A 3-percent tax on hotel-motel lodging took effect earlier this week, after Tiffin City Council passed the ordinance in July.
Gwynn Reinhart, director of finance, said the ordinance was based on figures from a similar tax Seneca County has on hotels and motels.
Based on figures from 2011, the tax could give the city $37,850 annually.
Reinhart said the matter of whether the tax would deter people from lodging at hotels and motels in the city was discussed among the council members. She said the members of the council concluded most people visiting from other cities do not pay attention to the taxes that go into their hotel stays.
According to the approved ordinance, a hotel is an establishment that has five or more rooms that guests can stay in.
The two businesses affected by this ordinance are the Holiday Inn Express and Tiffin Motel, located behind Denny's.
The tax is to affect "transient guests" which, according to the ordinance, are persons staying at a hotel or motel for less than 30 days.