Appeals Court Upholds San Diego Measure C Hotel Tax After Five-Year Legal Battle

California’s Fourth District Court of Appeal upheld a lower-court ruling that San Diego’s Measure C — the 2020 citizen initiative to raise the transient-occupancy (hotel) tax — is valid and required only a simple majority to pass, clearing a major legal hurdle after five years of challenges. Measure C, which was incorrectly listed on city ballot materials as needing a two-thirds vote but received 65.25% approval, will raise TOT rates (including recent increases to 11.75%, 12.75% and 13.75% near the convention center) and is expected to generate about $82 million in fiscal year 2026 and roughly $1.04 billion over the first 10 years. The revenue is earmarked to finance a long-sought expansion/modernization of the San Diego Convention Center and to fund homelessness programs and street repairs. Mayor Todd Gloria praised the ruling and said the City Council will pass implementing and clarifying ordinances so the city can secure financing and move forward. Due to a settlement with Fifth Avenue Landing LLC, construction on any expansion cannot begin until after 2026, and plaintiffs (California Taxpayers Action Network) are considering a rehearing request or petitioning the state Supreme Court, so legal challenges may continue.