Prop TC

Why Thrive LA opposes Prop TC

Measure TC would expand the collection base of Los Angeles's existing 14% transient occupancy tax (hotel tax) to cover the full price guests pay when booking through online travel platforms like Expedia and Booking.com. Currently, these platforms may remit the tax only on the lower wholesale room rate they pay hotels, excluding their own markups, service fees, and booking charges. Measure TC would require the tax to apply to those additional charges as well. The city estimates this would generate roughly $5 million per year in new general fund revenue. The framing is clever: supporters call this "closing a loophole," not raising a tax. But expanding what gets taxed is a tax increase by any honest definition. The 14% rate stays the same, but the dollars subject to that rate grow. Visitors booking through online platforms will pay more. At the margin, that means fewer bookings, less tourism spending, and a higher effective cost of visiting Los Angeles. The California Supreme Court ruled in 2016 that under many existing municipal ordinances, online travel companies are not "operators" and their markups are not taxable rent. Measure TC would legislatively override that legal framework for Los Angeles, redefining the tax base by ballot measure rather than addressing it through the courts or the legislature. This measure must also be evaluated alongside Measure TT on the same ballot, which would raise the hotel tax rate itself. Together, these two measures represent a significant increase in the tax burden on visitors and the hospitality industry at a time when Los Angeles should be making itself more competitive for tourism and convention business, not less. The revenue flows into the general fund with no dedicated spending purpose, no new oversight mechanism, and no sunset clause. It continues "until ended by voters," which in practice means forever. The city has not identified any spending cuts or accountability reforms to accompany this new revenue. Expanding the tax base without fiscal discipline is not reform. It is just more money for a city government that has not earned the public's trust with the revenue it already collects. Vote No on Measure TC.