Transient Occupancy Tax: Definition and Explanation
Transient Occupancy Tax, also known as a Bed Tax, is a type of tax imposed by the City or County on the occupants of short-term lodging facilities such as hotels, motels, and vacation rentals. This tax is added to the price of the room and is collected by the lodging operator at the time of payment, who then remits the tax to the local government.
The purpose of the Transient Occupancy Tax is to generate revenue for the City or County from the visitors who use the lodging facilities while visiting the area. This revenue is utilized for various purposes such as promoting tourism, improving the local infrastructure, and funding public services.
The amount of Transient Occupancy Tax varies from one City or County to another and is usually calculated as a percentage of the room rate. The rate is determined by the local government and is subject to change.
It is important to note that the Transient Occupancy Tax is not a tax on the lodging operator but on the occupant of the room. The lodging operator is responsible for collecting and remitting the tax to the local government, but the tax burden ultimately falls on the guests who use the lodging facilities.
In summary, the Transient Occupancy Tax is a tax imposed by the City or County on the occupants of short-term lodging facilities, with the purpose of generating revenue for the local government from tourism and other related activities.
« Back to Glossary Index