Morro Bay in line to tax vacation rentals

August 28, 2019

The Morro Bay City Council gave its support Tuesday to a plan to slap vacation rental operators with a 3 percent tax that is currently applied to hotels. [KSBY]

According to a city staff report, Morro Bay is the only jurisdiction in San Luis Obispo County that does not levy transient occupancy tax on vacation rentals, such as Airbnbs. The six other cities, as well as SLO County, each assess 2 percent tax on vacation rentals, with the revenue going to their respective tourism business improvement districts, according to the staff report.

While the council endorsed the plan to tax Airbnbs, it opted against applying the assessment to RV parks.

The tax on vacation rentals has yet to be finalized, but it is expected to take effect in early 2020. Currently, there are 250 registered vacation rentals in Morro Bay and another 90 applicants on a waiting list.

Most of the funding from the tax will reportedly go to tourism marketing campaigns. City officials plan to market Morro Bay through videos and blogs, which they say will include the accommodation providers that pay the tax.


I understand that the article correctly states that 2 % goes to Bis Improvement but if you want the real numbers, for instance, San Luis Obispo levies a %10 percent Transient Occupancy Tax + 1% Tourism Tax + 2% Business Improvement Tax. So the total tax on Vacation rentals is 13%. Did Morro Bay staff mislead the reporter? Or are they not going to have a TOT Tax (because that’s what the title of the article suggests.) If Morro Bay does adopt the same rate as San Luis Obispo, I conservatively calculate that they will receive about $795,000 per year from tourists on vacation rental alone.

Niles Q

The council actually passed five motions and this story only discusses one. The RV parks got just a one year reprieve and they will revisit it again. Another motion was to investigate forming a BID for restaurants too.

And another motion ordered staff to figure out how to use this money for infrastructure needs that would help increase tourism.

Whatever that means


They are going to use the tax dollars to entice more people to vacation in Morro Bay?…OMG….


Come On, you know they will use the new tax dollars to keep the bloated bureaucracy that is government growing and to be able to continue the outrageous salaries, benefits and pensions.


I Agree…and to entice more traffic crowded stores and restaurants and full parking spaces in the fondly remembered little fishing village we all knew Morro Bay to be…kind of sad…