What is the TOT (Transient Occupancy Tax)?
The TOT — also called hotel tax, lodging tax, or tourism tax — is a tax imposed by states and cities on short-term accommodations (typically stays under 30 days). It is the same tax charged when you book a hotel room.
Who pays it?
The guest pays the TOT. It is added as a separate line item on top of the nightly rate at the time of booking. As the property owner, you collect the TOT from the guest and remit it to the government. It is a pass-through — it is not your income and not your expense.
Who handles the collection and remittance?
OTA platforms (Airbnb, VRBO, Booking.com) automatically collect and remit the TOT in most U.S. jurisdictions. The tax is charged to the guest at checkout and paid directly to the state/county by the platform — the money never passes through your account.
Direct bookings (your own website): You are responsible for collecting the TOT from the guest, reporting it, and remitting it to the appropriate tax authority (monthly or quarterly depending on jurisdiction).
Condo Hotels: The hotel operator/association typically handles all TOT collection and remittance as part of the hotel's operations. You receive your share of revenue after all taxes have been handled.
Does TOT affect your ROI calculations?
No. Since the TOT is collected from the guest and remitted to the government, it does not reduce your gross revenue, NOI, or cash flow. It is shown here for informational purposes only so you understand the full tax landscape of your market. Your property tax, state income tax, and STR license fees are the taxes that directly impact your returns — and those are already factored into the calculations.