San Diego’s 2 percent hotel room fee that helps pay for marketing the city as a tourist destination has survived yet another legal challenge.

A Superior Court judge agreed Tuesday to dismiss a lawsuit filed last year by the California Taxpayers Action Network, which argued that the fee is illegal because it is really a tax and was never voted on by the electorate.

The suit not only sought to bar the city from continuing to levy the fee but also asked for the repayment of funds paid by hotel customers since 2012, when the San Diego City Council renewed the hotelier-run Tourism Marketing District and the marketing fee for 39½ years.

In a court hearing earlier this year, the judge signaled that the claims made by the taxpayer group were not likely to prevail.


Just last year, a similar suit filed years earlier by attorney Cory Briggs on behalf of San Diegans for Open Government was dismissed after the City Council decided to eliminate the tourism surcharge for all small lodging businesses and home-sharing rentals under 70 rooms.

The Tourism Marketing District and Briggs are still fighting over the payment of legal fees.

“We are very pleased that the court recognized that this case had no merit,” said Scott Hermes, chairman of the Marketing District board. “Now that all cases against the TMD renewal have been defeated in Superior Court, we put this long distraction behind us and continue to focus on growing hotel stays for the City of San Diego for the good of everyone who benefits from the City’s TOT dollars,”

In issuing his ruling, Superior Court Judge Kenneth Medel concluded that the Taxpayers Action Network had no standing to sue because it had no member that actually paid the assessment.


The city and the marketing district also had been fighting another lawsuit filed late last year that challenged the constitutionality of the tourism fee. They prevailed in that case as well, although it is currently on appeal, said attorney Michael Colantuono, who represented the Tourism Marketing District.

The tourism marketing fee, which raises about $39 million a year, applies to all lodging businesses of 70 rooms or more.


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