San Diego Hotel Room Tax Increase: Rates, Exemptions, and 2025 Change

The San Diego hotel room tax is now between 11.75% and 13.75%, depending on where the property sits in the city, after Measure C took effect on May 1, 2025. Larger hotels also add a 2% Tourism Marketing District assessment, which can push the total tax on a room as high as 15.75%.¹ Before May 2025, every lodging property in the city charged the same flat 10.5% rate.

Current Rates by Zone

Measure C split the city into three tax zones, each with its own combined Transient Occupancy Tax rate:¹

Zone 1: 11.75%
Zone 2: 12.75%
Zone 3: 13.75%

The city publishes an interactive map so guests and operators can look up the zone for a specific address. The zone a property falls in depends on its location relative to the Convention Center, with rates rising the closer a hotel sits to the downtown core.

The Extra 2% at Larger Hotels

Hotels with 70 or more rooms pay a separate 2% Tourism Marketing District assessment that funds regional tourism promotion. Operators can pass this cost through to guests, and most do.¹ Add it to the Zone 3 rate and the total tax line on your bill can reach 15.75%.

Smaller lodging properties, those with fewer than 70 rooms, do not pay the TMD assessment at all. An older 0.55% rate that once applied to smaller hotels was eliminated in September 2016.¹

What Counts as a Hotel

The tax reaches beyond traditional hotels. Under San Diego Municipal Code Section 35.0102, a “hotel” is any structure occupied or designed for occupancy by transients for dwelling or sleeping purposes. That covers hotels, motels, bed-and-breakfasts, and short-term vacation rentals booked through platforms like Airbnb or Vrbo. Hospitals, convalescent homes, and sanitariums are excluded.²

A “transient” is anyone who occupies or is entitled to occupy a room for less than one month. The code defines a month as the span from one calendar day to the same calendar day in the following month, so a 28-day February stay and a 31-day March stay are both treated as one month.²

The guest owes the tax. The operator is legally responsible for collecting it at the same time as rent and holding those funds in trust for the city until remittance.

Who Is Exempt

Several categories of stays are exempt from the tax:¹

Stays of one month or more. Any guest who stays, or is entitled to stay, for a month or longer pays no TOT.
Rooms renting for $25 a day or less, and dormitory beds at $25 a day or less per person.
Federal and California state government travel paid directly by the agency. The guest must present official travel orders and a qualifying government ID.
Foreign diplomats and consular officials exempt under federal law or treaty, using a valid U.S. State Department tax exemption card.

Two limits catch people by surprise. State officials from states other than California traveling on government business are not exempt. Neither are nonprofit organizations. Only direct-pay arrangements from the federal government or California state government qualify.

Short-Term Rental Hosts

If you rent out a house, condo, or a single room for less than a month per guest stay, San Diego treats you the same as a hotel operator. You need both a Transient Occupancy Registration Certificate and a Short-Term Residential Occupancy license before you can legally list the property.³ Each host can hold only one STRO license at a time, and licenses cannot be transferred between properties or owners.

Property owners renting all or part of their home for more than six days in a calendar year must also pay the city’s Rental Unit Business Tax. Hosts who are not the property owner need a separate Business Tax Certificate and a document proving they have the legal right to sublease the unit.³ The city applies no exception for unlicensed operators collecting rent on short stays.

Operators remit collected TOT and TMD payments monthly, with the return due by the last day of the month after the collection period. Late payments carry a 1% penalty on the first day of delinquency, plus one-third of 1% for every additional day including weekends and holidays, up to a 25% cap on the total owed.²

Why the Rate Went Up in 2025

Measure C appeared on San Diego’s March 2020 ballot as a citizen initiative to raise the hotel tax and fund three priorities: Convention Center expansion, homelessness services, and street repairs.⁴ It received 65.25% approval, short of the two-thirds threshold city ballot materials had said was required, and years of litigation followed over whether a simple majority was enough for a citizen-initiated special tax. A trial court validated Measure C in August 2024, and the Court of Appeal for the Fourth District affirmed on October 3, 2025.⁵ The city began collecting the new rates on May 1, 2025.

The original 10.5% base still flows into the General Fund for services like police, fire-rescue, and parks. The Measure C increase is earmarked for the Convention Center, homelessness programs, and street repairs on a fixed allocation for the first 20 years of collection.⁴

1
City of San Diego. Transient Occupancy Tax (TOT)/Tourism Marketing District (TMD)
2
City of San Diego. San Diego Municipal Code Chapter 3 Article 5 Division 1
3
City of San Diego. Short-Term Residential Occupancy (STRO)
4
City of San Diego. Measure C Initiative Text
5
Justia. Alliance San Diego v. California Taxpayers Action Network