Transient Occupancy Tax Increase - Measure C
City Attorney’s Impartial Analysis of Measure C: Transient Occupancy Tax Increase
Effective January 1, 2012, Measure C would increase the City’s Transient Occupancy Tax, commonly known as the “hotel tax,” from 10% to 12%. The hotel tax is charged by the City to guests at hotels located in Cupertino. The tax rate is computed by multiplying the room rate charged by the hotel operator by the tax rate percentage. For example, a guest paying a $100 hotel rate for one night stay would see their hotel tax increase from $10 to $12 if this measure is adopted. Guests with occupancies longer than 30 consecutive days are not subject to the tax. The tax is expressly authorized by State law. The tax was first imposed in 1965 and has been set at the rate of 10% since 1991.
The City estimates that the annual hotel tax revenues generated from the incremental increase will be approximately $450,000. Revenues from the hotel tax are paid into the City’s general fund. The revenue may be used by the City to fund any general fund purpose, including police (Sheriff), 911 emergency response, public works, capital improvements, maintenance of city streets, parks and recreation and for the library.
Hotel tax rates vary around the County from a low of 9% to a high of 14%. This tax measure imposes a general tax and will take effect if passed by a simple majority (50% +1) of voters casting a vote on the measure. If the measure does not pass, the hotel tax would remain at 10%.
Prepared by Carol Korade, City Attorney
The above statement is an impartial analysis of the proposed ordinance.
Draft Ordinance - Measure C, English
Draft Ordinance - Measure C, Chinese
Draft Ordinance - Measure C, Español
Draft Ordinance - Measure C, Tagalog
Draft Ordinance - Measure C, Vietnamese