Los Angeles voters are preparing to vote on Measure TC, a ballot initiative that seeks to change how hotel taxes are collected from online travel companies. The measure will be decided on June 2nd.

Addressing a Tax Discrepancy

Currently, online travel agencies like Hotels.com and Trivago often pay taxes based on the wholesale price they pay to hotels – a discounted rate. This can result in a lower overall tax burden for consumers compared to booking directly with the hotel. Measure TC aims to correct this by requiring these companies to calculate and remit taxes based on the markup they add to the room rate.

Potential Revenue and City Services

City officials estimate that Measure TC could generate approximately $5 million annually. These funds would be allocated to essential city services, including infrastructure improvements and maintenance of public spaces like sidewalks, streets, and parks. The initiative is seen as a way to address a growing budget shortfall facing the city.

Leveling the Playing Field for Hotels

Supporters of Measure TC, including City Councilmember Tim McOsker, argue that it will create a more equitable environment for local hotels. Hotels contend they are at a competitive disadvantage due to the lower tax rates paid by online travel companies.

Broad City Council Support

The Los Angeles City Council unanimously approved placing Measure TC on the ballot. Councilmember McOsker was chosen to draft the official argument in favor of the measure, demonstrating strong support for its passage.

Additional Hotel Tax Measure

A related measure will also be on the June 2nd ballot, proposing an increase in the hotel room tax rate from 14% to 16% until 2028, then decreasing to 15%. This increase would apply to all booking channels, including online travel companies.

Lack of Formal Opposition

Notably, there is no formally registered opposition to Measure TC. No arguments against the measure were submitted to the city for inclusion on the ballot. This suggests a general consensus that the current system is unfair and that Measure TC offers a reasonable solution.

According to McOsker, the core principle of the measure is to ensure that all parties pay the full amount of tax equivalent to a direct booking, streamlining tax collection and fostering competition for local hotels.