San Francisco Hotel Tax Clarifications and Definitions, Measure K (November 2010)
Measure J, on the same ballot, is a competing measure.
Competing propositions J and K both alter the way that hotel customers who book their hotel rooms online are charged a hotel tax. Currently, hotel taxes are assessed so that when a customer books a hotel room through an online booking service such as Expedia or Orbitz, the hotel tax is only assessed on the amount that a hotel receives, not on the amount that the website charges the customer. If a website sells a room to an online customer for $150 a night, but only $120 of that goes to the hotel, the customer under current law is only charged a hotel tax on the lower amount. If Measure J passes, the customer will have to pay a hotel tax on the full amount paid to the online booking service, not the lower amount that the hotel actually receives for its room. This change is expected to generate $6 million a year.
However, Measure K only makes that change, and in a slightly different way than Measure J makes it, while Measure J also increases the overall hotel tax rate from 14% to 16%, while Measure K doesn't increase the hotel tax rate.
Under existing hotel tax laws in San Francisco, there is something called a "permanent resident" exemption to the city's hotel tax. This exemption was intended to protect low-income people who live in what are sometimes described as "residency hotels", such as YMCAs and YWCAs, from having to pay the city's hotel tax.
However, several airlines have said that their employees who frequently stay in San Francisco hotels should also be defined as falling under the "permanent resident" exemption. Litigation has occurred between airlines and the city on this point that has dragged on for a number of years, resulting in expensive legal bills for both the airlines and the city.
Measure K was drafted to conclusively end the dispute in favor of the idea that airlines should not be exempt. It does this by saying that only "natural persons" can be held to be exempt; corporations ("artificial persons") can never be considered exempt.
- San Francisco Voter Information Pamphlet
- Text of Measure K
- List of local San Francisco ballot measures on the November 2, 2010 ballot