Chapter 3.12
TRANSIENT OCCUPANCY TAX
Sections:
3.12.050 Reporting and remitting.
3.12.060 Penalties and interest.
3.12.070 Failure to collect and report tax – Determination of tax by Tax Administrator.
3.12.300 Obligation of purchaser of covered business.
3.12.310 Issuance of receipt or certificate.
3.12.320 Estimate of amount to withhold.
3.12.330 Deposit of amount withheld.
3.12.340 Successor’s failure to withhold.
3.12.350 Effect of certificate on liability of seller.
3.12.400 Joint and several liability of partners.
3.12.010 Definitions.
Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter.
(A) “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.
(B) “Hotel” means 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; and shall further include any space, lot, area, or site in any trailer court, camp, park, or lot where a trailer, recreational vehicle, mobile home, motor home, or other similar conveyance is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes.
(C) “Occupancy” means the use or possession, or the right to the use or possession, of any room or rooms, or portion thereof, in any hotel for dwelling, lodging or sleeping purposes.
(D) “Transient” means any person who exercises occupancy or is entitled to occupy 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. Any such person so occupying space in a hotel shall be deemed to be a 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 in this chapter may be considered.
(E) “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.
(F) “Operator” means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgage 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.
(G) “Tax Administrator” means the City Clerk. (Ord. CCO-11-05 § 6, 2011; Ord. 440, 1988)
3.12.020 Tax imposed.
For the privilege of occupancy in any hotel, each transient shall be subject to and shall pay a tax in the amount of 12 percent of the rent charged by the operator. Such tax shall constitute a debt owed by the transient to the City, which debt shall be 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 Tax Administrator may require that such tax be paid directly to the Tax Administrator. (Ord. CCO-23-08 § 1, 2023; Ord. CCO-95-08, 1995; Ord. CCO-93-05, 1993; Ord. 440, 1988)
3.12.030 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. 440, 1988)
3.12.040 Registration.
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 said hotel with the Tax Administrator 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 the 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 Uniform Transient Occupancy Tax Ordinance by registering with the Tax Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to 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. 440, 1988)
3.12.050 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 Tax Administrator, make a return to the Tax Administrator on forms provided by him/her 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 Tax Administrator. The Tax Administrator may establish shorter reporting periods for any certificate holder if he/she deems it necessary in order to ensure collection of the tax and he/she 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 Tax Administrator. An extension of time, not to exceed 30 days, to file a return and to pay the tax, shall be granted by the Tax Administrator upon receipt of a written application showing good cause. (Ord. CCO-11-05 § 7, 2011; Ord. CCO-96-07 § 25, 1996; Ord. 440, 1988)
3.12.060 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 10 percent 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 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10 percent of the amount of the tax in addition to the amount of the tax and the 10 percent penalty first imposed.
(C) Fraud. If the Tax Administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25 percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (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 one-half of one percent per month or fraction thereof on the amount of the tax, exclusive of 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. 440, 1988)
3.12.070 Failure to collect and report tax – Determination of tax by Tax Administrator.
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 Tax Administrator shall proceed in such manner as he/she may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the Tax Administrator 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/she 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 Tax Administrator 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 10 days after the serving or mailing of such notice, make application in writing to the Tax Administrator 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 Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five 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. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in MSMC 3.12.080. (Ord. 440, 1988)
3.12.080 Appeal.
Any operator aggrieved by any decision of the Tax Administrator 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 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/her 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 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. 440, 1988)
3.12.090 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 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 Tax Administrator shall have the right to inspect at all reasonable times. (Ord. 440, 1988)
3.12.100 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 subsections (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 Tax Administrator within three 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 right thereto by written records showing entitlement thereto. (Ord. 440, 1988)
3.12.110 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 Mt. Shasta for the recovery of such amount. (Ord. 440, 1988)
3.12.120 Violations.
(A) Violation of this chapter shall constitute an infraction, and shall follow code enforcement procedures and penalties set forth in Chapter 1.03 MSMC.
(B) Nothing herein shall prevent a person who violates this chapter from, in the alternative, being charged with and convicted of a misdemeanor or felony under any other applicable provision of the California Penal Code or other local, County, State, or Federal law or regulation.
(C) Any operator or other person who fails or refuses to register as required herein, or to furnish any return required to be made, or furnish a supplemental return or other data required by the Tax Administrator, or who renders a false or fraudulent return or claim, shall be deemed to have violated this chapter.
(D) Any person required to make, render, sign or verify any report or claim who makes any 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 shall be deemed to have violated this chapter. (Ord. CCO-20-04 § 3, 2020; Ord. CCO-95-04, 1995; Ord. 440, 1988)
3.12.300 Obligation of purchaser of covered business.
If an operator who is liable for any tax, penalties, or interest under this chapter sells his or her business, his or her successor shall withhold, or cause the escrow holder to withhold, a sufficient portion of the purchase price to equal the amount of such tax, penalties, and interest until the selling operator produces a receipt from the City Clerk or Finance Officer showing that the said tax, penalty, and interest has been paid through the date of the transfer of the subject business, or a Tax Clearance Certificate from said officer stating that no tax, penalties, or interest are due as of the said transfer date. (Ord. CCO-95-06, 1995)
3.12.310 Issuance of receipt or certificate.
Within 10 days after receiving a written request from the successor for a Tax Clearance Certificate stating that no tax, penalties, or interest is due, the City Finance Officer shall either mail to the successor the requested Certificate or issue a withholding estimate pursuant to MSMC 3.12.320. (Ord. CCO-95-06, 1995)
3.12.320 Estimate of amount to withhold.
The City Finance Officer shall, within 10 days after receipt of a written request therefor, mail to the successor a statement of the amount which the City will consider to be sufficient to be withheld under MSMC 3.12.300, and if the successor withholds, or causes the escrow holder to withhold, that amount or more, the successor shall not be liable if the amount proves to be insufficient. The minimum amount to be withheld shall be determined by the City by multiplying by 1.5 the estimated amount of T.O.T. which is likely to have accrued, based on the taxpayer’s previous tax returns, since the tax was last paid, plus known interest and penalties; provided, however, that the City may require a larger amount to be withheld if the City Finance Officer deems it to be appropriate under the circumstances, based on intervening changes in the operator’s business, veracity and completeness of previous tax returns, or other relevant factors. If the successor fails to obtain such an estimate from the City, and withholds, or causes to be withheld, an insufficient amount, the successor shall be liable for the difference between the amount withheld and the amount actually due from the operator. In no event shall the escrow holder be liable for the subject taxes, penalties, or interest. (Ord. CCO-95-06, 1995)
3.12.330 Deposit of amount withheld.
If the seller does not present his or her successor with a receipt or Tax Clearance Certificate within 30 days after such successor commences to conduct business, the successor shall deposit, or cause the escrow holder to deposit, the withheld amount with the City pending settlement of the amount of the taxes, penalties, and interest due of the seller. (Ord. CCO-95-06, 1995)
3.12.340 Successor’s failure to withhold.
If the successor fails to withhold, or cause the escrow holder to withhold, a portion of the purchase price as required, it shall be liable to the City for the payment of the amount of the minimum amount to be withheld, according to the formula set forth in MSMC 3.12.320; provided, however, that if the actual taxes, penalties, and interest due from the operator, as based on complete and confirmed tax returns, are determined by the City Finance Officer to be less than the amount required to have been withheld, the successor shall be liable for that lesser amount. (Ord. CCO-95-06, 1995)
3.12.350 Effect of certificate on liability of seller.
The issuance by the City of a Tax Clearance Certificate shall not release the owners or operators of a business which has incurred unpaid transient occupancy tax liability. (Ord. CCO-95-06, 1995)
3.12.400 Joint and several liability of partners.
The tax due under this chapter shall be a joint and several liability of all general partners of any partnership which is liable for the said tax, even if that general partner is not individually involved in the operation of the subject business. (Ord. CCO-95-06, 1995)