What it means
The bed tax is the 5% the City of Scottsdale adds to every hotel room, resort suite and short-term rental booked for 29 days or less. On your folio it is the transient lodging tax or transient occupancy tax; at City Hall it is the bed tax, and the pot it fills is the Tourism Development Fund, which council agendas shorten to TDF. The phrase comes up whenever the city spends money on something a visitor would use: a stadium renovation, a WestWorld upgrade, a grant to a festival, the destination marketing contract.
The logic is that visitors pay it and the city spends it on bringing more visitors. The budget guide explains how that fits a city that runs on sales tax; this page explains the word and the fund.
Where you’ll meet it
On every hotel bill in the city; in the agendas of the Tourism Development Commission, the resident board that recommends how the fund is spent; in the annual contract with Experience Scottsdale, the destination marketing organization; and in the fine print of big tourism projects, from the Scottsdale Stadium rebuild run by the Charros to event sponsorships. If you are choosing where to stay, the bed tax is the same 5% everywhere in the city; Paradise Valley and Phoenix set their own.
Where the word came from
“Bed tax” is the national nickname for a lodging tax, older than Scottsdale’s version and claimed by nobody. What Scottsdale added was the dedication. The city has long charged a transient lodging tax, and for decades a share of it went to the Scottsdale Chamber of Commerce, which ran the city’s tourism marketing through a convention and visitors bureau division. In 2001 the city moved that function into a separate nonprofit, the Scottsdale Convention & Visitors Bureau, with its own contract for the marketing half of the tax; the Chamber lost its largest program and the bureau, renamed Experience Scottsdale in 2016, became the better-funded of the two. The Chamber guide tells that split from the Chamber’s side.
The rate and the split as they stand came from the voters. In March 2010 Scottsdale residents approved raising the bed tax from 3% to 5%, effective July 1, 2010, with the proceeds dedicated to tourism: by ordinance, 50% to destination marketing and 50% to tourism-related event support, tourism research, tourism-related capital projects and other eligible uses. Experience Scottsdale describes its funding as bed-tax revenue from Scottsdale resorts, hotels and other transient lodging, under contracts with both the city and the Town of Paradise Valley, which taxes its own resorts and buys marketing from the same organization. The voters guide lists the 2010 vote among the city’s landmark tax decisions.
The capital half is where the fund becomes visible. The city committed up to $35 million of hotel taxes to the 2019 renovation of Scottsdale Stadium, the Giants’ spring home, on the argument that spring training fills the hotels that pay the tax. WestWorld improvements, event grants and tourism studies come from the same half.
What it is not
The bed tax is not the resort fee, the hotel’s own daily charge for amenities, which the hotel keeps; see resort fee. It is not the sales tax, which hotels also collect at the city’s 1.7% rate plus state and county. And it is not general revenue: by ordinance it cannot pay for police, parks or water, which is why the council treats it as a separate account.
The fine print
The rate stack on a Scottsdale room is the 5% transient lodging tax plus the city’s 1.7% transaction privilege tax, 6.7% in city taxes, before the state’s and Maricopa County’s rates are added. The tax applies to stays of 29 days or less; a 30-day booking escapes it, which is why some extended-stay guests sign for exactly a month. Short-term rentals owe it like hotels, and the state’s 2016 law barring cities from banning them, covered in the short-term rental entry, did not touch the tax.
The marketing contract is the fund’s most scrutinized line. Experience Scottsdale, a 501(c)(6) with nearly 40 full- and part-time employees and a volunteer board drawn from hospitality and business, markets the city as a luxury destination under a contract the city audits; the City Auditor reviewed the destination marketing contract in November 2016. The organization also serves Paradise Valley under a separate agreement, which is how the two towns, with very different budgets, share one tourism brand.
The origin date of the bureau is argued. Experience Scottsdale says the Chamber’s tourism arm began in 1987; a 2017 city report says 1977; the historian Joan Fudala writes that the function spent more than fifty years inside the Chamber. This site reports the disagreement. What is not argued is the dependence: when tourism dips, as in 2020, the fund drops with it, and Experience Scottsdale’s budget follows the hotels’ occupancy. For the tax the fund sits beside, see sales tax and TPT; for who spends high season in the beds, see winter visitor.