California SB 346: Short-Term Rental Tax Reporting and Audits

California’s SB 346, the Short-Term Rental Facilitator Act of 2025, is a tax-transparency law that lets cities and counties require platforms like Airbnb and VRBO to disclose property-level listing data so local governments can verify that transient occupancy taxes are being collected and remitted correctly. Authored by Senator María Elena Durazo and signed by Governor Gavin Newsom on October 13, 2025, it took effect on January 1, 2026, and was chaptered as Chapter 751 of the Statutes of 2025.¹² It was co-sponsored by the League of California Cities and the California Association of County Treasurers and Tax Collectors.³

Why California Passed the Law

California cities and counties already impose transient occupancy taxes on short-term rentals, the same hotel tax that applies to traditional lodging. Before SB 346, most local governments collected those taxes through Voluntary Collection Agreements with the platforms. According to the bill’s sponsors, those agreements routinely prevented cities from seeing the actual addresses of the rentals generating the revenue.³

Without address-level data, local officials could not readily tell whether a given rental was properly licensed, whether the right tax rate had been applied, or whether the property was even allowed to operate as a short-term rental in that zone. Cities that wanted answers had to hire third-party data firms, issue subpoenas, or accept the platform’s figures on faith. The California Association of County Treasurers and Tax Collectors called it “a gap in the law” and a “substantial obstacle” to enforcing existing ordinances.⁴

How the Law Works: Local Opt-In

SB 346 does not apply statewide by default. A city or county must first adopt a local ordinance invoking the law before any of its tools become available in that jurisdiction.¹ If no ordinance has been adopted where a rental is located, nothing in SB 346 changes how that rental is reported or taxed. Where a local ordinance is in place, the law unlocks four distinct powers.

Property-Level Data Reporting

A local agency can require a facilitator to disclose the physical address, including the nine-digit ZIP code, of every short-term rental listed during a reporting period. If the address alone will not identify the property, the agency can also request the assessor parcel number, the URL of the specific listing, and information about whether the unit is an accessory dwelling unit, a guest house, or part of a multifamily property.⁵

Reports can be required no more than once every three months. Jurisdictions that mandate monthly tax remittance may request monthly reports instead.⁵

Listing Transparency on the Platform

In an opt-in jurisdiction, each listing must display any applicable local business license number and transient occupancy tax certification. The goal is to make permit status visible at the point of booking.³

Audits

Local agencies can audit a facilitator’s records to confirm that the correct amount of transient occupancy tax has been collected and remitted. Audit authority applies only where the facilitator is the party responsible for collecting and remitting the tax under a local ordinance or agreement, and the local agency pays the cost of the audit.⁵

Penalties and Appeals

If a facilitator fails to file the required reports, the local agency can impose administrative fines or penalties. A facilitator has 20 days to appeal a penalty order in superior court. If a facilitator refuses to pay, the agency has to go to civil court to collect.⁵

What It Means for Hosts

If your rental is in a jurisdiction that adopts an SB 346 ordinance, your platform can be required to hand over your property’s address, parcel number, and listing URL to the local tax authority on a quarterly or monthly cycle. Your local business license number and tax certification can be required to appear on the listing itself. The practical effect is that cities no longer need your cooperation, or the platform’s goodwill, to see which specific units are being rented and whether each one is properly permitted.

SB 346 does not change the tax rate, create a new tax, or impose new licensing requirements on hosts by itself. What it changes is a city’s ability to see and verify what is already supposed to be happening under local rules.

What It Means for Platforms

Airbnb, VRBO, Expedia Group, Booking.com, and similar facilitators are the direct targets of the reporting and audit obligations. In any California jurisdiction that opts in, a platform can be compelled to produce address-level listing data, display local permit information on each listing, and open its books to a local tax audit where it is the remitter of record.

Airbnb opposed the bill, arguing it mandated an “overly broad collection of hosts’ private and sensitive information,” including parcel numbers, without adequate due process. The company said federal courts had previously treated host addresses as private business records that platforms cannot be compelled to turn over absent a valid legal request or subpoena.³ Expedia Group argued the reporting and audit obligations would be onerous, especially in cities where the platform is not the entity responsible for remitting the tax.⁵

Limits of the Law

A few boundaries are worth flagging, because the structure of the law is easy to misread.

SB 346 is not self-executing. In a city or county that has not adopted an implementing ordinance, none of the reporting, listing, or audit requirements apply. The law also does not preempt local rules: it states that nothing in its provisions prevents a city or county from adopting its own ordinances regulating short-term rentals or from collecting transient occupancy taxes in ways that differ from the procedures SB 346 outlines.¹ It supplements local authority rather than replacing it.

Audit costs sit with the local agency, not the platform. And data requests have a frequency cap: no more than quarterly, unless the jurisdiction already requires monthly tax remittance.⁵

The Legal Footing

SB 346 was drafted to align with Ninth Circuit precedent on local authority over digital rental platforms. The controlling case is HomeAway.com, Inc. v. City of Santa Monica, decided in 2020, which upheld a Santa Monica ordinance requiring platforms to disclose booking data and held that such requirements did not violate the federal Communications Decency Act or the First Amendment.⁶ The Ninth Circuit reasoned that ordinances regulating commercial booking transactions are distinct from those regulating expressive activity, and so do not trigger heightened constitutional scrutiny.

Platforms have historically challenged similar local ordinances on Stored Communications Act, Communications Decency Act, First Amendment, and Fourth Amendment grounds.⁷ By building a state-level framework that mirrors what the Ninth Circuit already approved locally, SB 346’s authors aimed to give participating cities firmer legal ground to stand on. Amendments adopted during the Assembly Local Government Committee hearing capped reporting frequency, narrowed the categories of supplemental data a city can request, and limited audit authority to facilitators that actually collect and remit the tax.⁵

1
CalMatters Digital Democracy. SB 346
2
Senator Durazo, Senate District 26. Senator Durazo’s SB 346 Passes Legislature, Heads to Governor’s Desk
3
California Senate Judiciary Committee. SB 346 Durazo – Senate Judiciary Analysis
4
Assembly Committee on Local Government. SB 346 Analysis – Assembly Local Government Committee
5
Assembly Committee on Local Government. SB 346 Durazo – Assembly Local Government Committee Analysis
6
United States Court of Appeals for the Ninth Circuit. HomeAway.com, Inc. v. City of Santa Monica
7
Assembly Committee on Local Government. SB 346 Analysis