Transient Occupancy Tax

Transient Occupancy Tax, also occasionally referred to as a “bed tax” is authorized by Section 7280 of the State Revenue and Taxation Code, and acts as an additional source of revenue to the City of Arcata (as it does in most cities). As stated in the Municipal Code for the City of Arcata: “For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 10% on the amount charged by the (hotel) operator”.

Definitions

For the purpose of the explanation of Transient Occupancy Tax below, please use the following definitions:

• Hotel
  Defined as any structure or any portion of the structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel or bed & breakfast 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 or motor home at fixed a fixed location, or other similar structure or portion thereof.
• Transient
  Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license of 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 unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy.

How to Register / Pay Transient Occupancy Tax

Within 30 days after commencing business, each operator of any hotel renting occupancy to transients shall register said hotel with the Finance Director and obtain a Transient Occupancy Registration Certificate (PDF). Anyone conducting business within the Arcata city limits is required to have a City of Arcata Business License. Apply for a Business License online at https://arcata.hdlgov.com/ or fill out a Business License Tax Certificate Application (PDF) and SB 205 Stormwater Discharge Compliance Form (PDF) and return it to the Finance Department with proper payment. 

Each quarter thereafter, each operator shall file a Transient Occupancy Tax Return to the Finance Director, showing the total rents charged and received and the amount of tax collected for transient occupancies. Operators of 5 or more units should complete the Transient Occupancy Tax Return 5+ Units (PDF - Fillable). Operators of 4 or less units should fill out the Transient Occupancy Tax Return 4 or Less Units (PDF - Fillable). It is the operator's responsibility to complete the correct form, failure to complete the correct form could lead to an improper payment of T.O.T to the City. Also reported are the total number of rooms available for rent, total number of rooms occupied and percentage of rooms occupied. Please reference the Items Subject to Transient Occupancy Tax (PDF) and Transient Occupancy Return Instructions (PDF) for assistance in completing return(s). 

At the time the return is filed, the full amount of the tax collected shall be remitted to the Finance Department. These returns are due on or before the last day of the month following the close of each calendar quarter, or shorter reporting period, as directed by the Finance Director.

The Finance Director may establish shorter reporting periods for a certificate holder if deemed necessary in order to ensure collection of the tax. Returns and payments are due immediately upon cessation of business for any reason.

If there has been no tax collected for a given period, the operator is still required to file a tax return with the Finance Director. For all exemptions claimed, please submit the following forms with your tax return (Please note: There are two forms within this link): TOT Exemption Report (PDF). 

For a complete explanation of the Transient Occupancy Tax, please see the City of Arcata Municipal Code, Title VI - Business, Professions and Trades, Chapter 3 - Transient Occupancy Tax.