Merced, CA Short-Term Rentals: Taxes & Fees (2026)

The clearest city rule touching short-term rentals is the Transient Occupancy Tax (TOT) in Chapter 3.08. Under Section 3.08.030, each transient must pay a tax of ten percent (10%) of the rent charged by the operator, a rate set by Ordinance 1936 in 1996 and consistent with the State Controller's record of Merced's 10% TOT effective July 1, 1996. A "transient" is defined in Section 3.08.020 as anyone occupying for 30 consecutive calendar days or less. The operator collects the tax at the same time as rent and must state it separately on the guest's receipt (Section 3.08.040); operators may not advertise that they will absorb the tax. Under Section 3.08.060, each operator files a return with the finance officer on forms provided, on or before the last day of the month following the close of each calendar quarter, and remits the full tax collected with the return. Taxes collected are held in trust for the city. Section 3.08.070 imposes a 10% penalty for an original delinquency, an additional 10% after 30 more days, a 25% penalty for fraud, plus 1% per month interest. The city also charges general business-license taxes under Title 5. There is no separate STR registration fee because the city has no STR ordinance.