Overview: Are Short-Term Rentals Allowed in Folsom, CA?

Yes, short-term rentals are explicitly allowed in Folsom, California, subject to specific regulations and compliance requirements. The City of Folsom permits vacation rentals (including those operated through platforms like Airbnb, Vrbo, and Vacasa) as long as operators strictly adhere to all applicable local laws, zoning requirements, and tax obligations.

A short-term rental in Folsom is defined as a furnished apartment, house, or condominium rented on a temporary basis for less than 30 days. The city has established a comprehensive regulatory framework that includes business licensing, occupancy limits, tax collection, and zoning compliance to ensure STR operations remain compatible with residential neighborhoods.

How to Start a Short-Term Rental Business in Folsom

Step-by-Step Process:

1. Property Assessment and Compliance Verification

   • Confirm your property meets zoning requirements for vacation rentals
   • Verify compliance with homeowners' association (HOA) or covenant, condition, and restriction (CC&R) rules if applicable
   • Assess whether your property qualifies as an accessory use to your primary residence

2. Business License Application

   • Obtain a City Business License Certificate before operating
   • Application available through the City's Finance Department

3. TOT Registration and Certificate

   • Register for Transient Occupancy Tax collection
   • Obtain TOT certificate to legally collect taxes from guests
   • Partner with platforms like Airbnb to include TOT as a line item

4. Ongoing Compliance Setup

   • Establish systems for quarterly TOT remittance
   • Implement guest management protocols to ensure compliance with occupancy limits
   • Develop standard operating procedures for property management

Required Documents, Permits, Licenses, and Guidelines

Mandatory Requirements:

Business License Certificate

• Required under Folsom Municipal Code Chapter 5.04
• Application through City Finance Department
• Must be obtained before commencing operations

Transient Occupancy Tax (TOT) Certificate

• 8% tax rate on gross rental income
• Registration required for tax collection
• Quarterly remittance obligations
• Certificate does not authorize unlawful business operations

Short-Term Rental Permit (if operating in unincorporated areas)

• For properties outside city limits but within Sacramento County
• Application through RentalScape platform
• Combined permit and business license fee: $452.66 (nonrefundable)
• Annual renewal required through same platform

Zoning and Use Permits:

Conditional Use Permit

• Required for vacation rentals hosting large groups or special events
• Applies to weddings, receptions, fundraisers, and similar gatherings
• Must comply with Bed & Breakfast Inn requirements under FMC Chapter 17.27

Documentation Requirements:

Property Documentation

• Proof of ownership or legal right to operate
• Compliance verification with zoning codes
• HOA/CC&R compliance confirmation where applicable

Tax Compliance Records

• Guest registration and rental period tracking
• Quarterly TOT remittance records
• Platform reporting for tax collection

Specific Regulations for Short-Term Rentals

City of Folsom Regulations:

Occupancy Limits

• Maximum of three (3) paying guests per dwelling
• Applies regardless of property size or configuration
• Enforced under FMC Section 17.58.050

Accessory Dwelling Unit (ADU) Restrictions

• ADUs are explicitly prohibited as vacation rentals
• Covers both new and existing ADUs
• Enforced under FMC Section 17.105.140J

Tax Obligations

• 8% Transient Occupancy Tax on gross rental income
• Quarterly remittance to City through HdL Companies
• Tax collection typically passed to guests through platform integration

Business Operations

• Must maintain accessory use status (cannot become primary use)
• Subject to neighborhood compatibility standards
• Required to comply with all applicable building and safety codes

Sacramento County Regulations (for unincorporated areas):

Eligibility Requirements

• Property owner or long-term renter must live on property minimum 6 months annually
• Must remain accessory use to primary residence
• ADUs constructed after January 1, 2020, cannot be used for STRs

Permit Standards

• Short-Term Rental Permit required in addition to business license
• Operating conditions to mitigate negative neighborhood impacts
• Compatibility requirements with surrounding properties

Application Process

• Online application through RentalScape platform only
• No in-person, mail, fax, or email applications accepted
• Comprehensive review process before permit issuance

State-Level Considerations:

California Short-Term Rental Laws

• Must comply with all state health and safety regulations
• Subject to local jurisdiction authority over land use
• Platform collection agreements for tax remittance

ADA and Accessibility Requirements

• Properties must meet Americans with Disabilities Act standards where applicable
• Reasonable accommodations for guests with disabilities

Contact Information for Local Authorities

City of Folsom - Short-Term Rentals:

Finance Department - TOT Administration

• Phone: (916) 235-9984
• Email: FolsomTOT@hdlgov.com
• HdL Companies Partnership: City of Folsom TOT administration partner
• Address:
  • City of Folsom
  • C/O HdL Support Center
  • 8839 N Cedar Ave #212
  • Fresno, CA 93720
• Hours: Monday - Friday, 8 a.m. - 5 p.m.
• Website: folsom.hdlgov.com/

City of Folsom - General Contact

• Phone: (916) 461-6000
• Address: 50 Natoma Street, Folsom, CA 95630
• Business License Inquiries: Available through Finance Department
• Website: www.folsom.ca.us/government/finance/short-term-rentals

Sacramento County - Unincorporated Areas:

Planning and Environmental Review (PER) Department

• Email: sacplan@saccounty.gov
• STR Application Portal: sacramento-ca-str.deckard.com/
• Website: planning.saccounty.net/applicants/Pages/Short-Term-Rental-Permits.aspx
• Permit Information: Available through RentalScape platform only

Additional Resources:

Code Enforcement

• Phone: (916) 461-6000 (City of Folsom)
• Reporting: Available through City website
• Violations: Subject to municipal code enforcement procedures

Links to Source Pages

City of Folsom Official Resources:

• Short-Term Rentals Main Page: www.folsom.ca.us/government/finance/short-term-rentals
• Vacation Rentals Regulations: www.folsom.ca.us/government/community-development/planning-services/vacation-rentals
• Business License Information: www.folsom.ca.us/government/finance/business-licenses
• Transient Occupancy Tax: www.folsom.ca.us/government/finance/transient-occupancy-tax-tot
• Folsom Municipal Code - Business Licenses: www.codepublishing.com/CA/Folsom/#!/Folsom05/Folsom0504.html#5.04
• Folsom Municipal Code - ADU Restrictions: www.codepublishing.com/CA/Folsom/#!/Folsom17/Folsom17105.html#17.105.140
• Folsom Municipal Code - Occupancy Limits: www.codepublishing.com/CA/Folsom/#!/Folsom17/Folsom1758.html#17.58.050
• Folsom Municipal Code - TOT Requirements: www.codepublishing.com/CA/Folsom/#!/html/Folsom03/Folsom0314.html
• Bed & Breakfast Inn Regulations: www.codepublishing.com/CA/Folsom/#!/Folsom17/Folsom1727.html#17.27
• HdL Companies TOT Portal: folsom.hdlgov.com/

Sacramento County Resources:

• Short-Term Rental Permits: planning.saccounty.net/applicants/Pages/Short-Term-Rental-Permits.aspx
• STR Permit Application Portal: sacramento-ca-str.deckard.com/
• STR Permit FAQ Handout: planning.saccounty.net/applicants/Documents/Short_Term_Rentals_Handout_v6.1.pdf
• Sacramento County Zoning Code - STR Standards:
  • Chapter 3: planning.saccounty.net/LandUseRegulationDocuments/Documents/Zoning-Code/SZC_Chapter3.pdf (page 3-136)
  • Chapter 6: planning.saccounty.net/LandUseRegulationDocuments/Documents/Zoning-Code/SZC_Chapter6.pdf (page 6-58)

Important Notes for Investors:

Upcoming Regulatory Changes: The City of Folsom is currently updating zoning codes with new vacation rental regulations anticipated for adoption in mid-2026. Investors should monitor the Zoning Code Update page for changes that may affect operations.

Non-Compliance Consequences: Operating without proper licenses, permits, or in violation of municipal codes can result in fines, permit revocation, and legal action. The TOT certificate explicitly does not authorize unlawful business operations.

Platform Integration: Most major STR platforms (Airbnb, Vrbo, etc.) have systems in place to collect and remit the 8% TOT directly, simplifying compliance for operators who properly configure their listings.

This comprehensive regulatory framework positions Folsom as a moderately regulated market for short-term rental investments, with clear pathways for compliant operations and defined consequences for non-compliance. Investors should carefully review all requirements before purchasing or converting properties for STR use.