G.13 - Transient Occupancy Tax PresentationTransient Occupancy Tax
MAY 24, 2022
State Law
Revenue & Taxation Code Section 7280 et seq.permits the
City to adopt a transient occupancy tax imposed upon the
privilege of occupying a room or rooms, or other living
space, in a hotel, inn, tourist home or house, motel, or
other lodging.
Proposed Transient Occupancy Tax
Measure
1.The proposed transient occupancy tax measure proposes a
general tax.
2.If adopted by the voters, the transient occupancy tax would
provide a maximum tax rate of 10% of hotel charges.
3.Estimated annual revenue is between $10,000 and $250,000.
4.The proposed transient occupancy tax ordinance also allows the
City Council to adjust the tax rate by resolution, provided it does
not exceed the voter-approved 10% maximum.
5.All taxes must be submitted to voters for approval.
Election Resolutions
3 resolutions must be considered/adopted by the City Council as follows:
1.A resolution calling the election for the measure on November 8, 2022,
sending the measure to the voters for their consideration on November 8,
2022, and requesting that this measure/election be consolidated with the
Statewide election held on the same date.
2.A resolution authorizing direct arguments and requesting an impartial
analysis from the City Attorney.
3.An optional resolution authorizing rebuttals.
Ballot Question
1.“Shall the measure, establishing a general Transient Occupancy Tax imposing
a maximum tax rate of 10% of hotel charges upon guests staying in hotels (as
defined) and generating approximately $10,000 (current estimate) to
$250,000 (if a major hotel is developed within the City of Grand Terrace) in
annual revenue until ended by voters, be adopted?”
2.This can be changed subject to the following:
a.No more than 75 words.
b.Must include the amount of money to be raised annually and the rate and
duration of the tax to be levied.
c.Must be a true and impartial synopsis of the purpose of the proposed measure,
and must be in language that is neither argumentative nor likely to create
prejudice for or against the measure.
Argument Authorization
1.The second resolution authorizes, but does not require, all
councilmembers to write arguments concerning the ballot
measure. It also sets priorities for choosing of arguments.
2.However, the City Council may, instead, authorize certain
councilmembers to write arguments.
3.If three or more Councilmembers jointly write a ballot argument,
then the Brown Act will require the collaboration to occur at a
noticed public meeting.
Rebuttal Arguments
1.The third resolution authorizes rebuttal arguments to the
primary/direct arguments.
2.These are optional under state law and are allowed at the
discretion of the City Council.
3.If the City Council does not desire to authorize rebuttal
arguments, then Council should not approve this third election
resolution.
Procedures for Submission
1.Because this is tax measure, two-thirds (i.e., 4 Councilmembers) vote of all members of the
City Council (Gov’t Code §53724(b)) will be required to pass the resolution to order the
submission of the proposed measure to the voters.
2.Passage of the measure will require approval by a majority of the voters.
3.The proposed taxes will generate revenue, deposited in the general fund, available for any
general governmental purpose. Thus, the taxes are considered “general taxes.” Under
Proposition 218, the levy of a new general tax must be approved by a majority of voters. (Cal.
Const. art. 13C, §2(b).).
4.The estimated cost of sending this measure to the voters is $15,000.
Questions?