County’s TOT revenue is up

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The county of San Diego’s Transient Occupancy Tax Revenue for Fiscal Year 2020-21 increased by 29.1 percent from the 2019-20 total.

For the entire unincorporated county collections totaled $5,387,799.05 between July 1, 2020, and June 30, 2021, including $101,551.81 from Alpine lodging establishments; $38,533.11 collected in Jamul; $25,110.91 provided by Descanso facilities; $24,546.48 of Mount Laguna revenue; $15,270.90 paid by Pine Valley lodgers; $13,814.94 of Boulevard payments; and $3,381.65 generated in Jacumba. The county’s annual revenue was down from the $5,784,163.63 figure of 2018-19, which was the final full fiscal year before the coronavirus outbreak caused restrictions in March 2020, although the 2020-21 figure was still higher than the 2017-18 total of $5,105,749.14.

“It was good to see revenue going in a positive direction,” said San Diego County treasurer-tax collector Dan McAllister. “Hopefully we’re on the mend.”

The Transient Occupancy Tax was reduced from 9 percent of the unit rate to 8 percent in October 2007 and 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.  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 four dollars 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.

The facility operator must submit payment to the county on a quarterly basis by the last day of the month following the end of the quarter. If a facility ceases operation payment must be made within 30 days after the operator ceases doing business, and if the venue is sold or its name is changed the county must receive the TOT payments for occupancy prior to the sale or name change within 30 days of the transaction.

The TOT is collected only from lodging facilities in the county’s unincorporated area, although the revenue is used for the county’s Community Enhancement program and may be given to organizations in incorporated cities as well as unincorporated communities. Community Enhancement funds, which are allocated during the county’s annual budget process, are intended to promote tourism including visitors from other parts of the county.

Various reasons other than decreased lodging can cause a decline of TOT revenue on a quarterly or annual basis from one year to the next. A facility may be closed for renovations or may outright cease business. Because a timeshare unit used by an ownership partner or an owner’s guest or a private campground space used by a member or member’s guest is not subject to the TOT, the number of units available to the general public and thus subject to the TOT vary from year to year.  A late payment or a payment postmarked by the deadline but not processed by the sixth of the following month will be reported for the following quarter, which can cause annual fluctuations. Some community losses may be due to a revision in the community definitions rather than to losses for a specific establishment.

The coronavirus shutdowns began on March 12, 2020, and impacted three weeks of the 13-week Fiscal Year 2019-20 third quarter, but Transient Occupancy Tax revenue for San Diego County was down by 36.5 percent from the 2018-19 third quarter.  On a countywide basis the fourth-quarter decrease from 2018-19 to 2019-20 was 68.0 percent.

During the first quarter of 2020-21, which covered July 2020 through September 2020, the county collected a total of $1,378,010.78.  That equates to a 5.1 percent decrease from the 2019-20 first quarter of $1,453,359.97.

“Businesses during the first quarter did not recover to the levels they were prior to the shutdown,” McAllister said. “That, by the way, was expected.”

The first-quarter figures included $22,247 from Alpine, $11,893.99 for Jamul, $6,108.83 of Descanso collections, $4,863.88 paid by Mount Laguna lodgers, $3,828.53 of Pine Valley revenue, $2,620.26 provided by Boulevard, and $422.80 from Jacumba facilities.

“During the summer of 2020 some of the COVID restrictions were lifted. People began to come out of their homes,” McAllister said.

“It’s no surprise that travel and recreation increased as the restrictions were lifted,” McAllister said. “That played into healthier bottom lines.”

The first quarter of Fiscal Year 2020-21 also included the San Diego County Board of Supervisors adopting the county’s 2020-21 budget. The budgeted TOT revenue was $2,585,395.00, so the actual $5,387,799.05 amount is 208.4 percent of the budgeted total.

County’s TOT  revenue is up