CHAPTER 3.32: TRANSIENT ACCOMMODATIONS TAX
Section
3.32.020 Payment and collection of tax; exemption
3.32.025 Operators exempt from collecting tax
3.32.030 Operator’s certificate of registration
3.32.040 Receipts; segregation
3.32.050 Returns; payments; penalties
3.32.055 Involuntary filing, appeal
3.32.060 Records; confidentiality
3.32.070 Records; maintenance and inspection
3.32.085 Transient accommodations tax liens
3.32.100 Penalties for violations
[Editor’s note: The prior history for this chapter was Ordinance 88-65.]
3.32.010 DEFINITIONS.
(A) For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning:
• “Finance director” means the Matanuska-Susitna Borough Finance Director or the director’s designee.
• “Guest” means a person who rents an overnight accommodation for a term of less than 60 consecutive days. A person who rents an overnight accommodation for a term of 60 consecutive days or more, which room is used by that person’s employees for periods of less than 60 consecutive days each on a rotating basis, is not a guest.
• “Hotel room” or “motel room” means a structure or part of a structure rented, or offered for rent, for a term of less than 60 consecutive days for dwelling, lodging or sleeping purposes, but excludes a structure or part of a structure rented or offered for rent solely in connection with a principal business or institutional purpose other than providing meals, lodging, entertainment or recreation; for example, a hospital or university dormitory.
• “Operator” means a person who offers overnight accommodations for rent and to whom rent for overnight accommodations is payable, either directly or through an agent or employee.
• “Overnight accommodation” or simply “accommodation” as used in this chapter means a hotel room or motel room, other similar structure, wall tent, bed and breakfast, or other form of overnight accommodation commercially provided alone or as part of a recreation, hunting, fishing, hiking, wilderness back country, or other form of tour package. These accommodations include overnight accommodations rented or offered for rent, for a term of less than 60 consecutive days for dwelling, lodging, or sleeping purposes, but excludes a structure or part of a structure rented or offered for rent solely in connection with a principal business or institutional purpose other than providing meals, lodging, entertainment, sightseeing, hunting, fishing, tour package, hiking, wilderness back country or recreation; for example, a hospital or university dormitory.
• “Quarter” means any one of the four consecutive three-month periods in a calendar year, the first of which commences January 1.
• “Rent” means:
(a) to obtain the right to use or occupy an overnight accommodation; and
(b) a monetary consideration paid to rent an overnight accommodation.
(Ord. 08-153(AM), § 2, 2008: Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.020 PAYMENT AND COLLECTION OF TAX; EXEMPTION.
(A) The borough levies a tax on all overnight accommodations rent payable to an operator and not exempt from taxation under subsection (B) of this section in the amount of 5 percent of the overnight accommodations rent. If the guest pays for a recreational tour package that includes overnight accommodations, the portion of the package total that pays for the overnight accommodation will be subject to this tax. The guest shall pay the tax to the operator at the time the rent is paid. The operator shall collect the tax when the operator collects the rent. The operator shall state the tax is a separate item on the guest’s bill.
(B) When qualified for exemption in accordance with subsection (C) of this section, the following rents are exempt from the tax levied by subsection (A) of this section:
(1) rent paid directly by the United States or state of Alaska but only to the extent that they are immune from such taxation;
(2) rent paid by or on behalf of a guest who is an officer or employee of a foreign government who is exempt from taxation by law or treaty; and
(3) rent payable to an operator that is exempt from collecting the tax under this chapter.
(C) Rent qualifies for exemption under paragraph (B)(3) above if the operator collecting the rent has established its exemption from collecting the tax pursuant to MSB 3.32.025.
(Ord. 08-153(AM), §§ 3, 4, 2008; Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.025 OPERATORS EXEMPT FROM COLLECTING TAX.
(A) When qualified for exemption in accordance with this section, an operator exempt from federal income taxation under 26 USC Section 501 (c)(3), whose income from accommodations rents is not unrelated business taxable income under 26 USC Section 512, is exempt from collecting the tax levied under MSB 3.32.020.
(B) An operator qualifies for exemption under subsection (A) of this section by registering as an operator under MSB 3.32.030, and presenting evidence satisfactory to the finance director that the United States Internal Revenue Service has determined that the operator is exempt from federal income taxation under 26 USC Section 501(c)(3) and its income from overnight accommodations rents is not unrelated business taxable income under 26 USC Section 512.
(Ord. 08-153(AM), § 5, 2008; Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.030 OPERATOR’S CERTIFICATE OF REGISTRATION.
(A) No person may engage in business as an operator without obtaining a certificate of registration under this section. An operator shall display its certificate of registration prominently at its registered place of business.
(B) Application for a certificate of registration shall be made to the finance director. If an operator engages in business as an operator at more than one location, the operator shall obtain a certificate of registration for each location. There shall be no charge for issuing a certificate of registration.
(C) A certificate of registration shall bear the name of the operator, the address of the registered place of business, the operator’s form of business organization, and state whether the operator is exempt from collecting the tax under MSB 3.32.025.
(D) If an operator ceases to engage in business as an operator, ceases to engage in business at its registered place of business, changes its name, changes its form of business organization, or ceases to be exempt from collecting the tax under MSB 3.32.025, its certificate of registration expires. An operator shall surrender an expired certificate of registration to the finance director for cancellation.
(Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.040 RECEIPTS; SEGREGATION.
Title to the rental taxes collected pursuant to this chapter shall vest in the borough upon collection. The taxes shall be segregated by the operator from the funds of the operator or the business entity subject to the tax and safeguarded until transmitted to the borough as provided under MSB 3.28.050. A separate account shall be maintained for all taxes collected.
(Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.050 RETURNS; PAYMENTS; PENALTIES.
(A) On or before 30 days after the end of each quarter, each operator not exempt under MSB 3.32.025 shall prepare and submit to the finance department a return for the preceding quarter upon forms furnished by the finance department. In addition, the operator shall submit other information and supporting papers required by regulations issued by the finance director. The operator shall sign the return and transmit it together with the taxes collected to the finance department on or before the due date. A return shall be filed even if none of the reported rents were taxable. The return shall set forth the amount received for:
(1) rents collected for transient overnight accommodations within the borough;
(2) the amount of non-taxable rents collected;
(3) the amount of taxable rents collected;
(4) the taxes collected.
(B) Taxes collected by an operator, as provided by this chapter, shall be due 30 days after the end of each quarter. If taxes collected by an operator have not been received by the finance department on or before the due date, the operator shall be charged interest at the rate of 8 percent per annum for each day the tax is delinquent. In addition to interest, if taxes collected by an operator have not been received by the finance department on or before the due date, the operator shall incur a penalty as follows:
(1) Up to and including one month late, the penalty is 5 percent of the tax due.
(2) Over one month late, the penalty is an additional 3 percent of the tax due.
(3) Failure to file a return at all and when an involuntary filing under MSB 3.32.055 is made, the penalty is an additional 10 percent of the tax due, or $25, whichever is larger.
(C) [Repealed by Ord. 96-073, § 2, 1996 and recodified as MSB 3.32.055(A)]
(D) An operator that has qualified for exemption under MSB 3.32.025 shall report to the finance director in writing any final determination by the United States Internal Revenue Service affecting the operator’s exemption qualification within 30 days of receiving notice of the determination from the Internal Revenue Service.
(Ord. 18-077, § 2, 2018; Ord. 13-166, § 2, 2013; Ord. 08-153(AM), § 6, 2008; Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.055 INVOLUNTARY FILING, APPEAL.
(A) Involuntary return. When an operator fails to file a return under MSB 3.32.050, or when the finance director finds that a return filed by an operator is not supported by the records maintained pursuant to MSB 3.32.070, the finance director may prepare and file a return on behalf of the operator. Taxes estimated on a return filed on behalf of an operator under this subsection may be premised upon any information that is available to the finance director including, among other things, comparative data for similar businesses. An operator for whom an involuntary return is filed under this subsection shall be liable for the taxes stated on the return, as well as the penalties, including a minimum penalty of $25 for failure to file, and interest provided in subsection (B) of this section and pursuant to MSB 3.32.050 and 3.32.100.
(B) Assessment notice. The finance director shall provide each operator by certified mail, return receipt requested, or personal service, a notice of assessment which includes the total amount of tax, penalties, and interest due. The notice shall inform the operator that the operator has ten calendar days from the date of the notice to contest the amount of the assessment and request a hearing in writing. The hearing request shall be made on a form provided by the finance department.
(C) Hearing. If the hearing provided for by MSB 3.32.055(B) is requested by the operator, the finance director shall notify the operator at least 15 calendar days in advance, by certified mail, return receipt requested, of the date, time and place of the hearing. The operator shall make available for inspection and copying at the hearing all the operator’s books and records, which the operator relies on in contesting the assessment and the same shall become part of the record. The finance director shall disclose to the operator all the documents or other evidence which the director relied upon in making the tax assessment and the same shall become part of the record. Hearings for more than one accommodation or filing period may be consolidated for the same operation.
(D) Determination. Within ten calendar days of the hearing the finance director shall issue a written decision with findings of fact, setting forth the total amount of tax liability, penalty, and interest. The notice of finance director’s final decision shall also advise the operator of the operator’s right to appeal the decision to the superior court within 30 calendar days.
(E) Appeal. An appeal may be filed pursuant to Part 6 of the Alaska Rules of Appellate Procedure. If the amount of the tax, interest, and penalty is upheld by the court on appeal, the court shall issue a judgment for the amount, plus costs and attorney fees.
(F) Collection. If the operator does not pay the tax in full or appeal the assessment, the borough may proceed with a personal action as provided by MSB 3.32.080 and lien as provided by MSB 3.32.085.
(Ord. 18-077, § 3, 2018; Ord. 13-166, § 3, 2013; Ord. 96-073, § 3, 1996)
3.32.060 RECORDS; CONFIDENTIALITY.
(A) All returns filed with the borough pursuant to this chapter and all financial data obtained from the returns are confidential and may not be released for inspection by any person except the manager, finance director, borough attorney, internal or external auditor or the assembly; provided, however, that the data may be released upon court order.
(B) Except as provided in this section, no person may divulge to another any information obtained from a return filed with the borough or from data obtained from a return unless the person receiving the information is a person authorized to review the return under the terms of this chapter.
(C) It is the duty of the finance director to safely keep returns and all financial data taken from the returns secure from public and private inspection, except as provided by this chapter.
(D) This section does not prohibit the borough from compiling and publishing statistical evidence concerning the data submitted, provided no identification of particular returns or reports is made, nor does it prohibit the borough from releasing the business names, owners, mailing address and filing status to the public. “Filing status” means: whether the taxpayer is exempt, non-exempt, delinquent, or current in payment of the tax. Nothing in this section shall be deemed to prohibit an internal auditor from examining returns, provided that no information obtained from specific or identifiable returns shall be made available to persons other than those authorized to review returns under subsection (A) of this section.
(Ord. 94-001AM, § 4 (part), 1994; Ord. 93-121, § 2, 1993; Ord. 89-21, § 2 (part), 1989)
3.32.070 RECORDS; MAINTENANCE AND INSPECTION.
(A) An operator not exempt under MSB 3.32.025 shall maintain the following records for the two previous calendar years:
(1) all guest registers and accounting records reflecting the renting of overnight accommodations for which the operator received rents, and the receipt of rents for the overnight accommodations; and
(2) evidence which supports the operator’s decision to not collect the tax required by MSB 3.32.
(B) During normal business hours, the finance director may, upon presentation of proper identification, inspect the records which an operator is required to maintain under subsection (A) of this section, or inspect the records of a person whom the finance director has probable cause to believe is an operator not exempt under MSB 3.32.025 to determine whether that person is an operator not exempt under MSB 3.32.025.
(C) Where the constitution of the United States or of the state of Alaska requires, the finance director shall obtain an administrative search warrant authorizing an inspection and exhibit the warrant to the person in charge of the premises before conducting the inspection. The finance director shall apply to the trial courts of the state to obtain an inspection warrant, stating in the application the name and address of the premises to be inspected, the authority to conduct the inspection, the nature and extent of the inspection, and the facts and circumstances justifying the inspection. Warrants issued under this section shall be returned within ten days.
(Ord. 08-153(AM), § 7, 2008; Ord. 94-001AM, § 4 (part), 1994)
3.32.080 SUITS FOR COLLECTION.
(A) Taxes due but not paid, or taxes collected but not transmitted, may be recovered in an action at law against the transient guest or the overnight accommodations operator. Tax returns shall be prima facie proof of taxes collected but not transmitted.
(Ord. 08-153(AM), § 8, 2008: Ord. 89-21, § 2 (part), 1989)
3.32.085 TRANSIENT ACCOMMODATIONS TAX LIENS.
(A) The finance director may cause the recording of a notice of lien on real and personal property to secure the payment of a transient accommodations tax, and the interest, penalties, and administration costs in the event of delinquency, where the operator has:
(1) failed within 60 calendar days of the end of the filing period from which taxes were due to remit all amounts due; or
(2) failed to file tax returns for two consecutive filing periods as required by the chapter and has failed to request a hearing or has requested a hearing, after which a final order has been issued setting forth the amount of tax, penalty, and interest owing. If the finance director determines taxes, interest, and penalties are due after a hearing, the lien may be filed even though the operator takes further appeal, unless the operator obtains a judicial stay.
(B) Prior to filing a lien, the finance director shall cause an additional written notice of intent to file to be mailed to the last known address of the delinquent operator.
(C) When recorded, the transient accommodations tax lien has priority over all other liens, except:
(1) liens for property taxes and special assessments;
(2) liens that were perfected before the recording of the transient accommodations tax lien for amounts actually advanced before the recording of the transient accommodations tax lien;
(3) mechanics’ and materialmen’s liens for which claims of lien under A.S. 34.35.070 or notices of right to lien under A.S. 34.35.064 have been recorded before the recording of the transient accommodations tax lien.
(Ord. 96-073, § 4, 1996)
3.32.090 PROHIBITED ACTS.
(A) A person may not fail or refuse to pay the tax imposed by this chapter when it is due and payable to an operator authorized to collect the tax.
(B) An operator may not advertise or state to the public or to any guest, or render directly or indirectly that the tax, or any part of it, shall be assumed or absorbed by the operator, or that the tax shall not be added to the rental or that it shall be refunded. An operator may not absorb or fail to add the tax or any part of it, or refund any tax or fail to state the tax separately to the guest.
(Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.100 PENALTIES FOR VIOLATIONS.
An operator who fails to file a tax return as required by this chapter shall incur penalties and interest as provided in MSB 3.32.050(B). An operator who willfully fails to collect the tax levied by this chapter shall incur a civil penalty of double the tax which should have been collected. A person who violates any of the provisions of this chapter is guilty of an infraction and is also subject to the enforcement and penalties provided by MSB 1.45 and AS 29.25.070. All penalties shall be considered cumulative remedies and shall not relieve an operator or guest of the duties imposed under this chapter.
(Ord. 13-166, § 4, 2013: Ord. 94-001AM, § 4 (part), 1994; Ord. 89-21, § 2 (part), 1989)
3.32.110 REGULATIONS.
The finance director may adopt regulations providing for the application and interpretation of this chapter and providing methods and forms for reporting and collecting the taxes imposed by this chapter.
(Ord. 89-21, § 2 (part), 1989)
3.32.120 REFUNDS.
(A) The finance department shall refund to an operator the amount of taxation paid to the finance department for overnight accommodations rentals not subject to taxation under MSB 3.32.020.
(B) The operator shall apply for a tax refund in writing on a form provided by the finance department not later than two years from the date the tax is transmitted to the finance department.
(Ord. 08-153(AM), § 9, 2008; Ord. 89-21, § 2 (part), 1989)