Costa Mesa, CA Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Tax rate
- 8% of rent charged
- Applies to stays of
- 30 consecutive days or less
- Registration deadline
- 30 days after opening for business
- Filing frequency
- Quarterly, by end of following month
- Original delinquency penalty
- 10% of tax due
- Continued delinquency penalty
- Additional 10% after 30 days
- Appeal window
- 15 days to city council
Summary
Costa Mesa charges an 8% transient occupancy tax on every hotel, motel and rental-unit stay of 30 consecutive days or less, collected by the operator and remitted to the finance department under Municipal Code Chapter IV. Operators must register within 30 days of opening and file quarterly returns.
For the privilege of occupancy in any hotel or motel, each transient is subject to and shall pay a tax in the amount of 8% of the rent charged by the operator. The tax constitutes a debt owed by the transient to the city which is extinguished only by payment to the operator or to the city. The transient shall pay the tax to the operator of the hotel or motel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel or motel. If for any reason the tax due is not paid to the operator of the hotel or motel, the finance department may require that the tax shall be paid directly to the finance department.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: rev 4894290; v9 updated 2025-11-18).
Full Breakdown
Municipal Code § 16-68 sets the tax at 8% of the rent an operator charges a transient, defined at § 16-67 as anyone occupying space for 30 consecutive calendar days or less unless a written agreement covers a longer stay. The tax is a debt the guest owes the city, extinguished only by payment to the operator or directly to the city, and it is due proportionally with each rent installment or in full when occupancy ends. Section 16-62 defines "hotel" broadly to include hotels, motels, apartment houses, mobile homes at a fixed location, and any "rental unit," so short-term rentals of houses, condos and rooms fall under the same tax scheme as traditional lodging.
Within 30 days of March 24, 1969, or of commencing business (whichever is later), every operator must register with the finance department under § 16-71 and post a transient occupancy registration certificate on the premises; that certificate does not authorize operating without any other required city permit. Operators must state the tax separately from rent on every receipt and may not advertise that they will absorb or waive it (§ 16-70). Section 16-72 requires a quarterly return and full remittance to the finance department by the last day of the month following each quarter, though the department may set shorter or longer reporting periods, and a final return is due immediately if the business closes.
Limited exemptions exist under § 16-69 for occupancy the city has no power to tax and for federal, state or treaty-exempt foreign government officers on official business, but exemptions must be claimed on a prescribed form at the time rent is collected. Operators must keep tax records for three years under § 16-76, available for finance department inspection.
Violations & Fines
Late remittance triggers an automatic 10% penalty under § 16-73(a), plus a second 10% penalty if the delinquency continues more than 30 days past the due date, and a 25% penalty if the city council finds fraud. Unpaid tax accrues interest at 0.5% per month, uncapped, computed on the tax alone (not prior penalties). If an operator fails to collect or remit, the finance department may investigate and assess the tax, interest and penalties itself under § 16-74, mailing notice to the operator's last known address; the operator has 10 days to request a hearing or the assessment becomes final and immediately payable.
Frequently Asked Questions
What is Costa Mesa's transient occupancy tax rate?
Do short-term rental owners have to collect this tax?
How often must operators file returns?
What happens if an operator underpays or misses a deadline?
Sources & Official References
Other rules in Costa Mesa
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