Chico, Calif.--With more and more people using sites like Craigslist and Airbnb to rent a room, on Tuesday night the Chico City Council discussed whether or not to update the city's transient occupancy tax, a hotel fee passed down to visitors who stay the night while visiting.
The city council voted five to one to move forward with a proposal to draft an ordinance that would change the city's municipal code, which are the laws the govern the city, to ensure that hotels and those renting out their home are given a fair chance.
In Chico, there are 141 room sharing entities operating and they draw in about $700,000 in revenue a year.
The city, however, is not benefiting from it since the guests staying at those entities aren't being taxed.
As of right now, hotels are the only ones having to pay the 10% transient occupancy tax.
"Someone stays at a hotel and they have a $100 charge, then there would be a 10% tax on top of that. So they'd pay $110and send that to the city of Chico," said Scott Dowell, the Administrative Services Director for the city.
If the 141 room sharing entities were being taxed, Dowell said that would be generating about $71,000 in tax revenue for the city's general fund.
That's why he believes it's time to update the city's municipal code, something that he says many other cities have already been doing.
"I had a stay last year in southern California, Universal Studios, and got my bill and at the end there was that TOT tax, so it's becoming something widely known," Dowell said.
Bob James is the co-owner of Hotel James and believes everyone should have to pay taxes.
"I think Airbnb is a good idea, I don't think it's fair where they get a small advantage over small businesses like ours."
If approved, this would not be a tax on those who own the properties that they're renting out, but rather the guests who are going to be using the facility.
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