Transient Occupancy Taxes FAQs

Question 1: What is Transient Occupancy Tax (TOT?)

Transient Occupancy Tax is a tax on occupancy in structures used for lodging or sleeping purposes by a transient. A structure includes, but is not limited to, any hotel, inn, tourist home or house, motel, studio and bachelor hotels, lodging and rooming house, apartment house, public or private clubs, and mobile homes or house trailers at a fixed location not operated by a local government.

Question 2: Who is considered a "Transient"?

The individual staying at any hotel, motel, or vacation home is a transient, if that individual is occupying the structure for periods of thirty (30) consecutive days or less.

Question 3: What is the current TOT rate?

Effective January 1, 2017, transients are required to pay a twelve (12) percent tax of the taxable rent charged.

Question 4: What is considered "taxable rent"?

Basic room charge or any amount reflected as “rent” on the guest’s receipt, charges for rollaway beds or cribs and forfeited deposits and/or cancellation/no shows charges are all subject to TOT.

Question 5: Who is considered an "operator"?

The person who is the owner or proprietor of the hotel, motel, or vacation home is the operator. If the owner/proprietor delegates its duty to a managing agent, the managing agent is also the operator.

Question 6: Does an operator need to register with the County Tax Collector?

Within thirty days after commencing business, each operator of any hotel or vacation home, located in the unincorporated areas of Santa Barbara County, renting occupancy to transients shall register with the Tax Collector and obtain a “Transient Occupancy Tax Registration Certificate“ to be posted at all times in a conspicuous place on the premises.

Question 7: What is a TOT Registration Certificate?

This certificate signifies that the operator has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the County Tax Collector for the purpose of collecting from transients the TOT and remitting this tax to the Tax Collector’s office.

Question 8: What is the responsibility of the operator?

Each operator must report to the Tax Collector’s office on a monthly TOT return form, showing total rents charged and the amount of taxes collected. All taxes collected are to be remitted to the Tax Collector’s office by the last day of the month following the close of each reporting period.

Question 9:  When is TOT return delinquent?

As an example, the twelve-percent tax collected in the month of May, and the completed return form for that month, must be mailed to the Tax Collector’s office with a postmark date not later than June 30th.  Whenever the last day of the month falls on a weekend or federal holiday, then a postmark of the next workday is acceptable. Returns postmarked on or after July 1st will be delinquent and results in 10% penalty and one-half of one percent (1/2 of 1%) interest. If payment of the tax is delinquent more than 30 days, an additional 10% penalty will be added plus interest at the rate of 0.05 percent per month.

Question 10:  What if there were no taxes collected for a specific month?

A tax return is due each month, even if no taxes were collected for that period. Operators are still required to submit a return showing $0 due for that specific month.

Question 11:  Who is exempt from TOT?

– Permanent Residents
– U.S. Government (may be exempt if certain conditions are met)
– Certain Diplomats
– Certain Federally Chartered Organizations

Question 12:  Who is considered a "permanent resident"?

TOT only applies to those individuals that come under the definition of a “Transient” pursuant to Santa Barbara County Code Section 32-11.  If any individual stays thirty-one (31) consecutive days or longer, the individual is no longer a transient and the TOT does not apply to them.

Question 13:  What are the requirements for U.S. Government employees to qualify for TOT exemptions?

Only U.S. Government employees on official business are exempt from TOT, not state or municipal. The federal government, or the federally chartered agency, must either pay directly, or the employee may pay with a credit card issued by the federal agency to the employee. Federal employees on vacation are not exempt. A Federal Exemption Claim form must be signed by both the Federal employee and hotel/motel staff. A copy of this claim form must accompany the TOT return.

Question 14:  What form of identification does a Diplomat show to be exempt from TOT ?

Pursuant to international law and under domestic authority of the 1982 Foreign Missions Act (22 USC 4301, et seq.), the Diplomatic Tax Exemption Program administered by the Office of Foreign Missions (OFM) grants exemptions from the payment of all state and local restaurant, sales, lodging, and similar taxes to eligible foreign missions and their personnel in the United States. Please visit the OFM web site at www.state.gov/ofm.

Question 15:  Which Special Organization are exempt from TOT?

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 company employees on official government business.

Question 16:  How does an operator request a refund from the County Tax Collector?

If an operator charges TOT to a transient and submitted tax to the Tax Collector, but the transient later became a permanent resident a refund may be requested from the Tax Collector. A refund claim form must be completed along with supported evidence/proof of taxes not collected from transient/permanent resident.

Question 17:  How long must an operator keep their TOT records?

Chapter 32, Article II- Sec 32-19 requires operators to retain all records related to booking revenue, registration records, etc for a period of three years. The Tax Collector’s office shall have the right to inspect and audit these records at all reasonable times.

Question 18:  When can an operator expect to be audited?

Financial audits of operator’s business are usually every three years, unless the operator fails to submit monthly TOT returns for three or more consecutive months. In this case, an audit will be conducted sooner than the three year cycle

Question 19:  What if an operator ceases renting to transient?

The operator should contact the Tax Collector’s office at (805) 568-2927 of any changes to its business. Returns and payments are due immediately to the Tax Collector upon cessation of business for any reason (sale, bankruptcy, renovation, etc). The operator must either put his/her statement in writing that he/she will no longer rent to transients or complete a form provided by the Tax Collector. An audit of the operator’s financial records may follow shortly.

Question 20:  California Revenue & Taxation Code Section 7283.51

Notwithstanding any other provision of law, except in the case of fraud or the failure of a property owner to file a transient occupancy tax return, a city, county, or city and county may institute an action to collect unpaid transient occupancy taxes within four years of the date on which the transient occupancy taxes were required to be paid.