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

Section 3-6.303 of the Watsonville Municipal Code sets the transient occupancy tax at twelve percent of the rent charged by the operator, for the privilege of occupancy in any transient occupancy facility. Hotels, inns, motels, tourist homes, lodging houses, rooming houses and dormitories are all named in the definition of the facility in § 3-6.302(b), and the same definition reaches homes, granny units and accessory units. A transient is a person occupying for thirty consecutive calendar days or less. The code treats the tax as a debt owed by the guest to the City, extinguished only by payment to the operator or the City.

The guest pays when the rent is paid, and if rent is paid in installments a proportionate share of the tax goes with each installment. Unpaid tax becomes due when the guest stops occupying space, and if the operator never receives it the Finance Director may require direct payment to the City. The operator must show the tax separately from the rent (§ 3-6.305), register each facility with the Finance Director within thirty days after commencing business, and post the transient occupancy registration certificate in a conspicuous place (§ 3-6.306).

Returns and full remittance are due on or before the last day of the month following each calendar quarter, or at the close of any shorter period the Finance Director sets, and are due immediately if the business ceases for any reason (§ 3-6.309). Taxes collected are held in trust for the City. Exemptions are narrow: only occupancies beyond the City's power to tax, and officers or employees of a foreign government exempt by federal law or treaty, and the claim must be made when the rent is collected, under penalty of perjury on the Finance Director's form (§ 3-6.304). Operators keep records for three years, open to inspection at all reasonable times (§ 3-6.314).