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Modesto, CA Hotels & Lodging: Transient Occupancy Tax (2026)

Some Restrictions

Compiled from the official code textEditor Martyn O'NeillLast verified September 2026

Key Facts

Current rate: 9% of rent (§ 8-2.603)
Taxable stay: 27 consecutive days or less
Collected by: Hotel operator, remitted to Finance Director
Late penalty: 5%/month, capped at 25% (§ 8-2.608)
Fraud penalty: Additional 25% of tax due

Summary

Modesto's Uniform Transient Occupancy Tax under § 8-2.603 charges every hotel guest staying 27 consecutive days or less nine percent of the rent, phased in from seven percent in 1985 to nine percent by July 1987. Operators collect it when rent is paid and remit it to the Finance Director as Tax Administrator.

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the following amount:(a)Commencing July 1, 1985, a tax in the amount of seven (7) percent of the rent charged by the operator.(b)Commencing July 1, 1986, a tax in the amount of eight (8) percent of the rent charged by the operator.(c)Commencing July 1, 1987, a tax in the amount of nine (9) percent of the rent charged by the operator.

View official code

Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Code of Ordinances: Supplement 71).

Full Breakdown

601). 603 sets the rate that has applied since the last scheduled increase: commencing July 1, 1987, a tax in the amount of nine percent of the rent charged by the operator, following earlier step-ups to seven percent in 1985 and eight percent in 1986. 602(d) as anyone occupying a hotel room for 27 consecutive calendar days or less, which is also the line that separates a taxable hotel stay from an exempt longer-term rental. 602(g). 604 exempts specific categories, including occupancy the City lacks power to tax, foreign-government and federal officers on official business, and stays at hospitals or convalescent homes equipped for the aged or infirm, but grants no general small-operator or residential exemption. 605 bars an operator from advertising that the tax will be absorbed rather than passed on to the guest. 610.

Violations & Fines

Failing to remit the 9% tax on time triggers a 5% per month delinquency penalty under § 8-2.608, capped at 25% of the tax owed, plus another 25% penalty if the Tax Administrator finds intentional non-payment or fraud. Section 8-2.614 also lets the City record a lien against the operator's real property and pursue collection by warrant or seizure and sale for unpaid amounts.

Frequently Asked Questions

What is Modesto's transient occupancy tax rate?

Nine percent of the rent charged. Section 8-2.603 phased the Uniform Transient Occupancy Tax up from seven percent in 1985 to eight percent in 1986 and nine percent commencing July 1, 1987, and that nine percent rate is what operators must collect on every taxable hotel stay today.

Does the hotel tax apply to short-term rental stays?

It applies to any occupancy of 27 consecutive days or less under the transient definition in § 8-2.602(d), regardless of whether the unit is a traditional hotel or a short-term rental. A written agreement for more than 27 days for compensation takes the stay outside the tax.

What happens if a hotel operator remits the tax late?

Section 8-2.608 adds a delinquency penalty of five percent of the unpaid tax per month, capped at twenty-five percent of the tax owed. If the Tax Administrator determines the non-payment was intentional or fraudulent, an additional twenty-five percent penalty applies on top of the delinquency penalty.

Is a hotel exempt from Modesto's occupancy tax for government guests?

Some are. Section 8-2.604 exempts officers or employees of the U.S. government, a foreign government under treaty, or a state, county or city entity when paying rent on official business, along with stays at hospitals or convalescent homes for the aged or infirm, but grants no blanket residential exemption.

Sources & Official References

[1]Modesto Code of Ordinances, Title 8 Ch. 2 Art. 6 (Municode)

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