Carmel-by-the-Sea Transient Occupancy Tax Rate: 10%

The Carmel-by-the-Sea transient occupancy tax is 10 percent of the rent paid for any lodging stay of 30 consecutive days or fewer.¹ The guest pays it, the operator collects it at the time rent is paid, and the operator remits it to the city. Most lodging properties also owe a separate per-night assessment through the Monterey County Tourism Improvement District on top of the 10 percent.

What the 10 Percent Applies To

Chapter 3.32 of the Carmel-by-the-Sea Municipal Code sets the rate and defines the lodging it covers. The tax attaches to the full rent for occupying any “hostelry,” a broad term that includes hotels, inns, bed and breakfasts, and any other structure where a guest stays for 30 days or less in exchange for payment.¹ On a $300 nightly room, that’s $30 in TOT per night. The operator holds the collected tax in trust for the city until it’s remitted.

A “transient” is anyone occupying lodging for 30 consecutive calendar days or fewer, with partial days counted as full days. A guest is a transient from check-in forward until the 30-day mark passes. There is one way out: if the operator and guest sign a written agreement at the outset for a stay of more than 30 days, the guest is not a transient and no TOT is owed. Without that written agreement upfront, the tax applies from day one regardless of how long the guest ultimately stays.¹

The Extra MCTID Per-Night Assessment

Carmel-by-the-Sea participates in the Monterey County Tourism Improvement District, so lodging operators collect a second charge on top of the 10 percent TOT.² The MCTID amount is a flat per-room-night figure that depends on how the property is classified, not on what the room costs:

Limited-service lodging (basic lodging without a full-service restaurant): $1.70 per occupied room night
Full-service lodging (properties with food and beverage service): $5.10 per occupied room night
Luxury full-service lodging (premium properties with restaurants, meeting spaces, or spas): $7.90 per occupied room night

These rates took effect July 1, 2025, and run through June 30, 2027.³ Properties that don’t fit any of the three categories owe $0.00 on the MCTID line.⁴ The spread between limited-service and luxury is meaningful over a full month of occupied nights, so check the classification carefully.

Exemptions and How to Claim Them

The exemptions under Section 3.32.030 are narrow. The tax does not apply to federal or California state officers and employees traveling on official business, foreign government officers and employees exempt under federal law or treaty, or any occupancy the city has no legal authority to tax.¹

An exemption isn’t automatic. The guest must claim it at the time rent is collected and sign a form prescribed by the city under penalty of perjury. The operator keeps the completed form on file. If the city audits and the signed certificate isn’t there, the operator owes the uncollected tax.

Stays of 31 or more consecutive days are outside the definition of a transient and don’t owe TOT, but that only holds if there was a written agreement up front for a stay longer than 30 days, or the guest actually stays through day 31 without interruption.

Filing and Remittance Schedule

Carmel uses a bi-monthly reporting cycle rather than monthly. Under Section 3.32.060, an operator files a return and remits the full tax owed by the last day of the month following the close of each two-month period.¹ So taxes collected in January and February are due by March 31. The return, provided by the city’s Department of Administrative Services, reports total rents charged and received along with tax owed. The city administrator can shorten the reporting period for a specific operator when needed to protect collection. If an operator ceases business, the return and full payment are due immediately.

What Happens if You Miss a Deadline

An operator who fails to remit the full amount on time loses the bi-monthly cycle and is switched to mandatory monthly reporting. Section 3.32.070 sets that monthly requirement at six consecutive months after the most recent missed payment. Monthly returns are due by the tenth calendar day of each month for the preceding month’s collections, and missing a monthly payment during that window triggers additional penalties and interest.¹ The specific penalty and interest percentages should be confirmed directly with the Department of Administrative Services, since they aren’t stated in the code sections reviewed.

Short-Term Rentals Are Restricted in Carmel

Before assuming you can list a home and start collecting TOT, know that Carmel-by-the-Sea prohibits short-term rentals outright in the single-family residential (R-1) zoning district, which covers most of the village’s housing.⁵ In commercial and R-4 districts, transient rentals are allowed in only two situations: properties that held a valid transient rental permit before Ordinance 2019-03 took effect and are grandfathered as legal nonconforming uses, and new units created under a housing incentive program that requires the owner to simultaneously create three new long-term rental units (one at low-income and one at moderate-income rates) with a conditional use permit.

Any residential unit rented for fewer than 30 consecutive days for payment counts as a transient rental and must collect TOT. Operating an unpermitted transient rental violates the municipal code and exposes the owner to enforcement.

Platforms Don’t Remove Your Responsibility

If a permitted property is listed on Airbnb, Vrbo, or a similar platform, the platform may collect and remit TOT on the operator’s behalf depending on its agreement with the jurisdiction. California’s marketplace facilitator rules can shift the collection obligation to the platform, but coverage varies locally. Even when a platform handles remittance, the operator remains responsible for confirming that the correct amount was collected and that returns were filed. The city’s Department of Administrative Services can confirm whether a given platform has a collection agreement with Carmel-by-the-Sea. If there’s a shortfall, the city pursues the operator, not the platform.

1
eCode360. City of Carmel-by-the-Sea, CA – Chapter 3.32 Transient Occupancy Tax
2
City of Marina. Monterey County Tourism Improvement District Renewal Resolution
3
City of Monterey. City of Monterey – Transient Occupancy Tax, CCFD, and TID Frequently Asked Questions
4
County of Monterey. Transient Occupancy Tax Online Return – Section: MCTID Assessment Fee (If Applicable)
5
City of Carmel. Transient/Short-Term Rental Information