Hotel / Motel Operator’s TOT
Transient Occupancy Tax (TOT), also known as a room tax or bed tax, is authorized under State Revenue and Taxation Code Section 7280, as tax revenue to local government and regulated within the City of Saratoga in accordance with Saratoga Municipal Code Article 5 to 25. The Code states that for the privilege of transient occupancy in any hotel, the City shall assess a tax in the amount of 10% of the rent charged by the operator. TOT is collected by the operator of the hotel at the time the rent is paid.
This guideline is provided in order to highlight specific requirements and simplify the remittance process. The full text of the Saratoga Municipal Code Article 5-25 should be referred to for further detail.
- Monthly/Quarterly Remittance
- Operator Duties
- Over 30 Consecutive Days
- Taxable Rent
- Taxes Held in Trust
Per section 5 to 25.020 (a): Hotel means any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.
Per Section 5 to 25.020 (b): Occupancy means the use or possession, or the right to the use or possession of any room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping purposes.
Per Section 5 to 25.020 (d): Rent means the consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction there from whatsoever.
Per Section 5 to 25.020 (f): Transient means any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty consecutive calendar days or less counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty days has expired. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this Article may be considered.
No transient occupancy tax shall be imposed in the following instances:
- Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided;
- Any officer or employee of the Federal or State of California Government when on official business.
- Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
Exemption Claim Form
All claims for exemption must be made at the time rent is collected and under penalty of perjury. Exemptions must be documented individually on the Government Agency Exemption Claim Form (PDF). This form is required for all qualified governmental exemptions and must be filled out entirely and legibly for the exemption to be valid. The original form, along with the appropriate documentation, must be kept on file with the hotel for a period of three years after the quarterly tax return is filed and is subject to inspection. Submit a copy of completed forms with your monthly/quarterly tax return.
Monthly/Quarterly Remittance of Taxes to City
The monthly or quarterly tax return and tax remittance payment must be received by the City on or before the last day of the month following the close of each calendar quarter. The monthly or quarterly tax return will be comprised of the following items:
City of Saratoga
13777 Fruitvale Avenue
Saratoga, CA 95070
As the operator of a commercial lodging establishment and pursuant to the Municipal Code, you are responsible to:
- Maintain a current Business License with the City.
- Collect the Tax from each guest at the time the rent is paid. The amount of tax shall be separately stated from the amount of rent charged and receipt for payment must be provided to each paying guest. An operator may not advertise or suggest that the tax will not be added to the rent, will be absorbed by the operator, or will be refunded (except as provided in the Municipal Code).
- Keep and preserve all hotel tax records which are necessary in the Tax Administrator's judgment to determine the amount of the tax charged for a minimum of three years after the tax return is filed. The Tax Administrator shall have the right to inspect these records at all reasonable times.
- File a monthly or quarterly tax return on the provided forms and remit the amount of taxes due to the City.
Individuals Staying More than 30 Consecutive Days
Rentals exceeding 30 consecutive days are exempt from transient occupancy tax. Supporting documentation, including the Over 30 Consecutive Day Exemption Claim Form (PDF), must be kept on file with the hotel for a period of three years and is subject to inspection. This form is required for all exemptions for stays over 30 consecutive days and must be filled out entirely and legibly for the exemption to be valid. The original form must be kept on file with the hotel for a period of three years after the tax return is filed and is subject to inspection. Submit a copy of completed forms with your monthly/quarterly tax return.
TOT is due on all fees and charges necessary, or mandatory, for occupancy of a room. Non-rent items are not subject to TOT, but must be listed separately on the guest's receipt and in the hotel operator's records in order to be exempt from TOT.
Charges Subject to TOT
- Basic room charge
- Charges for equipment (roll-away bed, crib, etc.)
- Mandatory fees (i.e. extra person fees, pet in room fees, late check-out fees, resort fees, reservation fees, forfeited deposits, etc.)
- Trade in lieu of rent (i.e. occupancy paid for with an exchange of goods, labor, etc.)
Charges Not Subject to TOT
- Food products and beverages subject to California Sales and Use Tax
- Parking or valet charges
- Other non-rent items such as phone calls, Internet connection fees, etc.
Taxes Held in Trust
All Transient Occupancy Taxes owed by the transient and collected by the hotel operator are to be held in trust for the City of Saratoga until such payments are remitted to the City. At no time shall they be used for any other financial obligation or purposes.
Trade in Lieu of Rent/Lodging Payment
Hotel occupancies being exchanged for goods, labor, or otherwise are subject to TOT. The transient occupancy tax is computed on the monetary value of the exchange.