Palo Alto Priciest To Stay With California's Highest Hotel Tax

PALO ALTO, CA --It's almost official. This Silicon Valley city holds the distinction of having the highest transient occupancy tax in California with the passage of Measure E.

With all precincts reported by the Santa Clara County registrar, 67.85 percent passed the measure with 9,594 votes cast in favor. Certification of the results are due within a month.

The initiative raises the TOT from 14 to 15.5 percent. The additional 1.5 percent is expected to add on $2.55 million each year onto the already $25 million it collects from guests booking places to stay in the city limits.

Proponents argued the additional money in the general fund will fund the escalating construction costs the city has faced since 2014 when the rate became 14 percent.

"I want the city to succeed," said John Hutar, general manager to Dinah's Garden Hotel.

Hutar opposed passage because he feels 14 percent is high enough to impose on his guests, but said he understands the city's plight. He also balked at Palo Alto gaining the distinction of charging the most of any other city in the state.

Anaheim hotels -- the home of Disneyland -- charge 15 percent; Garden Grove, 14.5 percent; with Los Angeles and San Francisco sharing the 14 percent rate. Most California cities hover between 10- to 12 percent, according to the California State Controller's Office.

Palo Alto isn't the only South Bay city to face a raise in room tax rates.

• Morgan Hill's voters passed Measure H, which raises the hotel tax from 10 to 11 percent -- with 78.43 percent of the vote amounting to 6,823 ballots cast.
• Milpitas's guests will end up paying more on their hotel bill, with taxes going from 10 to 14 percent. Measure R passed with 65.72 percent or 5,352 votes.
• Los Altos voters went with Measure D, which hikes the room tax from 11 to 14 percent, with 4,245 ballots cast and amounting to 57.92 percent of the vote.
• Sunnyvale's Measure K is becoming law with 77.12 percent, or 16,367 votes, choosing to raise the room tax from 10.5 to 12.5 percent.

--Image courtesy of Kathryn Reed