Question: What would the revenue gain be from increasing the non-real estate and non-personal property tax rates that the City has the authority to raise (hotel occupancy tax, admissions tax, etc)? Were any of these revenue enhancements considered by staff in the development of the Manager’s proposed budget? (Councilman McPike)

Response: Question 1:

Question 2: 

No.  Both Sales Tax and the Transient Lodging Tax equally apply to Short Term Rentals and to hotels and motels.  The rates can not be different depending upon the type of rental. 

Sales Tax is paid on the room rental price.  The rate is 1% for our Local Sales Tax (General Fund revenue) and 5% for the State Sales Tax.  The combined rate of 6% is charged to all room rentals and is fixed by state law. 

The City’s Transient Lodging Tax also applies to both Short Term Rentals and to hotels and motels.  They all pay the same rate of 6.5% of the room rental plus $1.25 per room per night.  Based on uniformity requirements and definitions in the State Code, we cannot charge one rate for Short Term Rentals and a different rate for hotels and motels. 

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