Transient Occupancy Tax
Considerations
Santa Monica City Council
July 14, 2026
Item 11-A
July 14, 2026
Item 11-A
July 14, 2026
Background
• The City’s current Transient Occupancy Tax (TOT) regulations were last adjusted in 2022 when voters approved Measure CS
• That action established the current 15% TOT rate for any “person” who books a hotel room stay for up to 30 days • Our municipal code defines “person” for the purposes of TOT collection to include “[a]ny individual, corporation, company, association, firm, copartnership, or any group of individuals acting as a unit.” • Based on our current TOT protocols, any stay of more than 30 days would be exempt from paying any TOT, for the entire duration of the that stay
• Through our ongoing work with Olympic-affiliated organizations, staff has identified that there could be a significant number of corporate room block bookings that extend beyond 30 days during the 2028 Games
• Our current TOT scheme means that if no change is made, the City could face an adverse fiscal circumstance during the 2028 games, from a TOT collections perspective Item 11-A
July 14, 2026
Item 11-A
July 14, 2026
Potential Scale of the Impact
• To give a sense of the financial scale of this potential TOT issue, consider the following scenario:
• A corporate block of 100 rooms gets booked
• The rate is $500 / room per night, for 45 days
• Because the duration of that corporate block of rooms extends beyond 30 days, the TOT charge that would be exempted would be $337,500 Item 11-A
July 14, 2026
Item 11-A
July 14, 2026
Options Available to the City
• This TOT issue related to corporate room bookings of more than 30 days can be addressed by updating our municipal code definitions • However, to make that adjustment to our TOT regulations, voter approval of a ballot measure would be required
• If the City Council is interested in pursuing that ballot measure, staff would have to bring the proposed measure forward for consideration at our July 28 meeting, in order to qualify for the November 2026 ballot • Staff would engage with our hotel operators as part of our development of the ballot measure language, if we are directed to move ahead Item 11-A
July 14, 2026
Item 11-A
July 14, 2026
Staff Recommendation
• Staff recommends that City Council take the following action:
• Direct the City Manager and City Attorney to prepare ballot measure language to update the City’s TOT regulations in order to ensure that corporate block hotel bookings which extend beyond 30 days are still required to pay the City’s established TOT rate; and
• Direct that the City Manager and City Attorney bring the proposed measure back for formal review and consideration at the July 28, 2026, City Council meeting, to allow the City Council the option of placing the item on the November 2026 ballot for voter consideration.
Item 11-A
July 14, 2026
Item 11-A
July 14, 2026