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1. What applications are required for a new hotel business?

Hotel owner will need to fill out a business license application and a Transient Occupancy Registration Permit Application. 

2. Are there any deposits due to the City when applying for a hotel business license and Transient Occupancy Registration Permit?

Yes, the business licenses account requires a $100 deposit. The transient occupancy registration account requires a deposit that shall not be greater than twice the business’s estimated average liability for the period for which the business files returns or ten thousand dollars ($10,000), whichever amount is the lesser.

3. When will I receive the Hotel Transient Occupancy Tax (TOT) and Business License deposit refund?

Hotel Transient Occupancy Tax (TOT) deposits are refundable upon the close of your business. Business License deposits may be requested after two consecutive full fiscal quarters of operation are reported and paid by the due date. Refund requests must be made in writing.

4. What is the Transient Occupancy Tax (TOT)?

TOT is a tax collected from guests that occupy or have a right to occupy a living space or establishment for 27 days or less. This tax must be remitted to the City of Modesto.

5. What is the current Transient Occupancy Tax (TOT) rate?

TOT is currently nine percent (9%) of the rent and must be collected by the operator from the guest. 

6. What hotel fees are considered TOT Taxable?

A list of lodging fees which should be captured as part of the definition of “rent” and subject to the City’s Transient Occupancy Tax (TOT) can be viewed on the Exemptions to Transient Occupancy Tax (TOT) web page.

7. When is the Hotel Transient Occupancy Tax (TOT) reporting period?

TOT must be reported and paid in our office, online, or postmarked by the 20th day of the close of each month. 

Example 

Reporting Period	Payment Due Date (postmark date)
July 1 – July 31	August 20
August 1 – August 31	September 20
September 1 – September 30	October 20

8. What is the Mill Tax (Business tax) Rate?

As the operator, you are responsible for paying your quarterly mill tax of .002 based on your Gross Receipts.  The mill tax is not a fee that is collected from the guest. 

9. When is the Mill Tax reporting period?

Mill taxes must be reported and paid to the City within one calendar month of the close of each reporting period.

 

Mill Tax reporting periods and payment schedule:

Reporting Period	Payment Due Date (postmark date)
July 1 – September 30	October 31
October 1 – December 31	January 31
January 1 – March 31	April 30
April 1 – June 30	July 31

10. How do I make a TOT and Mill Tax Payment?

You can pay your TOT and Mill Taxes in person, via mail, or online.  

In person payment can be made Monday through Friday, 8:30 a.m. to 4:30 p.m., except for holidays, at:

1010 10th Street Suite 2100 (2nd floor)
Modesto, CA 95354

 

TOT & Mill Tax payments can be mailed to our office along with the TOT reporting form and the Declaration of Gross Receipts Form. Payments postmarked after the due date are considered late and will accrue penalties. 

Mail payments to:

Business License
PO Box 3442
Modesto, CA 95353 

Pay your Taxes Online

TOT tax payments and Mill tax payments are made separately. For TOT tax payments you will need to contact our office to provide you with the account number and the pin required to make the online TOT tax payment.

Ways to Pay

11. Do I have to file the Quarterly Declaration of Gross Receipts and the Monthly Transient Occupancy Tax Report even if I don’t have reportable revenue for the quarter?

Yes, you must file your Transient Occupancy Tax report and report your gross receipts by filing the Declaration of Gross receipts, even if they are zero, to keep your license current and active.  

12. If I have additional questions, who do I contact?

If you have any questions, reach out to the City of Modesto by emailing BusinessLicenses@modestogov.com or calling 209-577-5389.