Chapter 3.12 TRANSIENT OCCUPANCY TAX

HOTEL. Any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging, or sleeping purposes. The term includes any hotel, inn, tourist home or house, bed and breakfast facility, motel, studio hotel, bachelor hotel, lodging house, room house, apartment house, dormitory, public or private vacation resort club, or motor home or travel trailer at a fixed location, or other similar structure or portion thereof. The term HOTEL does not include an organized camp, as that term is defined in Cal. Health and Safety Code § 18897.

OCCUPANCY. The use or possession, or the right to use or possession of any room or rooms or portion thereof, in any hotel for dwelling, lodging, or sleeping purposes.

OPERATOR. The person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other capacity. Where the operator performs his or her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his or her principal; or the managing agent shall, however, be considered to be the compliance by both.

RENT. The consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits, property and services of any kind or nature, without any deduction therefrom whatsoever.

TAX ADMINISTRATOR. The Director of Finance of the City of Fort Bragg.

TRANSIENT.

1. Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days.

2. Any such person so occupying space in a hotel shall be deemed to be TRANSIENT until the period of 30 days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. In determining whether a person is a TRANSIENT uninterrupted periods of time extending both prior and subsequent to the effective date of the ordinance codified herein may be considered.

(Ord. 354, § 2, passed -- 1965; Am. Ord. 356, § 1, passed -- 1965; Am. Ord. 856, § 1, passed -- 2006; Am. Ord. 870, § 3, passed 8-25-2008)

3.12.030 AMOUNT OF TAX.

A. Pursuant to the authority of Cal. Revenue and Taxation Code § 7280, there is levied an occupancy tax on the privilege of occupying a room or rooms in any hotel as defined by § 3.12.020 unless the occupancy is for a period of more than 30 days. Effective April 1, 2017, the amount of the tax shall be 12% of the room rent charged by the hotel operator. It is the responsibility of the hotel operator to collect the occupancy tax in full at the time of renting a room or rooms to a transient. It is the further responsibility of the hotel operator to remit the 12% occupancy tax to the City within the time limits set forth in this chapter.

B. For purposes of this chapter, the phrase “the privilege of occupying a room or rooms in any hotel” shall be applied and interpreted as described in Cal. Revenue and Taxation Code § 7280(b), as amended from time to time.

C. In the event that a transient occupies a room or rooms beyond the period originally contracted for with the hotel operator, it is the responsibility of the hotel operator to collect any unpaid occupancy tax upon the transient’s ceasing to occupy space in the hotel. In the event that the hotel operator fails to collect the tax from the transient, the hotel operator shall be responsible for payment in full of the occupancy tax to the City.

D. The Director Finance, at the direction and request of the City Manager, shall keep account of how the proceeds of the 2% of the tax added by Ordinance No. 924-2016 are being used, and shall annually render an itemized written report to the City Council detailing such expenditures.

(Ord. 354, § 3, passed -- 1965; Am. Ord. 379, § 1, passed -- 1969; Am. Ord. 468, § 1, passed -- 1975; Am. Ord. 598, § 1, passed -- 1983; Am. Ord. 729, § 1, passed -- 1991; Am. Ord. 856, §§ 2, 3, passed -- 2006; Am. Ord. 924, § 1, passed 6-27-2016)

3.12.040 EXEMPTIONS.

A. No tax under this chapter shall be imposed upon:

1. Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax provided in this chapter; and/or

2. Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.

B. No exemption shall be granted except upon a claim therefor made at the time the rent is collected and under penalty of perjury upon a form prescribed by the Tax Administrator that complies with the requirements of Cal. Revenue and Taxation Code § 7280(e).

(Ord. 354, § 4, passed -- 1965; Am. Ord. 856, § 4, passed -- 2006)

3.12.050 OPERATOR’S DUTIES.

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided.

(Ord. 354, § 5, passed -- 1965)

3.12.060 REGISTRATION.

A. Within 30 days after the effective date of the ordinance codified in this chapter, or within 30 days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register the hotel with the Tax Administrator and obtain from him or her a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises.

B. The certificate shall, among other things, state the following:

1. The name of the operator;

2. The address of the hotel;

3. The date upon which the certificate was issued; and

4. “This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a hotel without strictly complying with all local applicable laws, including but not limited to those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit.”

(Ord. 354, § 6, passed -- 1965)

3.12.070 REPORTING - REMITTING.

Each operator shall, on or before the last day of each month, on forms provided by the Tax Administrator, report the total rents charged and received and the amount of tax collected during the prior month for transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the Tax Administrator. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment thereof is made to the Tax Administrator.

(Ord. 884, § 2, passed 11-23-2009)

3.12.075 AUDIT.

A. The Tax Administrator may perform an audit, or cause an audit to be performed, of the financial records for any hotel operating within the City limits, to determine the actual total rents charged and received for transient occupancy, and the amount of tax collected for transient occupancies.

B. Prior to conducting an audit or causing an audit to be performed, the Tax Administrator shall give written notice to the operator, advising the operator of the period for which the records will be audited, the time and location of the audit, the person(s) who will be performing the audit and the type(s) of records that will need to be produced by the operator to allow the audit to be conducted.

C. The notice shall be sent via first class mail, postage pre-paid, to the operator at the location of the hotel being audited not less than 30 days prior to the date of the audit.

D. Upon receipt of a written notice of intent to conduct an audit, the operator shall prepare and make available all requested financial records, subject to any applicable laws and regulations regarding disclosure of financial records and any privacy issues.

E. Upon completion of an audit, the Tax Administrator shall make the results of the audit available to the operator at the request of the operator.

(Ord. 856, § 5, passed -- 2006)

3.12.080 PENALTIES - ORIGINAL DELINQUENCY.

Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax.

(Ord. 354, § 8(A), passed -- 1965; Am. Ord. 906, § 4, passed 04-22-2013)

3.12.090 CONTINUED DELINQUENCY.

Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

(Ord. 354, § 8(B), passed -- 1965)

3.12.100 FRAUD.

If the Tax Administrator determines that nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in §§ 3.12.080 and 3.12.090.

(Ord. 354, § 8(C)), passed -- 1965)

3.12.110 INTEREST.

In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of 0.5% per month or fraction thereof on the amount of the tax, from the date on which the remittance first became delinquent until paid.

(Ord. 354, § 8(D), passed -- 1965; Am. Ord. 906, § 5, passed 04-22-2013)

3.12.120 PENALTIES MERGED WITH TAX.

Every penalty imposed and such interest as accrues under the provisions of §§ 3.12.080 through 3.12.110 shall become a part of the tax required to be paid in this chapter.

(Ord. 354, § 8(E), passed -- 1965)

3.12.130 FAILURE TO COLLECT AND REPORT TAX.

If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter, any report and remittance of the tax or any portion thereof required by this chapter, the Tax Administrator shall proceed in such manner as he or she deems best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the Tax Administrator procures the facts and information as he or she is able to obtain upon which to base the assessment of the tax imposed by this chapter, payable by any operator who has failed or refused to collect the same and to make the report and remittance, he or she shall proceed to determine and assess against the operator the tax, interest and penalties provided for by this chapter. In case the determination is made, the Tax Administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail by postage prepaid, addressed to the operator so assessed at his or her last known place of address. The operator may within ten (10) days after the serving or mailing of the notice make application in writing to the Tax Administrator for a hearing of the amount assessed. If application by the operator for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the Tax Administrator shall become final and conclusive and be immediately due and payable. If the application is made, the Tax Administrator shall give not less than five (5) days’ written notice in the manner prescribed in this chapter to the operator to show cause at a time and place fixed in the notice why the amount specified therein should not be fixed for the tax, interest, and penalties. At the hearing, the operator may appear and offer evidence why the specified tax, interest, and penalties should not be so fixed. After the hearing, the Tax Administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed in this chapter of the determination and the amount of the tax, interest, and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in § 3.12.140.

(Ord. 354, § 9, passed -- 1965)

3.12.140 APPEAL.

Any operator aggrieved by any decision of the Tax Administrator with respect to the amount of the tax, interest, and penalties, if any, may appeal the decision in accordance with the procedures described in Chapter 1.08.

(Ord. 900, § 3, passed 12-12-2011)

3.12.150 RECORDS.

It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of three (3) years, all records as may be necessary to determine the amount of the tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator shall have the right to inspect at all reasonable times.

(Ord. 354, § 11, passed -- 1965)

3.12.160 REFUNDS.

A. Whenever the amount of any tax, interest, or penalty has been overpaid, paid more than once or has been erroneously or illegally collected or received by the City under this chapter, it may be refunded by the City under this chapter as provided in subsections (B) and (C) of this section provided a claim in writing therefore, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Tax Administrator within three (3) years of the date of payment. The claim shall be on forms furnished by the Tax Administrator.

B. An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the Tax Administrator that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the transient or credited to rent subsequently payable by the transient to the operator.

C. A transient may obtain a refund of taxes overpaid or paid more than once or erroneously or illegally collected or received by the City by filing a claim in the manner provided in subsection (A) of this section, but only when the tax was paid by the transient directly to the Tax Administrator or when the transient having paid the tax to the operator establishes to the satisfaction of the Tax Administrator that the transient has been unable to obtain a refund from the operator who collected the tax.

D. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records showing entitlement thereto.

(Ord. 354, § 12, passed -- 1965)

3.12.170 ACTIONS TO COLLECT.

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the transient to the City. Any such tax collected by an operator which has not been paid to the City by the operator shall be deemed a debt owed to the City by the operator. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of the amount.

(Ord. 354, § 13, passed -- 1965)

3.12.180 VIOLATION DEEMED MISDEMEANOR.

A. Any person violating any of the provisions of this Chapter shall be guilty of a misdemeanor, and upon conviction thereof shall be punishable as provided in Chapter 1.12. In the event any civil suit or action is brought by the City to enforce the provisions of this Chapter, including without limitation, the reporting and remittance obligations of an operator, the operator or other person responsible for such violation shall be liable to the City for the City’s costs of the suit, including, but not limited to the City’s attorneys’ fees, expert fees, auditor’s fees and other costs of the suit.

B. Any operator or other person who fails or refuses to register as required in this chapter, to furnish any return required to be made, to furnish a supplemental return or other data required by the tax administrator or who renders a false or fraudulent report or claim, is guilty of a misdemeanor, and is punishable as provided in Chapter 1.12. Any person required to make, render, sign or verify any report or claim who makes false or fraudulent report or claim with intent to defeat or evade the determination of any amount due required by this chapter to be made, is guilty of a misdemeanor and is punishable as provided in Chapter 1.12.

(Ord. 874, § 4, passed 8-25-2008; Am. Ord. 892, § 2, passed 01-24-2011)

3.12.190 STATUTE OF LIMITATIONS.

Notwithstanding any other provision of law, except in the case of fraud or the failure of a property owner to file a transient occupancy tax return, the City may institute an action to collect unpaid transient occupancy taxes within four (4) years of the date on which the transient occupancy taxes were required to be paid.

(Ord. 856, § 6, passed -- 2006)

3.12.200 TAX CLEARANCE CERTIFICATES.

A. 1. A purchaser, transferee, or other person or entity attempting to obtain ownership of a property, the owner of which is required to collect the tax imposed pursuant to this chapter, may request the City in which that property is located to issue a tax clearance certificate.

2. The City under this section may charge an administrative fee to cover its costs in issuing the tax clearance certificate.

B. Within 90 days of receiving a request described in subsection (A), the City shall do either of the following:

1. Issue the tax clearance certificate; and

2. a. Request the current owner of the property to make available that owner’s transient occupancy tax records for the purpose of conducting an audit regarding transient occupancy taxes that may be due and owing from the owner of the property.

b. i. Complete the audit described in this subsection on or before 90 days after the date that the current or former owner’s records are made available to the auditing jurisdiction and issue a tax clearance certificate within 30 days of completing the audit.

ii. If, after completing the audit, the City makes a determination that the current owner’s records are insufficient to make a determination of whether transient occupancy taxes may be due and owing, the City is not required to issue a tax clearance certificate as otherwise required by this subdivision. The City shall within 30 days of making that determination, notify the purchaser, transferee, or other person or entity that made the request that it will not issue a tax clearance certificate due to the insufficiency of the prior owner’s records.

C. If the City does not comply with subsection (B), the purchaser, transferee, or other person or entity that obtains ownership of the property shall not be liable for any transient occupancy tax obligations incurred prior to the purchase or transfer of the property.

D. For a tax clearance certificate issued under this section, all of the following apply.

1. The certificate shall state the amount of tax due and owing for the subject property, if any.

2. The certificate shall state the period of time for which it is valid.

3. The purchaser, transferee, or other person or entity who obtains ownership of the property may rely upon the tax clearance certificate as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.

E. Any purchaser, transferee, or other person or entity described in subsection (A) who does not obtain a tax clearance certificate that indicates that tax is due and fails to withhold, for the benefit of the City, sufficient funds in the escrow account for the purchase of the property to satisfy the transient occupancy tax liability, shall be held liable for the amount of tax due and owing on the property.

F. This section may not be construed to relieve a property owner of transient occupancy tax obligations incurred when that owner owned the property.

(Ord. 856, § 7, passed -- 2006)

3.12.210 INFORMATION CONFIDENTIAL.

For tax returns file with the City pursuant to this Chapter, all information contained therein regarding amounts of gross receipts, adjustments, credits, over collections, penalties, and interest shall be and remain confidential. Provided, however, that this Section shall not apply to any disclosures made in conjunction with any action or proceedings of any kind relating to determination or collection of tax owed or any prosecution for violation of this chapter or any related civil or criminal action. Nor shall this Section apply where disclosure is required by a court order or other legal process involving the enforcement of state or federal law. This section shall not prohibit the disclosure of statistical or cumulative information when the information provided does not disclose or identify the individual taxpayer.

(Ord. 906, § 6, passed 04-22-2013)