The holiday season brings the potential for more visitors to the North State region. Some travelers visiting may prefer using a rental website like Airbnb or VRBO during their stay.
There are around 300 of these short-term rental spaces operating in Chico, according to a recent staff report presented to the city council, and that’s led to a fivefold increase in the taxes generated from them.
In 2018, members of the Chico City Council voted to amend the municipal code to classify short-term and vacation rentals as hotels. This allows the city to take in more revenue from what’s known as a “Transient Occupancy Tax,” or TOT.
During the 2018-19 fiscal year, around $106,000 was collected. But the total has been climbing since then. Last year, these taxes generated more than half a million dollars.
The city contracts with an auditing group HdL Software, LLC to keep tabs on the collection of TOT from short-term rentals.
Of the short-term rental TOT collected, 15% goes to HdL Software, 1% goes to the city’s arts and culture fund and the rest ends up in the city’s general fund, according to the report.
Councilmember Deepika Tandon requested the report in August.
Since then, the council discussed it, though has not yet moved forward with any related action.
