How We Are Funded
Transient Occupancy Tax (TOT) &
Business Improvement District (TBID) Assessment
VHB’s funding does not come from taxes paid by local residents, including local property taxes paid by home and business owners. Funding is derived through a Tourism Business Improvement District (TBID) self-assessment paid by Huntington Beach hotels who collect the assessment from overnight hotel guests choosing to stay in one of Huntington Beach’s 24 hotels (2,600 total available rooms):
Tourism Business Improvement District (TBID):
Huntington Beach’s overnight hotel guests pay an additional 4% assessment fee for each occupied hotel room per night during their stay. The TBID assessment is not a tax, but a self-assessment, which the 24 local hoteliers place upon themselves for occupied rooms, and is paid by overnight visitors. TBID assessment revenues provide a more dependable, long-term, sustainable revenue source to market Surf City USA globally without any tax burden on local residents.*
How much TBID assessment revenue is dedicated to VHB?
On February 1, 2019, a new TBID management district plan went into effect that changes the self- assessment rate at check-out of hotels paid by overnight visitors from 3% to 4%. This change will result in total estimated TBID annual revenues of $5.2 million to fund Visit Huntington Beach’s program of work. It also allowed the City of Huntington Beach to now receive over $1 million in new revenues for the general fund that were previously allocated to Visit Huntington Beach through Transient Occupancy Taxes (TOT).
What is Transient Occupancy Tax (TOT) and how is it used?
Huntington Beach’s overnight hotel guests pay a 10% TOT per room per night. The City of Huntington Beach now retains 100% of all TOT revenues as of February 1, 2019. (Previously, VHB had received 10% of TOT visitor tax revenues for destination marketing). There is a transition commitment by the City to fund VHB during the next years to support funding of three projects out of TOT funds from 2019 - 2021: IPW international travel trade and media hosted event in 2019, AMGEN Tour sponsorship in 2020, and International Surf Museum project.
How much TOT revenue is generated each year?
For Fiscal Year 2017-18, total TOT revenue collections were approximately $12.8 million. Starting February 1, 2019, one hundred percent (100%) of TOT visitor paid taxes go into the City’s general fund, with the exception of the three-year transition funds mentioned above.
What can TOT revenues retained by the City of Huntington Beach be used for?
TOT revenue retained by the City can be used for a variety of purposes such as street, sidewalk and parking deck improvements, police and fire protection, beach maintenance, park improvements, etc.
(Note: The average percent of TOT tax retained by City governments around the country is about 50%., with the remainder invested in destination marketing with the city's DMO. The City of HB retains 100%).
How much TOT revenue is dedicated to VHB?
Less than 1.2% of total TOT funds annually over the next three years for three specific projects, then VHB will no longer receive any TOT funds from the City.
Source of TOT/ TBID collection data: City of Huntington Beach. Source of Economic Impact data: “The Economic Impact of Tourism in Huntington Beach, California, 2017” research study by Tourism Economics.