Good economic conditions have contributed to an increase in the county of San Diego’s Transient Occupancy Tax revenue, and an increase in the number of venues which let visitors stay in unincorporated towns is also a factor in the increased TOT revenue.
On a countywide basis the TOT revenue increased from $5,105,749.14 in Fiscal Year 2017- 18 to $5,784,173.63 for 2018-19. Alpine’s total contributions rose from $197,970.41 to $204,855.96. Mountain Empire collections increased from $14,854.01 to $28,203.96, although a late-processed payment credited to the first quarter of 2018-19 rather than the fourth quarter of 2017- 18 contributed to that increase as well as economic growth and the issue of late-processed payments is likely responsible for the Jamul decrease from $30,041.60 to $19,720.95. Lodgers in Pine Valley paid $12,613.42 in 2017-18 and $21,975.20 during 2018-19. The Boulevard amounts were $7,176.85 for 2017- 18 and $11,634.65 in 2018-19. Descanso payments increased from $2,690.26 to $5,312.16.
“TOT has been up everywhere and it’s been up for a number of reasons,” said San Diego County Treasurer-Tax Collector Dan McAllister. “I think the first and foremost one is there’s a good economy.”
The Transient Occupancy Tax, which was reduced from 9 percent of the unit rate to 8 percent in October 2007, is collected from occupants of hotels, motels, bed and breakfast venues, mobile home parks, private campgrounds, and other structures occupied or intended for occupancy by non-residents for lodging or sleeping purposes.
“There are more places to stay than there were before,” McAllister said.
McAllister added that bed and breakfast venues and agritourism venues increase the mobility of tourists to stay in remote areas of the county.
“I think the bed and breakfast industry has expanded,” McAllister said. “There are great numbers of them all over the county of San Diego.”
The 2018-19 figures included increased revenue over 2017-18 of 81 percent in Spring Valley, 59.6 percent in Fallbrook, 50.5 percent in Bonsall, 33 percent in Borrego Springs, and 27.4 percent in Ramona.
“Those are all areas where there have been more added to the mix,” McAllister said.
Two communities which were not on previous TOT reports are listed in the 2018-19 totals. Vallecitos collected a yearly total of $4,085.99 and San Pasqual had 2018-19 revenue of $237.54, all of which was in the fourth quarter.
“They have started to generate TOT money,” McAllister said.
Buildings existed in those communities. “They just weren’t active as TOT generators,” McAllister said. “There was nothing to report before.”
As bed and breakfast facilities become known they are used more, which increases TOT revenue. “Now we’re seeing that increase, which is good,” McAllister said.
Annual revenue from Rancho Santa Fe increased from $1,646,513.40 to $1,654,197.85 despite a second-quarter drop from $422,274.92 to $367,469.77. Rancho Santa Fe is the closest unincorporated community to the Del Mar Thoroughbred Club, which hosted the Breeders’ Cup in November 2017, so the decrease for 2018 indicates an economic impact from the Breeders’ Cup rather than general economic growth between 2016 and 2017 and the numbers could result in a similar increase when Del Mar hosts the 2021 Breeders’ Cup.
“The Breeders’ Cup was a real big shot in the arm for us,” McAllister said.
McAllister added that the Breeders’ Cup experience could have a positive impact on a Del Mar fall meet when the Breeders’ Cup is in Arcadia or Kentucky. “The interest level has grown,” McAllister said.
Del Mar has had a fall meet every year since 2014. The 2014 second-quarter TOT revenue increased from the previous year by 43.8 percent for Rancho Santa Fe and 12.6 percent countywide while for the first quarter of that fiscal year revenue was up 25.4 percent for Rancho Santa Fe and 25.3 percent for the entire unincorporated county.
“The Del Mar racetrack has instituted and maintained fall racing,” McAllister said.
Agritourism includes wineries, and McAllister believes that agritourism lodging rather than winery patronage is a bigger factor in the Ramona increase. “Some of these wineries that are smaller are not overnight yet,” McAllister said.
Currently most visitors to local wineries do not stay overnight, but the growth of the winery industry could create changes. “In the next five years or so we’ll probably be seeing more generation in that area,” McAllister said.
McAllister cautioned that future increases are not guaranteed. “We can’t predict what the economy’s going to do,” he said.
During Fiscal Year 2013-14 unincorporated El Cajon lost its entire TOT revenue when the Singing Hills Resort became part of the Sycuan Indian Reservation trust land. The TOT is not collected for lodging facilities on Indian reservations or other areas where the county has no taxing power. Despite the opening of a hotel adjacent to the Sycuan casino in March 2019, fourth-quarter TOT revenue for unincorporated El Cajon increased from $4,956.28 in 2017-18 to $6,777.19 for 2018-19.
Campgrounds at county parks are not subject to the TOT. If a private campground has a membership program a member or a member’s guest is exempt from the TOT. A timeshare unit used by an ownership partner or an owner’s guest is not subject to the TOT, although if a unit is rented to the general public it is subject to the tax for that period.
A Federal or State of California officer or employee on official business does not pay the TOT, nor does any foreign government officer or employee exempt under Federal law or international treaty. The tax is not collected if the regular rent is $4 a day or less of if the lodger receives a free room where the only compensation received is publicity for the lodging site. A unit which is occupied or rented by the same person for more than 30 consecutive days is not subject to the TOT.
