NEWPORT BEACH : Late Fee on Bed Tax May Be Hiked to 1.5%

The City Council today is expected to raise the interest rate for late payments of the transient occupancy tax by the owners of hotels and vacation rentals.

Glen Everroad, Newport Beach revenue manager, has recommended that the late fee be boosted from 0.5% per month to 1.5% per month. The move, he said, will bring the city’s late fee rates into line with contemporary interest rates. It will not bring in any substantial revenue, he said. The so-called bed tax is a 10% levy on the price of overnight lodging.

“This (late fee) is intended to give (hotel owners and others) a little incentive to pay the money” on time, Everroad said. The city has 28 hotel and motels, about 30 agents for vacation rental properties and about 600 summer vacation rental spots that are affected by the tax. Only two of those accounts are past due, he said.

“We just want to bring this (tax rate) in the ‘90s,” Everroad said, adding that the rate has not been changed since 1965. The city last summer raised the transient occupancy tax to its current 10% but neglected to raise the late fee rate.

The transient occupancy tax ordinance, if passed, would exempt airline personnel who maintain a rental agreement with local hotels.