Santa Monica Proposes New Hotel Tax
Posted by Michael Lambrose on Oct 30, 2012 - 12:51:35 PM
SANTA MONICA—The Santa Monica City Council is exploring the option of levying an additional tax on hotels with the average daily rate of over $100.Revenue gained from the new tax would provide additional funding for the Santa Monica Convention and Visitors Bureau (CVB), a non-profit corporation that is focused on increasing tourism in the city.The CVB, which received over $2.5 million in 2012 from Santa Monica, is financed almost entirely by the city.
If the new tax is adopted, hotels within Santa Monica’s city limits with an average rate of $100 or more would have to charge guests a $2 surcharge.Hotels that charge over $200 or $300 would be forced to charge an additional $3 or $4 respectively.Each rate, however, could be increased by as much as $0.25 a year.
According to City Council documents, revenue gained from tourism provides vital income for Santa Monica.The Transient Occupancy Tax (TOT) alone provided the city with $36 million in taxes during the financial year of 2010/2011.The proposed resolution is intended to establish sustainable funding for the CVB in lieu of the city’s current budgetary constraints.
The proposed new tax has the support of 68 percent of the hotels that would be subjected to the new tax.If the Santa Monica City Council does approve this new tax, however, these establishments will be allowed to protest it.If the majority of hotels oppose the tax, it will not be implemented.
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