Financial Glossary
Transient Occupancy Tax
Transient Occupancy Tax (TOT), also called lodging, hotel, or bed tax, is a local tax imposed on guests who stay for a short period, typically fewer than 30 days, at hotels, motels, vacation rentals, campgrounds, and RV parks. Rates are set by the city or county, and the operator is responsible for collecting the tax from guests and remitting it to the jurisdiction.
Problem & Application
TOT is a frequent compliance gap for Airbnb, VRBO, and independent campground operators because rates and rules vary by jurisdiction and platforms do not always collect on the operator's behalf. Failing to register or remit can trigger penalties and back taxes. Operators with properties in several jurisdictions need a system to track each rate, filing frequency, and due date.
In Short
Transient occupancy tax is a core compliance obligation for any short-stay lodging business, and getting collection and remittance right avoids costly penalties.