Renting out your home? Residential rentals require collection of occupancy and tourism taxes
By Ashley Mackin
Residential rental websites like AirBandB.com, FlipKey.com and HomeAway.com make it easy for La Jollans to rent their seaside homes or apartments to out-of-town guests.
There are more than 100 listings in La Jolla on AirBandB and nearly 200 on FlipKey, where homeowners describe rentable rooms and residences with the price they want for one day or one month.
Seemingly simple, but some neighbors are asking if these property owners are following the letter of the law? Specifically, three letters: T.O.T.
All residential rentals are subject to the same San Diego Transient Occupancy Tax (T.O.T.) and Tourism and Marketing District (T.M.D.) assessments imposed on hotels. The city treasurer’s office is the department responsible for administering and collecting these taxes.
Property owners who list on residential rental sites must obtain a T.O.T. Certificate Number for their property, according to the city treasurer’s office, so that the department can expect assessments. The amount due would reflect how long the property was rented during a given time.
Tess Morton, a spokesperson for FlipKey.com explained its policy. “Each owner and/or property manager is responsible for keeping
themselves up-to-date and educated on the local laws in their community, as it relates to short-term rentals and taxes,” she told La Jolla Light. “FlipKey provides a specific field for the owner and/or property manager to input the tax rate, which is disclosed in the rates section on the site across all of the listings.”
Several property managers, who’ve listed homes, include and identify T.O.T. in the rental fees.
All “hotels” in the city of San Diego must pay T.O.T. assessments based on the number of rooms. Hotels with less than 29 rooms must pay 10.5 percent for T.O.T. and 0.55 percent of assessable rent for T.M.D. fees.
Per the City of San Diego’s municipal code, “any structure or any portion of any structure. which is occupied or intended or designed for occupancy by transients for dwelling, lodging, or sleeping purposes, and is held out as such to the public” is subject to T.O.T. fees.
One notable exemption, however, is, “when the transient has exercised occupancy or was entitled to occupancy for one month or more.”
Should a property owner list and collect money on a rental without a T.O.T. Certificate, they could become subject to an audit, at which point penalties may incur. The city treasurer’s office said the penalty amount is determined on a case-by-case basis by the person or group performing the audit.
The application for a T.O.T. Certificate Number can be found at sandiego.gov/treasurer/pdf/tr172.pdf
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