Avalara MyLodgeTax > Blog > State and Local News > Santa Barbara changes short-term rental enforcement in response to court ruling

Santa Barbara changes short-term rental enforcement in response to court ruling

  • Jun 1, 2021 | Jennifer Sokolowsky

Butterfly Beach, Santa Barbara, California

The city of Santa Barbara will dial down enforcement of short-term rental violations in response to a recent California appeals court ruling.

According to the city’s interim coastal zone enforcement policy, the city will only enforce short-term rental violations when it receives nuisance complaints about vacation rental properties. It will not proactively initiate enforcement, except when it comes to business licensing and transient occupancy tax (TOT) collection.

The new policy places city enforcement of short-term rentals “on the same basis” as it was before June 23, 2015.

The change was prompted by a recent California appeals court ruling overturning a 2015 law banning most short-term rentals from coastal areas of the city. Short-term rentals are allowed in commercial areas zoned for hotels.

Vacation rental property manager Theo Kracke filed a lawsuit challenging the 2015 rules, supported by the California Coastal Commission. The commission said that Santa Barbara’s ban violated the California Coastal Act, which requires affordable accommodations to be available to the public in the coastal zone. The Coastal Commission has become more involved in local regulation of vacation rentals in recent years, often supporting short-term rentals as essential to public access. 

In 2019, a superior court judge ruled that Santa Barbara must allow vacation rentals in the coastal zone. The most recent ruling by the Second Appellate District Court upholds the lower court’s decision. Regulation of short-term vacation rentals in the coastal zone must be decided by both cities and the Coastal Commission, Judge Steven Perren said in his ruling.

Vacation rental operators in the coastal zone who do not have business licenses must contact the City’s Finance Department by June 30, 2021, to get licensed and start complying with TOT requirements.

Operators of Santa Barbara commercial lodging establishments are required to register with the city for TOT, collect the tax from guests, and pay the tax to the city monthly.

While Airbnb and Vrbo collect local lodging taxes on behalf of their hosts at the time of booking in some California cities, neither marketplace collects taxes for hosts in Santa Barbara, so hosts are responsible for TOT compliance on their own.

MyLodgeTax can help automate and simplify tax compliance for 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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