Hotels ask for more time to pay city taxes so they can make payroll

The Hotel Nia in Menlo Park. Photo from the hotel's webpage.

Daily Post Staff Writer

Menlo Park’s City Council tomorrow night (April 21) will consider extending the deadline for hotels to pay their city taxes from the end of the month until July.

Hotels must pay a 12% tax for the stays that occur at their hotel. So if a couple stays at the Hotel Nia for a night at $212, the hotel would then pay the city $25 for that stay.

The taxes for the first financial quarter, which ended last month, are due next Thursday, but some hoteliers have told the city that they need the cash in order to pay bills or employees.

Pablo Cadenas, a manager with Sage Hotel Management, which owns Hotel Nia, wrote to the council last week asking to postpone the hotels’ taxes so the hotel could pay its workers.

A memo from city Finance Director Dan Jacobson mentions that other hotel operators have reached out to the city with the same question.

The request for relief from hotels indicates that a major source of city revenue might dry up this year. In the previous fiscal year, 15% of the city’s revenue, about $10 million, came from the hotel tax.

Jacobson is recommending that the council postpone the deadline until July 31. The city is anticipating to get about $1.5 million from the hotel taxes, according to Jacobson’s report.

The item is appearing under the council’s consent agenda, which is when a handful of items get approved in one vote with little discussion.