The Transient Guest Tax is a tax imposed on guests of the city’s hotels or other lodging facilities. This tax is also commonly referred to as a "bed tax," "hotel occupancy tax," or "motel tax." The tax is determined by the City Council and is currently set at 6%. The City anticipates collecting $850,000 in 2012 which is allocated to the Economic Development Fund. The revenue from the tax goes to the Olathe Chamber of Commerce for economic development and Convention and Visitors Bureau services.

Transient hotel taxes are commonly used by municipalities. The "tax burden," or responsibility of paying for the tax, is more likely paid by visitors from out-of-town. There are other cities in Johnson County which also use transient guest taxes.