Elections › Measures › Gilroy hotel tax (TOT) increase
Gilroy hotel tax (TOT) increase
The ballot question
To maintain critical City services such as street/pothole repair, park and recreation programs, emergency preparedness for storms, flooding and wildfires, and police and fire response shall the City of Gilroy measure raising the Transient Occupancy Tax (hotel tax) rate from 9% to a maximum of 13%, set by Council resolution, providing $700,000 annually paid only by hotel/lodging guests, with annual independent audits, that cannot be taken by Sacramento, until ended by voters, be adopted?
What it does
An increase of Gilroy's transient occupancy tax (TOT) — the tax visitors pay on hotel, motel and short-term-rental stays of 30 days or less — from the current 9% to a not-to-exceed rate of 13%. If voters approve, the council would set the actual rate anywhere up to 13% by resolution.
Gilroy's 9% rate has not changed since 1983 and is among the lowest in Santa Clara County (the county average is about 12%; Morgan Hill charges 11%). The tax is paid by lodging customers, not residents.
The measure is now on the November 3, 2026 ballot — the City's elections page lists it with the official ballot question, which cites about $700,000 a year in additional revenue. A simple majority is required to pass. Ballot arguments are due to the City Clerk by August 11, 2026, and rebuttals by August 18.
💰 Fiscal impact
At 9% the TOT generates about $1.8 million a year for the general fund; the official ballot question puts the additional revenue at the maximum 13% rate at about $700,000 annually. Placing the measure on the ballot could cost the city up to $100,000.👎 Concerns / opposition
Some hotel operators have raised concerns about competitiveness and sales impacts.Path to the ballot
chronology — newest first- 🚩 2026-08-11 Ballot argument deadline — 5:00pm ↗ Arguments for or against the measure are due to the City Clerk by 5:00pm August 11, 2026. Rebuttals to arguments are due by 5:00pm August 18, 2026. City of Gilroy
- 🚩 2026-07-23 Official ballot question posted — measure is on the November ballot ↗ The City's elections page now lists the Transient Occupancy Tax Rate Measure as the city's one measure on the November 3, 2026 ballot, with the official ballot question text and a link to the full resolution and ordinance. City of Gilroy
- 📰 2026-02-19 Dispatch: City council considers Gilroy hotel tax increase ↗ Coverage of the proposal: current 9% rate unchanged since 1983, county average about 12%, and revenue potential rising from $1.8M to as much as $2.6M a year. Gilroy Dispatch
- 🚩 2026-02-09 Council directs staff to draft a ballot question ↗ At its February 9 meeting the City Council directed staff to return with a proposed November ballot question raising the TOT to a not-to-exceed rate of 13%. Gilroy Dispatch
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