By Aliss Higham
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Several U.S. states are adjusting the taxes charged on short-term stays in 2026 — a move that will raise the cost of hotel rooms, vacation rentals and other overnight accommodations for visitors in some places while giving local governments new ways to raise money for services and promotion.
What Is a Lodgings Tax?
A lodgings tax - also called a hotel tax, occupancy tax, transient accommodations tax or bed tax - is an extra fee added to the price of an overnight stay in hotels, motels, bed-and-breakfasts and short-term rentals. Governments use the revenue to pay for things visitors use (tourism promotion, convention centers, local infrastructure) or to support general budgets. Because these levies can be set at the state, county and city level, the final tax on a single room often combines several different charges.
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Michigan
Lawmakers in Michigan are backing a bipartisan proposal that would let local governments add an accommodations tax of as much as 3 percent to the cost of hotels, motels and short-term rentals — but only if local voters approve the change through a ballot measure.
The proposal would sit on top of the existing sales tax, convention-and-visitors-bureau levies and any other local fees that already apply to lodging.
“There are actual costs associated with short term rental tourists and we just want to provide enabling legislation, give communities the opportunity to generate revenues to offset those very real costs,” said Representative Mark Tisdel, one of the bill's sponsors.
Colorado
In Eagle County, voters approved Measure 1A in November 2025, doubling the county’s lodging tax from 2 percent to 4 percent. The higher rate will take effect on January 1, 2026.
Hawaii
Hawaii plans to add an extra 0.75 percentage point to its Transient Accommodations Tax, increasing the levy on hotel rooms and vacation rentals from 10.25 percent to 11 percent.
New York
Saratoga County is moving to raise its local hotel occupancy tax from 1 percent to 3 percent, increasing the cost charged directly to visitors who stay overnight in the county.
California
Several California jurisdictions are adjusting transient occupancy taxes. Menlo County and San Mateo County plan to raise their Transient Occupancy Tax (TOT) from 14.5 percent to 15.5 percent. In San Diego, officials are increasing the hotel-room tax to generate funds for infrastructure and homelessness services; the new local rates will vary by area, ranging from 11.75 percent to 13.75 percent.
Bottom Line
Some of these actions are statewide adjustments while others are local measures approved by voters or city and county officials. Travelers booking stays in affected areas should expect slightly higher final charges on their bills.
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