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La Quinta passes indefinite stay on new short-term rental permits

  • Apr 19, 2021 | Jennifer Sokolowsky

La Quinta, California

La Quinta, California, has replaced its temporary moratorium on new short-term rental permits in residential areas with an indefinite stay that begins May 20, 2021.

New permits are still allowed in districts covered by the SilverRock Resort plan and in areas zoned for tourist-commercial and village-commercial uses. Right now, there are 1,237 permitted short-term vacation rentals in the city, and those existing permits are eligible for annual renewal.

The stay applies to residential neighborhoods throughout the city — including gated communities with homeowners associations that allow vacation rentals. On April 20, 2021, the City Council will discuss the possibility of re-allowing vacation rental permits within those communities. This would be done through a special application process requiring majority approval of HOA members. Currently, only six gated communities in La Quinta allow short-term rentals.

The council will periodically review the effects of the stay.

La Quinta recently amended its short-term rental law to create three categories of vacation rentals that may operate in the city and raised the annual fees for short-term rental permits to up to $1,250 per year.

Meanwhile, in nearby Rancho Mirage, a Riverside County Superior Court judge has issued an injunction allowing some short-term rental operators to receive vacation rental permits that the city denied.

The city banned short-term rentals, except where permitted by local homeowners associations, as of December 31, 2020. The city renews annual permits on January 1, and on that date, it denied permits to short-term rentals that were not operating in private neighborhoods, in accordance with the law that went into effect the day before.

A group of short-term rental operators sued the city over the ban.

The judge in the case issued a preliminary injunction stating that some properties that were denied permits should receive them. Another hearing in the case will take place May 10, 2021.

At issue are district maps the city used to determine the areas in which permits should be denied. The judge ruled that the maps were not approved and included in the city’s ordinance, and that several properties located in private communities that allow vacation rentals were wrongly denied permit renewals this year. However, the judge did say the city could still correct the ordinance to legally include the maps and use them to deny permits.

The city maintains its ban is still valid without the district maps.

Short-term rental operators in La Quinta and Rancho Mirage are required to collect occupancy tax from guests and file monthly occupancy tax returns with their respective cities.

While Airbnb collects transient occupancy tax (TOT) in Rancho Mirage, it doesn’t do so in La Quinta. Vrbo doesn’t collect TOT for hosts in either city. Hosts whose platforms don’t collect on their behalf are solely responsible for TOT compliance.

MyLodgeTax can help automate and simplify tax compliance for California short-term rental hosts. For more on lodging taxes in California, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.
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