Chapter 25A
TRANSIENT OCCUPANCY TAX1
Sections:
25A.4-1 Successor of operator’s duties.
25A.6 Reporting and remitting.
25A.8 Failure to collect and report tax; determination of tax by director of finance.
25A.13 Violations; misdemeanor.
25A.1 Definitions.
Except where the context otherwise requires, the definitions given in this section govern the construction of this article.
“Hotel” means any recreational vehicle park, or 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, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.
“Occupancy” means the use or possession, or the right to the use or possession of any room or rooms or portions thereof, in any hotel for dwelling, lodging or sleeping purposes.
“Operator” means 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 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 principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.
“Person” means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.
“Rent” means 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 and property and services of any kind or nature, without any deduction therefrom whatsoever.
“Tax administrator” means the director of finance to be charged with administration of the tax.
“Transient” means any person who exercises occupancy or entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty (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 this chapter may be considered. (Ord. No. 928, § 1, 7-19-71; Ord. No. 97-9, § I, 10-20-97)
25A.2 Tax imposed.
For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of nine (9) per cent of the rent charged by the operator. Said tax constitutes a debt owed by the transient to the city which is extinguished only by payment to the operator or to the city. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient’s ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the director of finance may require such tax to be paid directly to the director of finance. (Ord. No. 928, § 1, 7-19-71; Ord. No. 83-14, § 1, 8-1-83)
25A.3 Exemptions.
No tax shall be imposed upon:
(a) Any person as to whom, or any occupancy as to which, it is beyond the power of the city to impose the tax herein provided;
(b) Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
No exemption shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the director of finance. (Ord. No. 928, § 1, 7-19-71)
25A.4 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, or 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. No. 928, § 1, 7-19-71; Ord. No. 97-9, § I, 10-20-97)
25A.4-1 Successor of operator’s duties.
If an operator who is liable for any taxes or penalties under this chapter sells his hotel, his successor shall withhold a sufficient portion of the purchase price to equal the amount of such tax or penalty, for payment to the city, until the selling operator produces a receipt from the city showing that the tax or penalty has been paid or a tax clearance certificate from the city stating that no tax or penalty is due. If the selling operator does not present a receipt or tax clearance certificate within thirty (30) days after such successor commences to conduct business, the successor shall deposit the withheld amount with the city as payment, pending any settlement of the account of the selling operator.
If the successor to the operator fails to withhold a portion of the purchase price as required, it shall be liable to the city for the payment of the amount required to be withheld and any penalty. Within thirty (30) days after receiving a written request from the successor for a tax clearance certificate stating that no tax or penalty is due, the city shall either issue the certificate or mail notice to the successor at its address as it appears on the records of the city of the estimated amount of tax and penalty that must be paid as a condition of issuing the certificate. (Ord. No. 97-9, § II, 10-20-97)
25A.5 Registration.
Within thirty (30) days after the operative date of this chapter or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the director of finance and obtain from him a “Transient Occupancy Registration Certificate” to be at all times posted in a conspicuous place on the premises. Said certificate shall, among other things, state the following:
(a) The name of the operator;
(b) The address of hotel;
(c) The date upon which the certificate was issued;
(d)
This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the transient occupancy tax ordinance by registering with the director of finance for the purpose of collecting from transients the transient occupancy tax and remitting said tax to the director of finance. 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. No. 928, § 1, 7-19-71)
25A.6 Reporting and remitting.
Each operator shall, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the director of finance, make a return to the director of finance on forms provided by him, of the total rents charged and received and the amount of tax collected for transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the director of finance. The director of finance may establish shorter reporting periods for any certificate holder if he deems it necessary in order to insure collection of the tax and he may require further information in the return. 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 director of finance. (Ord. No. 928, § 1, 7-19-71)
25A.7 Penalties and interest.
(a) Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten per cent (10%) of the amount of the tax in addition to the amount of the tax.
(b) Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten per cent (10%) of the amount of the tax in addition to the amount of the tax and the ten per cent (10%) penalty first imposed.
(c) Fraud. If the director of finance determines that the non-payment of any remittance due under this chapter is due to fraud, a penalty of twenty-five per cent (25%) of the amount of the tax shall be added thereto in addition to the penalties stated in subparagraphs (a) and (b) of this section.
(d) 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 eighteen (18) percent per annum. The interest shall be calculated per month or fraction thereof on the amount of the tax and penalties, from the date on which the remittance first became delinquent until paid.
(e) Penalties Merged with Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be paid. (Ord. No. 928, § 1, 7-19-71; Ord. No. 2004-06, § III, 5-3-04)
25A.8 Failure to collect and report tax; determination of tax by director of finance.
If any operator shall fail or refuse to collect said tax and to make, within the time provided in this chapter, any report and remittance of said tax or any portion thereof required by this chapter, the director of finance shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the director of finance shall procure such facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the director of finance shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator so assessed at his last known place of address. Such operator may within ten (10) days after the serving or mailing of such notice make application in writing to the director of finance for a hearing on 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 director of finance shall become final and conclusive and immediately due and payable. If such application is made, the director of finance shall give not less than five (5) days’ written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such tax, interest and penalties. At such hearing, the operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing the director of finance shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen (15) days unless an appeal is taken as provided in section 25A.9. (Ord. No. 928, § 1, 7-19-71)
25A.9 Appeal.
Any operator aggrieved by any decision of the director of finance with respect to the amount of such tax, interest and penalties, if any, may appeal to the council by filing a notice of appeal with the city clerk within fifteen (15) days of the serving or mailing of the determination of tax due. The council shall fix a time and place for hearing such appeal, and the city clerk shall give notice in writing to such operator at his last known place of address. The findings of the council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice. (Ord. No. 928, § 1, 7-19-71)
25A.10 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 such tax as he may have been liable for the collection of and payment to the city, which records the director of finance shall have the right to inspect at all reasonable times. (Ord. No. 928, § 1, 7-19-71)
25A.11 Refunds.
(a) Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subparagraphs (b) and (c) of this section provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the director of finance within three (3) years of the date of payment. The claim shall be on forms furnished by the director of finance.
(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 director of finance 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 subparagraph (a) of this section, but only when the tax was paid by the transient directly to the director of finance, or when the transient having paid the tax to the operator, establishes to the satisfaction of the director of finance 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 right thereto by written records showing entitlement thereto. (Ord. No. 928, § 1, 7-19-71)
25A.12 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 shall be deemed a debt owed by the operator to the city. 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 of Gilroy for the recovery of such amount. (Ord. No. 928, § 1, 7-19-71)
25A.13 Violations; misdemeanor.
Any person violating any of the provisions of this chapter shall be guilty of an infraction. (Ord. No. 928, § 1, 7-19-71; Ord. No. 77-15, § 22, 4-18-77)
Cross references—License fees generally, § 13.40; transfer of city tax functions to county, § 22.1 et seq.; sales and use taxes, § 22.5 et seq.; cigarette tax, § 22.21 et seq.; utility users tax, Ch. 26B.
State law references—Taxation generally, Rev. & Tax C., § 1 et seq.; transfer of city tax functions to county, Gov. C., § 51500 et seq.