What transient occupancy tax is
California cities call it TOT; Texas calls it hotel occupancy tax; Arizona taxes short stays as transient lodging under its transaction privilege tax (TPT); Hawaii has a transient accommodations tax. Whatever the name, the question for a midterm rental is the same: is the stay short enough to count as lodging?
Where the line is: state examples
| Topic | The tax | Taxed as lodging | Official source |
|---|---|---|---|
| California | Local transient occupancy tax (TOT) | Occupancies of 30 days or less | Rev. & Tax. Code 7280 |
| Texas | State hotel occupancy tax (6%), plus local | Stays of less than 30 consecutive days — exempt once a guest has stayed 30 days in a row with no break in payment, or from the start with written notice of a 30+ day stay | Comptroller publication 96-224 |
| Arizona | TPT, transient lodging classification | Stays of less than 30 consecutive days | Department of Revenue: short-term lodging |
| Illinois | Hotel operators’ occupation tax | Until a guest has occupied the room for 30 consecutive days | 35 ILCS 145/2 |
| New York State | Sales tax on hotel and short-term rental unit occupancy | Until a guest has stayed 90 consecutive days | Tax Bulletin ST-331 |
| New York City | Hotel room occupancy tax, plus the city’s local sales tax | Until a guest has stayed 180 consecutive days | NYC Department of Finance |
| Florida | Sales tax on transient rentals, plus local taxes | Rentals of six months or less | Department of Revenue GT-800034 |
| Hawaii | Transient accommodations tax (TAT), plus each county’s TAT | Rentals of less than 180 consecutive days | Department of Taxation: rentals |
The same three-month stay can be tax-free in one state and taxable in the next — and the exact conditions (a written lease, uninterrupted payment, when the clock starts) are in each state’s rules.
Transient occupancy tax by stay length
| Topic | Nightly (short-term) | Monthly (mid-term) | Yearly (long-term) |
|---|---|---|---|
| Usually | Taxed as lodging | Depends on the state’s line: 30 days, 90, 180 or six months | Not a lodging tax — a residential rental |
| Who collects | The host, or the platform in many places | The host on direct stays; the platform only on its own bookings | No lodging tax to collect |
What it means in practice
- Register where you need to. If you take any short stays, you may need a lodging-tax license with the state, the city or both.
- Know your line. A stay that crosses the threshold may be exempt from the start or only after the threshold — read your state’s rule.
- Say it on the invoice. When no tax applies, a line saying why saves a question from a corporate payer — see the corporate housing invoice template.
- Ask a CPA. Lodging taxes stack (state, county, city, special districts) and change often. This page lists published thresholds with their official sources; it is general information, not tax advice.
Related terms
- 30-day rule — the separate question of when a guest becomes a tenant. See the 30-day rule.
- MTR — a mid-term rental, also called a medium-term rental. See what MTR means.
- Corporate housing — furnished mid-term stays paid for by a business. See corporate housing.
Running nightly stays that are taxed next to monthly ones that aren’t? See Nexxus mid-term rental software, or open the live demo set up for mid-term — no sign-up.
Transient occupancy tax FAQ
What is transient occupancy tax?
A tax on short-term lodging — hotel rooms, vacation rentals and furnished homes rented for short stays — usually a percentage of the rent that the guest pays and the host or platform sends to the government. “Transient” means the stay is short enough to be treated as lodging rather than a residence.
Do mid-term rentals pay occupancy tax?
It depends on where the home is and how long the stay is. In some states a stay of 30 days or more is exempt from lodging taxes; in others the line is 90 days, 180 days or six months, so a typical three-month stay can still be taxed. Check with your state and city revenue departments or a CPA.
Is there an occupancy tax exemption for stays over 30 days?
In many places, yes: California lets cities and counties tax occupancies of 30 days or less, Texas exempts guests who stay 30 or more consecutive days with no break in payment from its state hotel tax, and Arizona treats stays of 30 days or more as residential rentals. Other states set longer lines, and local rules add their own conditions. This is general information, not tax advice — ask your CPA.
What is the difference between TOT and TPT in Arizona?
Arizona’s transaction privilege tax (TPT) is a tax on doing business. Short stays fall under its transient lodging classification — lodging of less than 30 consecutive days — which works like an occupancy tax. Longer stays are residential rentals, which Arizona cities stopped taxing on January 1, 2025.
Does Airbnb collect occupancy tax for me?
In many places Airbnb collects and pays certain occupancy taxes on bookings made through it, but not everywhere and not every tax. It doesn’t cover stays you take directly. Check Airbnb’s tax pages for your area, and your own registration with the state and city.
Sources
Every threshold was re-checked on the state’s or city’s own site on October 7, 2026. Tax rules change — confirm the current rules with the state and your CPA.
- California: Revenue and Taxation Code 7280
- Texas Comptroller: hotel occupancy tax and exemptions (publication 96-224); Texas Tax Code 156.101
- Arizona Department of Revenue: short-term lodging and residential rental guidelines; A.R.S. 42-5070
- Illinois: 35 ILCS 145/2 and 145/3 (Hotel Operators’ Occupation Tax Act)
- New York: Tax Bulletin ST-331, Hotel and Short-Term Rental Unit Occupancy (updated July 9, 2026), Tax Law 1101, and NYC Department of Finance, hotel room occupancy tax
- Florida: Statutes 212.03 and Department of Revenue brochure GT-800034 (revised October 2025)
- Hawaii Department of Taxation: rental activity and the transient accommodations tax; HRS 237D-1
- Airbnb Help Center: how tax collection and remittance by Airbnb works and areas where Airbnb collects and remits taxes