Chapter 3.28 TRANSIENT OCCUPANCY (HOTEL) TAX*

“Hotel” means any facility or structure, or any portion of any facility or structure, which is occupied or intended or designed for use or occupancy by transients for purposes which include, but are not limited to, 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, timeshare project or facility, 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, campsite, park, or lot where a trailer, recreational vehicle, mobile home, motor home or similar conveyance, is occupied, or intended or designated for occupancy by transients for dwelling, lodging, or sleeping purposes, except any private dwelling house or other individually owned single-family dwelling house unit rented only occasionally (infrequently) and incidentally to the normal occupancy by the owner or his family; provided that the burden of establishing that the housing unit or facility is not a hotel as defined in this subsection shall be upon the owner or operator thereof, who shall file with the tax administrator such information as the tax administrator may reasonably require, to establish and maintain such status.

“Occupancy” means the use or possession, or the right or entitlement to the use or possession, of any room, rooms or any portion thereof, in any hotel offered for rent to be used or occupied for dwelling, lodging or sleeping purposes, regardless of the purpose for which the rooms are rented or provided.

“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.

“Qualifying rental agreement” means a written contract signed by both the landlord and tenant, legally enforceable by either party. The qualifying rental agreement shall provide for the right to occupy a specified number of rooms in a hotel for a period of not less than thirty-one consecutive days. “Qualifying rental agreement” expressly excludes:

1. Any agreement, regardless of the rental term, which is terminated for any reason, by either party, or by mutual consent, prior to the thirty-first consecutive day of occupancy; or

2. Any agreement which would be unlawful or constitute a violation of law.

“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 there from whatsoever. “Rent” shall include: any energy surcharges or other surcharges imposed by the operator upon the transient; charges for use of a safe or other secure storage; charges for pets; charges for banquet rooms and meeting rooms.

“Successor to operator” means any person who acquires the right to operate a hotel from a predecessor operator, directly or indirectly, by whatever means, including purchase, foreclosure, operation of lease, or other means. A transfer of ownership or management interest in a hotel wherein the facility continues to operate as such, either continuously or for business interruption not exceeding thirty days, shall constitute a succession for purposes of this definition.

“Tax” means transient occupancy taxes due under this chapter.

“Tax administrator” means the finance director or his or her designated agent.

“Transient” means 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 thirty consecutive calendar days or less, counting portions of calendar days as full days; provided, however, any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty consecutive calendar days has expired, unless there is a qualifying rental agreement in writing between the operator and the occupant providing for a longer period of occupancy. In the event of the existence of a qualifying rental agreement between the operator and any person for the occupancy of space of a hotel, which agreement permits such person to sublet such space to third persons either with or without the prior consent of the operator, then “transient” also means such person to whom such space is sublet for dwelling, lodging or sleeping purposes. (Ord. 04-014 § 1 (part), 2004)

3.28.020 Registration.

A. Prior to the commencement of business, every person engaging in or conducting business as an operator of a hotel renting to transients within the city shall file with the tax administrator an application for a transient occupancy registration permit (the “permit”) for each place of business. Every application for a permit shall be made upon a form prescribed by the tax administrator.

B. At the time of making an application for a permit, the applicant shall pay a registration fee in an amount to be adopted by resolution of the city council.

C. The permit shall, among other things, state the following:

1. The name of the operator;

2. The hotel address;

3. The date upon which the permit was issued;

4. The following statement: “This transient occupancy registration permit signifies that the person named on the face hereof has fulfilled the requirements of the transient occupancy tax chapter by registering with the tax administrator for the purpose of collecting from transients the transient occupancy tax and remitting such tax to the tax administrator. This permit does not authorize any person to conduct any unlawful business in any unlawful manner, nor operate a hotel without strictly complying with all applicable laws, including but not limited to those requiring a permit from any board, commission, department or office of this city. This permit does not apply in lieu of such other permits which are otherwise required.” (Ord. 04-014 § 1 (part), 2004)

3.28.030 Permit required—Posting of permit.

A. No hotel subject to the provisions of this chapter shall operate without a valid transient occupancy tax permit.

B. A valid transient occupancy tax permit shall be posted at all times in a conspicuous place on the premises. (Ord. 04-014 § 1 (part), 2004)

3.28.040 Current information.

During the effective duration of the transient occupancy registration permit, the operator shall promptly update, correct or supplement the information contained in his or her application on file with the city when necessary to keep the information contained therein current and accurate. (Ord. 04-014 § 1 (part), 2004)

3.28.050 Operator not relieved from other permit regulations.

Operators required to obtain a transient occupancy registration permit under this chapter shall not be relieved from obtaining any other permits for the privilege of carrying on any similar or related activity required under any other regulation of the city and shall remain subject to the regulatory provisions of all chapters of the municipal code. (Ord. 04-014 § 1 (part), 2004)

3.28.060 Tax imposed.

For the privilege of occupancy in any hotel, each transient is subject to, and shall pay a tax in the amount of twelve 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 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 shall be paid directly to the city. (Ord. 04-014 § 1 (part), 2004)

3.28.070 Exemptions.

A. No tax shall be imposed upon:

1. The occupancy of a timeshare estate exempt from such tax as provided under Section 7280 of the California Revenue and Taxation Code;

2. The occupancy by right of a membership camping contract exempt from such tax as provided under Section 7280 of the California Revenue and Taxation Code;

3. The occupancy of facilities operated by a local governmental entity as provided under Section 7280 of the California Revenue and Taxation Code;

4. The occupancy of any space in a campsite or campground located in the state park system as provided under section 7282 of the California Revenue and Taxation Code;

5. The occupancy by a transient exempt from payment of transient occupancy tax by treaty or federal or state law;

6. The occupancy by any federal or state of California officer or employee, including employees of federal credit unions, who provide sufficient proof that they are acting on official business; or

7. The occupancy by any other person as to which it is beyond the power of the city to impose the tax provided under this chapter.

B. No exemption shall be granted under this section except upon a claim therefore made at the time the rent is collected, and under penalty of perjury, upon a form prescribed by the tax administrator. (Ord. 04-014 § 1 (part), 2004)

3.28.080 Operator duties and accounting requirements.

A. 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.

B. If an operator collects the rent but fails to collect the tax imposed by this chapter for any reason, the operator shall be required to pay the tax.

C. The amount of the tax charged to each transient shall be separately stated from the amount of the rent charged and each transient shall receive a receipt for payment from the operator. A duplicate of the receipt given to each transient shall be kept by the operator for a period of three years from the date of issuance.

D. 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 provided in this chapter.

E. Each operator shall account separately for, and maintain separate monthly summary totals for taxable and nontaxable rents and for taxes collected.

F. Each operator shall maintain its financial and accounting records in accordance with established accounting practices acceptable to the tax administrator. Records of collection and remittance of the tax shall be maintained by the operator and made available to the tax administrator upon request for a period of three years. (Ord. 04-014 § 1 (part), 2004)

3.28.090 Reporting and remitting.

A. Each operator shall, on or before the last day of the month following the close of each calendar month or such different reporting period as may be established by the tax administrator, file a return with the tax administrator, on forms provided by the tax administrator, of the total rents charged or chargeable under this chapter, the amount of tax collected for transient occupancy and such other information as the tax administrator shall reasonably require. Rent claimed on the return as exempt from the tax under Section 3.28.070 shall be fully itemized and explained on the return or supporting schedule.

B. In determining the amount of “taxable receipts” on the tax return, “rent” as defined in Section 3.28.010, shall not be reduced by any business expenses including, but not limited to, the amount of service charges deducted by credit card companies or commissions paid to travel agencies.

C. The return shall be filed whether or not rents have been charged or taxes have been collected during the month.

D. Each such return shall contain a declaration under penalty of perjury, executed by the operator or his authorized agent, that to the best of the signator’s knowledge, the statements in the return are true, correct and complete.

E. The same basis for accounting used by an operator for keeping books and records shall be used for reporting and remitting under this chapter.

F. At the time the return is filed, the full amount of the tax collected shall be remitted to the tax administrator.

G. All taxes collected by an operator pursuant to this chapter shall be held in trust for the account of the city until payment thereof is made to the tax administrator.

H. The tax administrator may establish either shorter or longer reporting periods if the tax administrator deems it necessary or desirable in order to insure collection of the tax or to increase the efficiency of administration.

I. Returns and accrued tax payments are due immediately upon cessation of business for any reason and subject to the requirements of Section 3.28.130.

J. Returns and taxes not received by the tax administrator on or before the due date as provided in this section are delinquent and subject to the penalties imposed under Sections 3.28.140 and 3.28.150.

K. Returns filed and taxes remitted by mail shall be deemed timely filed only if the envelope or similar container enclosing the returns and taxes is addressed to the tax administrator, has sufficient postage, and bears a United States postmark or a postage meter imprint prior to midnight on the last day for reporting and remitting without penalty. If the envelope or other container bears a postage meter imprint as well as a United States Post Office cancellation mark, the latter shall govern in determining whether the filing and remittance are timely. (Ord. 04-014 § 1 (part), 2004)

3.28.100 Extension for reporting and remitting.

The tax administrator, for good cause, may extend the deadline for the making of any return or paying of any amount required to be paid under this chapter, provided a request therefore is filed with the tax administrator. The extension may not exceed thirty days. Any operator to whom an extension is granted shall pay, in addition to the tax, interest at the rate of one percent per month or fraction thereof, from the date on which the tax would have been due without the extension until the date of payment. (Ord. 04-014 § 1 (part), 2004)

3.28.110 Return not conclusive.

No return filed pursuant to this chapter shall be conclusive upon the city or upon any officer thereof as to the matters therein set forth, and the same shall not prejudice the right of the city to recover any tax that may be ascertained to be due from such operator in addition to the tax amount shown by such report should it be found to be incorrect. (Ord. 04-014 § 1 (part), 2004)

3.28.120 Accuracy of report subject to audit—Right to inspect records.

The accuracy of any report filed pursuant to this chapter shall be subject to audit and verification by the tax administrator who is authorized and empowered to inspect and audit the records and reports of any operator that pertain to the collection and remittance of the tax imposed by this chapter at all reasonable times at a location within the city and may request a subpoena from the city for the records of any operator who refuses to make such records available for examination. The mayor may issue such subpoenas and they shall be attested by the city clerk. (Ord. 04-014 § 1 (part), 2004)

3.28.130 Remitting and reporting requirements upon cessation of business.

A. An operator who is transferring, selling or terminating operations of its hotel shall notify the tax administrator in writing of such sale, transfer or termination and, in the case of a sale or transfer, the name and address of the successor to operator. Notification of transfer, sale or termination of the hotel shall be provided at least thirty days in advance of the date of such transfer, sale or termination, unless the decision to sell, transfer or terminate was made within less than a thirty-day period prior to the transfer, sale or termination, in which case the operator shall then immediately notify the tax administrator.

B. The operator shall, at the same time, notify the successor to operator of its responsibility for remitting unpaid collected taxes and further certify in writing to the tax administrator that the successor to operator was notified of the requirements of this chapter regarding its responsibility for unpaid collected taxes.

C. An operator who is ceasing hotel operations shall make a return to the tax administrator at least ten days in advance of the cessation, unless the decision to cease hotel operations was made within less than a ten-day period in which case the operator shall then immediately make the return to the tax administrator. The return shall be made on approved forms available from the tax administrator and shall reflect the total taxable rents charged, the amount of tax collected for the reporting period, remittances made, if any, and the balance of the tax due at the time the return is filed. At the time the return is filed, the full amount of the balance of the tax due, if any, shall be remitted to the tax administrator. After filing the final return and remitting the balance due, the operator shall make the hotel’s records of account available for a closeout audit by the tax administrator or duly authorized city employee. Returns filed and taxes remitted and actually received by the tax administrator on or before ten days prior to the cessation of business shall be deemed timely filed and remitted; otherwise, the taxes are delinquent and subject to the penalties imposed under Sections 3.28.140 and 3.28.150.

D. An operator who is transferring or selling a hotel and who is liable for any tax and/or penalties under this chapter has a duty to report the amount of the tax and/or penalties to the successor to operator. The successor to operator shall then have a duty to withhold a sufficient portion of the purchase price to equal the amount of such tax and/or penalty until the operator produces a receipt from the tax administrator stating that the tax and/or penalty has been paid or a “tax clearance certificate” from the tax administrator stating that no tax or penalty is due. If the operator does not present a receipt or tax clearance certificate prior to the date such successor commences to conduct business, the successor to operator shall deposit the amount withheld with the tax administrator pending settlement of operator’s account.

E. If the successor to operator fails to withhold a portion of the purchase price as required under this chapter, it shall be liable to the city for the payment of the amount required to be withheld. Within ten days of receiving a written request from a successor to operator for a tax clearance certificate stating that no tax or penalty is due, the tax administrator shall either issue the certificate or mail notice to the successor to operator at its address as it appears on the records of the tax administrator of the estimated amount of the tax and penalty that must be paid as a condition of issuing the certificate. (Ord. 04-014 § 1 (part), 2004)

3.28.140 Penalty for delinquency.

Any operator who fails to remit any tax imposed by this chapter within the time required, including amounts determined due by the tax administrator under Section 3.28.160, shall pay a penalty of ten percent of the amount of the tax. In addition, interest shall accrue on both the unpaid tax and penalty at the rate of one-half percent per month, or fraction thereof, from the date on which the tax becomes delinquent until the date of remittance to the city. In the event the operator pays the tax, but fails to pay any interest or penalties, interest shall accrue upon the amount of the unpaid interest and penalty until the date of remittance to the city. (Ord. 04-014 § 1 (part), 2004)

3.28.150 False and fraudulent reports—Penalties for fraud.

A. It is unlawful for any operator or person to willfully make, render, sign or verify any false or fraudulent report required by this chapter with intent to defeat or evade the determination of any amount required to be paid by this chapter.

B. If the tax administrator determines that the failure to make any remittance or payment due under this chapter is due to fraud, a penalty of one hundred percent of the amount of the tax and penalties shall be added thereto in addition to the penalties stated in Section 3.28.140. (Ord. 04-014 § 1 (part), 2004)

3.28.160 Failure to collect or report tax: notice of assessment and/or jeopardy determination.

A. If any operator shall fail or refuse to collect the tax or to file any report or remit any taxes or any portion thereof as and when required under this chapter or if such operator fails to maintain complete and accurate records as required under Section 3.28.090, the tax administrator shall proceed to assess the applicable taxes and penalties provided for by this chapter against the operator as set forth in subsection B of this section.

B. Upon an operator’s failure or refusal to make or file a timely complete and accurate return or remittance of tax due under this chapter, the tax administrator shall proceed in such a manner as he or she shall deem necessary to obtain facts and information upon which to base an assessment of tax due. Upon such determination, the tax administrator shall proceed to assess the tax, penalties and interest due by the operator and shall deliver a written notice of assessment to the operator as provided in subsection E of this section.

C. No determination of taxes, penalties and interest due by an operator under subsection B of this section shall be conclusive upon the city or prejudice the right of the city to collect additional amounts due. In the event the tax administrator determines taxes, penalties and interest assessed against an operator were less than those amounts actually owed, the tax administrator shall be entitled to collect the additional taxes, penalties and interest due by the operator upon written demand as provided in subsection E of this section. Penalties and interest shall accrue on such amounts as of the original delinquency date.

D. Upon an operator’s violation of this chapter as provided in subsection A of this section and in addition to the notice of assessment as provided in subsection B of this section, to ensure the collection and remittance of taxes due the city, the tax administrator may require an operator to provide weekly or daily reports and tax remittance to the city pursuant to a written jeopardy determination as provided in subsection E of this section. The tax administrator shall cancel the requirements imposed under the jeopardy determination upon the operator’s compliance with all reporting requirements imposed by the tax administrator and remittance of all delinquent amounts due to the city under this chapter.

E. The tax administrator shall deliver the notice of assessment or notice of a jeopardy determination to the operator or deposit the same in the United States mail, postage prepaid, addressed to the operator at the operator’s place of business identified in the transient occupancy registration permit. (Ord. 04-014 § 1 (part), 2004)

3.28.170 Administrative remedies and appeals.

A. Any operator in receipt of a notice of assessment or jeopardy determination authorized pursuant to this chapter may appeal to a hearing officer by filing a notice of appeal with the city manager or his or her designee within fifteen days after service of a notice of assessment or jeopardy determination.

B. All appeals filed pursuant to this section shall be conducted by a hearing officer pursuant to the procedures set forth at Chapter 8.02 of this code. In the case of a notice of assessment, if application by the operator for a hearing is not made within the time prescribed, the amount determined due under the notice of assessment shall become final and conclusive and immediately due and payable. In the case of a jeopardy determination, if application for a hearing is not made within the time prescribed, no further consideration of the conditions imposed by the tax administrator shall be considered until the operator complies with all reporting requirements imposed by the tax administrator and remits all amounts due under this chapter. The hearing officer’s decision shall be final and conclusive. (Ord. 04-014 § 1 (part), 2004)

3.28.180 Refunds.

A. Whenever the amount of any tax or penalty has been overpaid, paid more than once or has been erroneously or illegally collected or erroneously received by the city under this chapter, the overpayment may be refunded as provided in subsections B and C of this section, provided a claim in writing under penalty of perjury stating 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 available from the tax administrator.

B. An operator may claim a refund or take as a 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 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. An operator who has remitted an amount in excess of the amount required to be paid by this chapter may receive a credit to the extent of the excess. If the excess is discovered as a result of an audit by the city, no claim need be filed by the operator. Such credit, if approved by the tax administrator shall be applied to any deficiency found or any further tax payments due under the rules prescribed by the tax administrator.

E. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records. (Ord. 04-014 § 1 (part), 2004)

3.28.190 Actions to collect taxes.

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 and payable through the operator. Any person owing money to the city under the provisions of the chapter shall be liable to an action brought in the name of the city of San Pablo for the recovery of such amount. Upon the concurrence of the city manager, the tax administrator is authorized to compromise the collection of the amount or establish a schedule of payment for any tax due, or to discontinue the collection of any claim if it appears that further proceedings would be without merit. (Ord. 04-014 § 1 (part), 2004)

3.28.200 Divulging of information prohibited.

A. No person having an administrative duty under this chapter shall make known in any manner whatever the business affairs, operations, or information obtained by an investigation of the records of any operator or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any return, or to knowingly permit any return or copy thereof or any abstract or particulars thereof to be seen or examined by any person, except upon order of a court of competent jurisdiction or to an officer or agent of the United States, the state of California, the county of Contra Costa or the city of San Pablo for official use only.

B. Successors, receivers, trustees, executors, administrators, assignees and guarantors, if directly interested, may be given information as to the items included in the amounts of any unpaid tax or amounts of tax, penalties, and interest required to be collected.

C. This section shall not apply to disclosures made in connection with any hearing, appeal, or any civil action or proceeding relating to the determination or recovery of the tax. (Ord. 04-014 § 1 (part), 2004)

3.28.210 Administrative citation.

The city may issue an administrative citation, pursuant San Pablo Municipal Code, Chapter 1.10, to any person responsible for committing, causing or maintaining a violation of this chapter. (Ord. 04-014 § 1 (part), 2004)

3.28.220 Public nuisance.

Any violation of this chapter by the holder of a transient occupancy registration permit or any business license validly issued pursuant to this or any other chapter of the municipal code shall constitute a public nuisance and may be subject to abatement as provided under Chapter 8.02. (Ord. 04-014 § 1 (part), 2004)

3.28.230 Severability.

If any sections, subsections, sentences, clauses, phrases or portions of the ordinance codified in this chapter are for any reason held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter. The people of the city of San Pablo and the city council declare that they would have passed this and each section, subsection, phrase or clause of the ordinance codified in this chapter whether or not any one or more sections, subsections, phrases or clauses may be declared invalid or unconstitutional on their face or as applied. (Ord. 04-014 § 1 (part), 2004)

3.28.240 Effective date.

The ordinance codified in this chapter shall be considered adopted upon the date the vote is declared by the legislative body, and shall go into effect ten days after that date. (Ord. 04-014 § 1 (part), 2004)

3.28.250 Changes without voter approval.

The city council is authorized to make any amendments to this chapter, as adopted by the voters, without a vote of the people; provided, however, that it shall not increase any of the taxes specified in this chapter without complying with all relevant constitutional and statutory provisions. (Ord. 04-014 § 1 (part), 2004)