What’s at stake

This measure is an attempt to catch up with changes in the hotel booking industry by making online platforms like Priceline, Expedia, Hotels.com and many others responsible for city hotel taxes, more formally known as transient occupancy taxes.

City reports refer to those businesses as online travel companies, so think Measure TC for Travel Companies.

Official language

Here's the official title: "Applying Transient Occupancy Tax To Online Travel Companies"

Here's the text you’ll see on your ballot:

What your vote means

• A "yes" vote means: You want to adopt a city law that makes online travel companies responsible for hotel taxes along with the hotels.
• A "no" vote means: You don’t want to adopt a city law that makes online travel companies responsible for hotel taxes along with the hotels.

Understanding Measure TC

This measure is the City Council’s response to the shift in the hotel room booking business model. Until now, the hotel tax, known in official circles as the transient occupancy tax or TOT, has been based on the room rate that a visitor pays to the hotel. But increasingly over the past several decades, customers don’t pay the hotel but instead pay an online travel company, which negotiates a bulk rate with hotels and charges the customer a markup. The tax paid to the city does not always include the online travel company markup.

The hotel room tax rate in Los Angeles is currently 14%, which is typical for most cities in California but much higher than other cities around the country. New York City, for example, charges 5.875%, plus $1.50 a day.

The measure seeks to ensure the tax is paid on the full amount the customer pays for the room, including the online travel company markup, and not just the amount for which the hotel charges the online travel company.

It updates the city’s hotel tax model to catch up with changes in the hotel booking industry. It is also a response to the coming 2028 Olympics and is a companion to Measure TT, which would raise the hotel tax rate.

It follows the model in Anaheim, where in 2022, voters required online travel companies to collect and pay the hotel tax based on the full amount customers pay.

The measure is deemed necessary in the wake of court rulings that have exempted online travel companies from paying hotel taxes under existing law.

Measure TC is expected to raise $5 million in revenue annually. It would be a general tax, which means the money could be spent on any of a variety of city services.

How we got here

In 2023, the City Council instructed its legislative analysts and other city staff to report back on how much the city charges in hotel taxes as compared with other cities and how receipts may be affected by the rise of online travel companies. The result was this ballot measure. On Feb. 10, the council voted to put it on the June 2 ballot.

What it takes to pass

The measure needs a simple majority to pass — 50% plus one.

What people or who support it say 

Arguments in favor of Proposition TC were signed by city officials and say the city is currently losing hotel tax revenue it should be paid.

“This measure does not create a new tax. It closes loopholes and modernizes outdated rules so the system works as intended,” according to the ballot measure signed by councilmembers Tim McOsker, Eunisses Hernandez and Bob Blumenfield and City Administrative Officer Matt Szabo and Chief City Tourism Officer Doane Liu.

What people who oppose it say

No opposing ballot argument was submitted.

Potential financial impact

The City Administrative Office estimates the tax could bring in $5 million a year.

Further reading

• Local governments can’t collect taxes from online travel firms (LA Times)
• Council moves forward with plan to update hotel tax  (MyNewsLA.com)
• Measure Text and Voter Information Pamphlet (Office of the City Clerk)