Potential Hotel Tax (Transient Occupancy Tax) Measure
Exploring a potential revenue option to support City services and long-term financial stability
The City of Pleasanton is exploring a potential increase to its hotel tax, also known as the Transient Occupancy Tax (TOT). A hotel tax is paid by overnight visitors staying in hotels and similar lodging for stays of 30 days or less.
Pleasanton’s current hotel tax rate is 8%, unchanged since 1983. City staff has completed analysis and stakeholder outreach and presented a potential approach for City Council to consider. City Council has not made a final decision, and any measure would require voter approval.
Why This Is Being Explored
Pleasanton is facing an ongoing structural budget deficit driven by rising costs for services and infrastructure. City Council directed staff to explore potential revenue options, including a hotel tax.
Because the hotel tax is paid primarily by visitors, it is one option that could help support City services while limiting direct impacts on residents.
How It Works
How the Hotel Tax Works
When an overnight guest stays in a hotel or similar lodging for 30 days or less, the hotel tax is applied as a percentage of the room rate. The guest pays the tax as part of their bill, the lodging operator collects it, and the revenue is remitted to the City.
Hotel tax revenue is a general tax, meaning funds would be deposited into the City’s General Fund and could be used for services such as public safety, infrastructure maintenance, parks, and recreation.
How Pleasanton Compares
Pleasanton’s current hotel tax rate is among the lowest in Alameda County. Most neighboring cities have rates between 10% and 14%, and several have increased their rates in recent years.
Even at 12%, Pleasanton would remain generally in line with nearby cities.
Proposed Approach and Timeline
Potential Approach Under Consideration
Based on stakeholder feedback and regional comparisons, staff recommended that City Council consider a phased increase to the hotel tax rate, up to 12% over two years:
- Current rate: 8%
- Proposed Phase 1: 10% effective July 1, 2027
- Proposed Phase 2: 12% effective July 1, 2028
At current hotel occupancy levels, a 12% rate could generate approximately $2.8 million annually, although actual revenue would depend on market conditions and final Council action.
This is a recommended approach only and has not been approved by City Council.
What Happens Next
Next steps may include continued City Council discussion, development of potential ballot language, and additional outreach with stakeholders.
If City Council decides to place a hotel tax measure on the ballot, Pleasanton voters would make the final decision at a future election.
Additional Information
Frequently Asked Questions
What is a hotel tax?
A hotel tax, also known as a Transient Occupancy Tax (TOT), is a tax paid by overnight guests staying in hotels and similar lodging for stays of 30 days or less. The tax is charged as a percentage of the room rate and collected by lodging operators on behalf of the City.
Is the City considering a hotel tax increase?
Yes. City staff has completed analysis and stakeholder outreach and presented a recommended approach for City Council to consider. City Council has not made a final decision on whether a hotel tax measure will appear on the ballot or what the final structure would be.
Does Pleasanton already have a hotel tax?
Yes. Pleasanton currently has an 8% hotel tax, which has been in place since 1983 and has not been adjusted since that time.
Who pays the hotel tax?
The tax is paid by overnight visitors. Residents would only pay the tax if they choose to stay in a local hotel or short-term rental.
Why is the City exploring a hotel tax now?
The City of Pleasanton is facing an ongoing structural budget deficit driven by rising costs for services and infrastructure. In August 2025, City Council directed staff to explore potential revenue options and engage stakeholders. A hotel tax is one option being considered because it is commonly used by cities and is paid primarily by visitors rather than residents.
How does Pleasanton compare to other cities?
Pleasanton’s hotel tax rate is among the lowest in Alameda County. Most neighboring cities have rates between 10% and 14%, and several nearby jurisdictions have increased their rates in recent years. Cities currently at or above 12% include Alameda, Hayward, Newark, Oakland, San Leandro, Union City, Berkeley, and Emeryville.
What approach did staff recommend?
Based on stakeholder feedback and regional comparisons, staff recommended that City Council consider a phased increase to a 12% hotel tax rate over two years:
- Phase 1: Increase from 8% to 10% effective July 1, 2027
- Phase 2: Increase from 10% to 12% effective July 1, 2028
This recommendation has not yet been adopted unless directed by City Council
How much revenue could a hotel tax increase generate?
Based on current hotel occupancy levels, a 10% hotel tax rate could generate approximately $1.4 million annually, and a 12% rate could generate approximately $2.8 million annually. Actual revenue would depend on market conditions and final Council action.
How would hotel tax revenue be used?
Hotel tax is a general tax, meaning revenues would be deposited into the City’s General Fund and could be used for any lawful City purpose, including core services such as public safety, infrastructure maintenance, parks, and recreation.
What did the City hear from hotel operators and partners?
City staff conducted listening sessions with local hotel operators and regional partners. Feedback included no opposition to a potential rate increase, comments ranging from neutral to supportive, confirmation that Pleasanton’s current rate is well below regional comparables, and a preference for phased implementation rather than a single large increase.
Has City Council finalized a ballot measure?
No. Draft ballot language would return to City Council for review and approval at a future public meeting before being placed on the ballot.
Would voters have a say?
Yes. If City Council decides to place a hotel tax measure on the ballot, voters would make the final decision at the November 2026 election.
What happens next?
Next steps may include drafting potential ballot language, additional outreach with hotel operators, and returning to City Council for further direction and possible ballot placement. Future actions would occur at public City Council meetings.