By Jorge Casuso
July 31, 2026 – In an effort to boost City revenues during major special events, the City Council on Tuesday placed a measure on the November ballot that imposes a bed tax on corporate hotel bookings of more than 30 days.
Santa Monica's bed tax, or Transient Occupancy Tax (TOT) -- which is currently 15 percent for hotels and motels and 17 percent for homeshares -- is refunded when guests qualify as permanent residents by staying at least 31 consecutive days.
The measure the Council placed on the November 3 ballot keeps the existing transient occupancy tax rates unchanged, but authorize the Council "to establish defined Major Event Periods when the tax will apply to lodging paid for or obtained by corporations and other legal entities for stays over 30 days."
The change ensures that any TOT adjustment "would be temporary" and "clearly tied to a defined timeframe in which tourism activity is expected to surge for longer durations of time," City staff wrote in a report to the Council.
"Such temporary adjustments may be used when doing so is expected to meaningfully increase tourism, enhance visitor experience, encourage attendance, or support local business activity," staff said.
Hoteliers expressed concerns the proposed update could boost competition, since nearby destinations including Beverly Hills, Marina Del Rey, Long Beach and Huntington Beach all have TOT collection regulations that mirror those in Santa Monica.
To address the concerns, the local measure gives the Council the authority to adjust the TOT rate for hotels and motels to a rate of between 0 to the current 15 percent.
"Of note, there would no change to natural persons making hotel reservations on their own, as any such individual booking a room for more than 30 days would be subject to the same TOT regulations as currently exist," staff said.
In addition. the proposed update authorizes the City's Finance Director or designee to establish administrative regulations to administer exemptions for individuals who qualify as permanent residents who "face catastrophic circumstances."
The circumstances include "natural disasters, medical treatment or similar situations in which room rentals are paid by non-natural persons," according to staff.
"If approved, the ordinance would be modernized ahead of the 2028 Olympics to take into account evolving hotel booking patterns, particularly those involving corporate groups and long-term activations," staff wrote.
"The changes would also provide the Council with additional flexibility during any future major events similar in nature to the Olympics, while also looking to establish more defined pathways for exemptions for individuals experiencing catastrophic circumstances."
The City has been increasingly relying on tax measures to boost revenues as Santa Monica's economy continues to struggle.
Earlier this month, the Council placed a parcel tax measure on the November 3 ballot to fund local schools that would establish an annual parcel tax of $495 per taxable parcel within the city, with the amount adjusted annually for inflation.
The measure would replace funding currently provided by the City to the School District under a Master Facilities Use Agreement that expires on June 30, 2027.
Santa Monica voters have approved a total of seven tax measures in the last two General Elections, including Measure CS approved by voters in 2022 that raised the 14 percent TOT to 15 percent for hotels and motels and to 17 percent for homeshares, generating an estimated $4.1 million a year.