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Solano supervisors place transient‑occupancy tax on November ballot and defer final data‑center tax decision after lengthy debate
Summary
The board voted unanimously to place a November measure to raise the unincorporated transient‑occupancy tax from 5% to 12%. A separate proposed business‑license update (Measure E) that would add or raise taxes on energy producers and establish a data‑center square‑foot fee (staff proposed $0.12/sq ft as a starting point) prompted extended discussion; supervisors asked staff for more analysis on higher rates, utility‑use taxes, air rights, and behind‑the‑meter generation and directed staff to return with additional options.
The Solano County Board of Supervisors on June 23 voted to put a measure on the November 3, 2026 ballot to increase the transient‑occupancy tax (TOT) in unincorporated county areas from 5% to 12% and delegated procedural steps to place the measure on the ballot. The resolution passed by a four‑to‑zero vote.
Separately, staff presented a proposed revision to the county business‑license tax code (Measure E) that would modernize licensing for commercial energy production and resource extraction and include a proposal to tax data centers in the unincorporated county. As staff explained, no unincorporated data centers currently exist; initial staff modeling proposed a $0.12 per‑square‑foot annual fee as a starting point for data centers, with alternative options including a utility‑users tax or higher per‑square‑foot rates.
The presentation and subsequent debate were long and technical. James, the county’s director of resource management, outlined fiscal modeling: at $0.12 per square foot a hypothetical 1,000,000‑square‑foot hyperscale facility would yield about $120,000 annually from the square‑foot business‑license tax alone, while a 2% utility‑users tax on 100 MW of electrical usage could yield roughly $1.75 million annually—illustrating how utility taxes typically generate larger revenues for electricity‑intensive uses than modest square‑foot fees.
Several supervisors urged a stronger stance. Supervisor Mashburn argued the county could demand more and warned that outside firms are ‘‘pillaging our resources’’ by exporting power and water, urging staff to consider higher square‑foot rates and other tools. Supervisor Williams and others suggested a county utility‑use tax could capture greater revenues but noted legal/implementation complications: county utility taxes typically apply to all unincorporated residents and would require legal review and a ballot measure if adopted.
Public speakers raised environmental and community concerns. A caller, Alicia Minion, had asked earlier that the county track hyperscale projects regionally because they can affect electricity rates and water supplies; speakers at the business‑tax discussion also raised noise, diesel back‑up generators, local air quality and aquifer impacts as issues that need mitigation in any project review.
Board members asked staff to return with additional analysis before finalizing Measure E’s language. Requested follow‑up items included: a) revised square‑foot rates that better approximate utility‑use tax revenue; b) legal analysis of a countywide utility‑users tax and whether it can be targeted to large users or must apply uniformly; c) options to tax behind‑the‑meter generation; d) evaluation of air‑rights or other value‑based approaches; and e) possible development‑agreement and community‑benefit structures that could be negotiated with a proponent.
Staff noted time constraints if the board wished to alter the ballot language and said there were two remaining board meetings before final submissions to the registrar of voters; supervisors directed staff to return with the requested analyses for further direction. The board did not adopt a final business‑license/data‑center tax today and instead continued the item for further study.
