The California Tourism Assessment Fee is a mandatory annual charge that travel-industry businesses pay to fund Visit California, the nonprofit that markets the state as a travel destination. You owe it if your business earned at least $1 million in California gross receipts in the most recent tax year, more than 1% of those receipts came from travel and tourism, and you operate in one of five designated industry categories. The California Office of Tourism collects the fee under the California Tourism Marketing Act, Government Code Section 13995 and following.1California Office of Tourism. About Us
Who Owes the Fee
Two numbers decide the question. Your California gross receipts for the most recent tax year have to reach $1 million, and more than 1% of those receipts have to come from travel and tourism revenue. Miss either threshold and you don’t owe.2California Legislative Information. California Code GOV 13995.65
The five assessable industry categories are:
- Accommodations: hotels, motels, resorts, vacation rentals, and similar lodging
- Restaurants and retail earning tourism-related revenue
- Attractions and recreation: theme parks, museums, outdoor recreation providers, and entertainment venues
- Transportation and travel services: airlines, shuttle services, travel agencies, and tour operators
- Passenger car rental companies
If your business falls in one of these categories and you receive a filing notice from the California Office of Tourism, you are legally required to file, even when you believe an exemption applies to you.3California Office of Tourism. Assessable Business
How Much You Pay
The rate depends on your category, and four of the five use the same annual formula based on travel and tourism revenue:
- Accommodations: $1,950 per $1 million of travel and tourism revenue (0.195%)
- Restaurants and retail: $975 per $1 million (0.0975%)
- Attractions and recreation: $975 per $1 million (0.0975%)
- Transportation and travel services: $975 per $1 million (0.0975%)
- Passenger car rental: 3.5% of monthly revenue
California gross receipts means revenue from sales within the state, minus returns and allowances, excluding collected sales taxes.4California Office of Tourism. Definitions Passenger car rental is the outlier: it’s calculated as a percentage of monthly revenue rather than an annual per-million formula.5California Office of Tourism. Tourism Assessment Program – Frequently Asked Questions
Revenue You Can Exclude
Before applying the rate, you subtract certain receipts from your travel and tourism total.
Lodging providers don’t owe the assessment on revenue from a guest who stays 31 continuous nights or longer. Someone staying that long isn’t really a tourist, and the receipts come out of the calculation.6California Office of Tourism. Calculate Assessment
Travel agencies, tour operators, packagers, and wholesalers are exempt entirely if less than 20% of their California gross revenue comes from travel and tourism occurring within the state. An agency that mostly books international or out-of-state trips would typically fall below this threshold.7Legal Information Institute (LII) / Cornell Law School. California Code of Regulations Title 10 5353 – Tourism Assessment Form
Other specific revenue streams also come out of the base: rentals longer than 30 days of recreational watercraft and marine equipment (canoes, houseboats, sailboards, and similar items), interstate transportation and diesel fuel sales, and regular-route bus service crossing state lines.4California Office of Tourism. Definitions
One warning: claiming an exemption does not excuse you from filing. If you received a notice, you file. Filing is what formally establishes exempt status, and ignoring the notice because you think you qualify is what turns a $0 assessment into a penalty case.
Filing the Assessment
Businesses that receive a notice register through the Office of Tourism’s online portal, which creates an account for future filings.8California Office of Tourism. Register User The Tourism Assessment Form asks for your total California gross receipts and the percentage derived from travel and tourism, using the same reporting period you use for annual tax purposes.6California Office of Tourism. Calculate Assessment
An authorized representative signs and certifies the form under penalty of perjury. That signature is personal attestation that your revenue figures and any claimed exemptions are accurate, so keep detailed records showing how you arrived at your tourism revenue percentage and any exempt revenue you subtracted.7Legal Information Institute (LII) / Cornell Law School. California Code of Regulations Title 10 5353 – Tourism Assessment Form
Passing the Fee to Customers
State law lets you pass some or all of the assessment on to customers, and you are not required to itemize it as a separate line on a receipt or invoice. Any amount you pass along does not count as part of your gross receipts for future assessments or for sales tax.2California Legislative Information. California Code GOV 13995.65
Lodging businesses that do itemize should account for the federal Rule on Unfair or Deceptive Fees, which took effect May 12, 2025. Under that rule, any mandatory charge a hotel or short-term lodging provider knows about and can calculate upfront has to be included in the total price shown to guests. You can still list the tourism assessment as a separate line on the bill, but the total price displayed during booking must be the most prominent figure and must already include it.9Federal Trade Commission. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions
Deducting It on Your Taxes
The assessment is a mandatory regulatory fee, which makes it a deductible business expense on your federal return. Sole proprietors and single-member LLCs report it on Schedule C (Form 1040), line 23, the line for licenses and regulatory fees paid to state or local governments.10IRS. 2025 Instructions for Schedule C (Form 1040) – Profit or Loss From Business Corporations and partnerships deduct it through their respective business expense lines. Hold on to your filings and payment receipts with your tax records.
What Happens If You Don’t File
The state can add a penalty of up to 10% of the unpaid assessment to cover enforcement costs. Interest starts accruing on the unpaid balance 30 days after the Office of Tourism issues a notice of failure to pay.7Legal Information Institute (LII) / Cornell Law School. California Code of Regulations Title 10 5353 – Tourism Assessment Form
Noncompliance can also trigger an audit, in which the Office of Tourism reviews your gross receipts records and the basis for any exemption you claimed. Businesses that never filed at all tend to fare worst, because they have no documented position to defend. Filing on time, even when you expect to owe nothing, is the cheapest option available.