/.