Transient Occupancy Tax (TOT), also known as lodging tax, hotel tax, or tourist tax, is a tax imposed by local or state governments on short-term accommodation stays, typically defined as stays of 30 days or fewer. The tax is charged to guests as a percentage of the rental amount and must be collected by the property manager or host and remitted to the appropriate government authority. TOT rates vary significantly by jurisdiction, ranging from 1% to over 15%. Many OTAs now collect and remit these taxes automatically in certain markets, but property managers are ultimately responsible for compliance.
Why this matters for property managers
Whether this tax is collected automatically by a platform or falls to the operator to file directly changes what is at stake, because the operator usually remains the party ultimately liable for any shortfall. Rates and rules vary by city and can layer on top of state and county taxes, so assuming a platform handles everything is a common and costly mistake. Operators who confirm exactly which taxes are remitted on their behalf and file the rest on time avoid the audits and penalties that turn an overlooked line item into a serious back liability.
Frequently Asked Questions
Who is responsible for collecting transient occupancy tax?
How much is transient occupancy tax on vacation rentals?
Does Airbnb collect transient occupancy tax automatically?
What happens if you don't pay transient occupancy tax?
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