Morro Bay City Council backs vacation rental tax

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.