Resolution of Intention to renew the Sonoma Tourism Improvement District (STID) on City Council Agenda
In 2012 the City of Sonoma created the STID for a period of three years, allowing the hotels and lodging establishments within city limits to assess a 2% fee on all hotel guests room charges on stays of no more than 30 days.
At the time of its adoption, the assessment amounted to approximately $400,000 per year, and the funds were used exclusively for promotional purposes. Renewed in 2014 for a ten-year period ending in June 2025, the STID now collects close to $1-million each year as hotel rooms in the city have increased in price, number and occupancy.
The intention to renew resolution indicates that a renewal will be for an additional ten years until 2035.
As stated in the staff report, “the annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue. Assessments will not be collected on: stays of more than thirty (30) consecutive days, stays by federal or state employees on official business, nor on stays by any officer or employee of a foreign government on official business.”
“The assessments levied for the STID shall be applied toward sales and marketing programs to market assessed lodging businesses in the City as tourist, meeting, and event destinations, as described in the Plan. Funds remaining at the end of any year may be used in subsequent years in which STID assessments are levied as long as they are used consistent with the requirements of this resolution and the Plan.”
The STID is sometimes mistaken for the city’s tax on hotel rooms, called the TOT. TOT funds are contributed to the city’s General Fund, which is trying to overcome a deficit of $2 million a year. The City also contributes funding to the Sonoma Valley Visitors Bureau and the Sonoma Chamber of Commerce, making support for tourism promotion and support in the city well over $1-million per year.
A half-percent sales tax increase is on this November’s ballot and will generate an estimated $2 million annually. No increase in the city’s TOT is planned at this time. The TOT charged hotel guests is currently 13%, and 1/13th of that is currently contributed to the city’s Affordable Housing Trust Fund.
The City Council meeting will take place beginning at 6pm on August 21 in the City Council meeting room. A final public hearing on adoption of the renewal will be held on November 6, 2024.
