Chapter 3.36
ADMISSION TAX*
* Editor’s Note: Pursuant to Section 3 of Ordinance No. 86-44,** as amended by Ordinance No. 86-46, this chapter shall be effective as to events which take place or occur on or after October 1, 1986; except that the effective date as to amusement rides shall be January 1, 1987. Further, this chapter shall not apply as to events for which the admission charge has been paid prior to October 1, 1986, but which will take place or occur after October 1, 1986, but not later than December 31, 1986.
** Editor’s Note: Ordinance No. 86-44 superseded Ordinance No. 86-25 in entirety.
Sections:
3.36.060 Contents of certificate.
3.36.080 Revocation of certificate.
3.36.100 Reporting and remitting.
3.36.120 Penalties and interest.
3.36.140 Deficiency determination.
3.36.150 Offsetting of overpayment.
3.36.160 Notice of determination.
3.36.212 Warrant for collection of tax.
3.36.214 Successor’s and assignee’s responsibility.
3.36.220 Repealed by Ord. 90-04 § 2.
3.36.010 DEFINITIONS.
For purposes of this chapter, certain words and phrases shall be construed as follows:
(1) “Admission charge” shall mean any charge, whether or not so designated for the right or privilege to enter, occupy, or use a seat or space in any facility as hereinafter defined, or to participate as a patron in any event. It shall also mean season passes or subscriptions but shall not be construed to include complimentary, promotional or otherwise free-of-charge tickets or passes given by any operator or person.
(2) “Director” shall mean the director of finance of the city or his or her designee.
(3) “Facility” shall mean and include any building, structure, place or location wherein or at which any form of event is or can be held, carried on or conducted.
(4) “Event” shall mean any entertainment, amusement or recreational activity, for which an admission charge is made, and shall include, but shall not be limited to: circuses, motion picture shows, shows of all kinds, all sporting contests and athletic events, including exhibitions, concerts, lectures, theatrical and musical performances, bowling, dancing, golf (including miniature golf), swimming and bathing, speeches, fairs, carnivals, menageries, amusement rides and devices and all forms of recreation in or at amusement parks, billiards, pool, or any other form of diversion, sport, pastime or recreation.
(5) “Operator” shall mean any person conducting, operating, or maintaining in whole or in part as principal, agent, officer, employee or independent contractor any event, or facility, as defined in this chapter, taxable under this chapter. For purposes of collecting the tax provided for in this chapter, there are two classes of operators, as follows: (a) one who conducts, operates, or maintains an established fixed facility, wherein events are held, carried on or conducted in the operator’s normal course of business, hereinafter referred to as a “fixed operator”; and (b) any other operator, hereinafter referred to as a “nonfixed operator.”
(6) “Patron” shall mean any person who pays or on account of whom is paid any admission charge or admission price for the right or privilege of being admitted to or to use any facility, or to participate in any event. The term “patron” shall not include (i) a bona fide employee of the operator when admission to the facility is incident to said employee’s duties, and (ii) any employee or official of the state of California, or any agency, instrumentality or department thereof, the city, or United States Government whose official duty makes it necessary to gain admission to any event.
(7) “City” shall mean the city of Santa Cruz.
(Ord. 86-44 § 1 (part), 1986).
3.36.020 TAX IMPOSED.
There is hereby imposed a tax in an amount equal to five percent of the price of the admission charge, including a season ticket or subscription, for the privilege of admission to any event in or at a facility. Such tax is a debt owed by the patron to the city, which debt shall be extinguished only by payment to the operator or to the city. Such tax shall be in addition to all other taxes or fees imposed by law.
(Ord. 86-44 § 1 (part), 1986).
3.36.030 OPERATOR’S DUTIES.
(1) Each operator shall collect the tax imposed by this chapter from any patron who pays an admission charge or purchases an admission ticket or season ticket or subscription. Every operator shall hold the tax imposed by this chapter in trust until the same is remitted to the director as hereinafter provided.
(2) It shall be the duty of each fixed operator to assure that, for each taxable event that is conducted at the fixed operator’s facility, the tax imposed by this chapter is collected and remitted to the director as hereinafter provided. If the event promoter, whether or not a nonfixed operator, for any reason fails to either collect or remit the tax, the fixed operator shall be responsible for doing so and the director may proceed against the fixed operator in accordance with this chapter for the fixed operator’s failure to account for and remit the tax.
(Ord. 2013-06 § 1, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.040 EXEMPTIONS.
An application may be filed with the director for exemption from the tax imposed by this chapter if the charge paid for the event is one specified by this section. The director may require such information in the application for the certificate of exemption, or in addition thereto, as will enable the director to determine whether the charge for which the exemption is sought is eligible therefor. A certificate of exemption issued to an operator pursuant to this section shall likewise apply to the operator’s subcontractors and employees.
The following charges shall be exempt:
(1) The charge to play and/or operate an amusement ride, amusement device or amusement game, where the total cost to play and/or operate is less than thirty cents;
(2) The charge to play and/or operate any coin or token operated pinball machine or electronic game;
(3) Charges levied as membership fees for memberships in social, fraternal, or nonprofit clubs or organizations, where annual membership is required as a condition to admission to the club’s or organization’s facilities;
(4) Charges for membership or participation in or use of health clubs, athletic gyms, martial arts studios, yoga studios, meditation studios, Pilates studios, massage facilities, health spas and other physical fitness facilities which advance active bodily health and fitness;
(5) Charges for registration or participation in events held or conducted by a public agency or by established public elementary or high school level schools or private elementary or high school level schools meeting the requirements of Education Code Sections 33190, 33191 and 48222 and which operate and maintain fixed facilities devoted to educational purposes;
(6) Charges levied as tuition fees for the privilege of attendance at a class or lecture or series of classes or lectures of an educational nature, conducted by a public agency or by any public or private high school meeting the requirements established in subsection (5);
(7) Charges levied by businesses or individuals for academic tutoring, music lessons, art lessons, dance lessons and craft lessons.
(Ord. 2019-24 § 1, 2020: Ord. 2013-06 § 2, 2013: Ord. 97-03 § 1, 1997: Ord. 86-44 § 1 (part), 1986).
3.36.050 REGISTRATION.
(1) Prior to conducting, operating, or maintaining any event or facility which is subject to this chapter, each operator shall register with the director and obtain from him or her an admission tax registration certificate to be at all times posted in a conspicuous place on the premises, or on file with the manager of the facility.
(2) Upon registration, a nonfixed operator shall make an advance deposit with the director equal to the estimated amount of the tax to be collected by the operator.
(Ord. 2013-06 § 3, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.060 CONTENTS OF CERTIFICATE.
The certificate issued pursuant to Section 3.36.040, shall include, among other things, the following:
(1) The name of the operator;
(2) The address of the facility;
(3) The date upon which the certificate was issued;
(4) If issued to a nonfixed operator, the period of time during which the event, or if successive events on consecutive days, the total period for all events;
(5) “This admission tax registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the city’s admission tax regulations by registering with the director for the purpose of collecting from patrons the admission tax and remitting said tax to the director. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner. This certificate does not imply that the business is either lawful or lawfully conducted and it does not constitute a permit.”
(Ord. 2013-06 § 4, 2013; Ord. 86-44 § 1 (part), 1986).
3.36.070 TERM OF CERTIFICATE.
All certificates issued pursuant to Section 3.36.050 shall be valid for the following periods:
(1) Certificates issued to fixed operators shall be valid for a period which may be established by the director of finance unless otherwise revoked pursuant to Section 3.36.080.
(2) Certificates issued to nonfixed operators shall be valid for the period of each specific event for which the certificate is issued. A separate certificate shall be required for each individual event, except events which are scheduled to occur on consecutive days, in which case a single certificate shall be valid for all successive occurrences of the event.
(Ord. 2013-06 § 5, 2013: Ord. 90-04 § 1 (part), 1990: Ord. 86-44 § 1 (part), 1986).
3.36.080 REVOCATION OF CERTIFICATE.
The director shall revoke a certificate under this chapter on a finding that:
(1) The applicant for such certificate or renewal has willfully failed to remit or has expressed his or her intent to fail to remit the tax imposed by this chapter; or
(2) The applicant for such certificate or renewal has failed to supply the director with any information or records required to be submitted pursuant to this chapter.
(Ord. 2013-06 § 6, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.090 NONTRANSFERABILITY.
No admission tax registration certificate may be transferred or assigned.
(Ord. 2013-06 § 7, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.100 REPORTING AND REMITTING.
Each operator shall, on the date or within the time hereafter prescribed, make a return to the director, on forms provided by the director, of the total admissions charges collected and received and the amount of tax collected from patrons. At the time the return is filed, the full amount of any tax collected and due shall be remitted to the director. Those amounts not paid shall immediately become delinquent. The director may establish special reporting periods for any operator if the director deems it necessary to assure collection of the tax, and the director may require further information to be included in the return. Returns and payments are due and payable immediately upon cessation of business by the operator for any reason.
The regular reporting and remittance period shall be as follows:
(1) For each fixed operator, on or before the last day of the month following the close of the prior month, or at the close of any shorter reporting period that may be established by the director;
(2) For each nonfixed operator, not later than ten days after the conclusion of the event, or within such shorter reporting period that may be established by the director. The director shall calculate any additional tax due that exceeds the amount of the nonfixed operator’s deposit, and that amount shall be immediately paid by the operator to the director. If reconciliation of the deposit amount with the return indicates a refund is due, it will be refunded to the operator.
(Ord. 2013-06 § 8, 2013; Ord. 86-44 § 1 (part), 1986).
3.36.110 COLLECTION SECURITY.
The director, whenever he or she deems it necessary to assure faithful compliance with this chapter, may require any operator subject to the provisions of this chapter to deposit with the director security for payment of taxes. The amount of the security shall be fixed by the director but shall not be greater than twice the estimated average liability for the period for which accounting and return are required under Section 3.36.080. Such security may be in the form of cash, cashiers’ check made payable to the city, certified check made payable to the city, or a surety bond inuring to the benefit of the city, which bond shall be executed by a corporation authorized to do business in the state of California.
(Ord. 86-44 § 1 (part), 1986).
3.36.120 PENALTIES AND INTEREST.
(1) Tax Returns and Remittance of Deficiency Determinations.
(a) Original Delinquency. Any operator who fails to file a tax return or pay a deficiency determination within the time required shall pay a penalty of ten percent of the tax in addition to the amount of the tax.
(b) Continued Delinquency. Any operator who fails to file a tax return or pay a deficiency determination on or before a period of thirty days following the date on which it first became delinquent shall pay a second delinquency penalty of fifteen percent of the amount of tax in addition to the amount of tax and the ten percent penalty first imposed.
(c) Interest. Interest shall accrue as prescribed in subsection (3) below.
(2) Tax Returns and Deficiency Determinations.
(a) Negligence. If the director determines that any tax found to be due under this chapter or the delinquent filing of a tax return is due to negligence, a penalty of fifteen percent of the amount of tax shall be added thereto in addition to any other penalties which may be imposed.
(b) Fraud. If the director determines that any tax found to be due under this chapter or the delinquent filing of tax return is due to fraud or an intentional disregard or an intent to evade this part or authorized rules and regulations, a penalty of forty percent of the tax shall be added thereto in addition to any other penalties which may be imposed.
(c) Interest. Interest shall accrue as prescribed in subsection (3) below.
(3) 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 and one-half percent per month or fraction thereof on the amount of tax, exclusive of penalties, from the last day of the month following the monthly period for which the amount or any portion thereof should have been paid until the date of payment.
(4) Relief from Penalties and Interest.
(a) Excusable Delay. If the director finds that an operator’s failure to make a timely return or payment is due to reasonable cause and circumstances beyond the operator’s control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the director may waive the penalty provided for in subsection (1) above. Any person seeking to be relieved of the penalty shall file with the director a statement under penalty of perjury setting forth the facts upon which the claim for relief is based. This request for relief from the first penalty must be filed within thirty days of the date the remittance was due to the city, but no later than ten days of the city’s notice to the operator of the amount past due.
(5) Penalties Merged with Tax. Every penalty and such interest as accrues under the provisions of this section shall become part of the tax herein required to be paid.
(Ord. 2013-06 § 9, 2013; Ord. 86-44 § 1 (part), 1986).
3.36.130 FAILURE TO COLLECT.
If any operator required to collect and remit the tax imposed by this chapter fails to file and return a remittance, the director shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the director obtains such facts and information on 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 or she shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter.
(Ord. 86-44 § 1 (part), 1986).
3.36.140 DEFICIENCY DETERMINATION.
If the director has reasonable cause to believe the return or returns of the amount of tax required to be paid to the city by any operator are erroneous, he or she shall compute and determine the amount required to be paid upon the basis of (i) facts contained in the return or returns, (ii) other substantial evidence, or (iii) application of standard accounting techniques. A deficiency determination for one period shall not constitute a release or waiver for other deficiencies in the same or another period.
(Ord. 86-44 § 1 (part), 1986).
3.36.150 OFFSETTING OF OVERPAYMENT.
In making a determination pursuant to Sections 3.36.110 and 3.36.120, the director may offset any overpayments for a period or periods against underpayments, against penalties, and against interest.
(Ord. 2013-06 § 10, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.160 NOTICE OF DETERMINATION.
The director shall give to the operator written notice of any determinations made pursuant to Sections 3.36.110 and 3.36.120. This notice may be served personally or by depositing in the United States postal service, postage pre-paid, and addressed to the operator at his or her address as it appears in the records of the director. In case of service made by mail of any notice required under this chapter, the service is complete at the time of deposit of the notice.
(Ord. 86-44 § 1 (part), 1986).
3.36.170 HEARING.
Any operator served pursuant to Section 3.36.160 may, within ten days after servicing or mailing such notice, make application in writing to the director for a hearing by the director to review the amounts determined and assessed under Sections 3.36.110 and 3.36.120. 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 shall become final and conclusive and immediately due. If such application is made, the director shall give not less than five days’ written notice in the manner prescribed by Section 3.36.160 to the operator to show cause at a time and place fixed in such notice why such amount specified therein should not be assessed including such tax interest and penalties, if any. 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 shall determine the proper tax together with interest and penalties thereon to be remitted and shall thereafter give written notice thereof to the operator in the manner prescribed in Section 3.36.160. The amount determined to be due shall be payable after fifteen days unless an appeal is taken as provided in Section 3.36.180.
(Ord. 2013-06 § 11, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.180 APPEAL.
Any operator aggrieved by any decision of the director with respect to the amount of such tax or interest and penalties, if any, may appeal to the city council in accordance with the provisions of Chapter 1.16 of this code. The decision of the council shall be final and conclusive. Any amounts determined shall be due and payable on the service of notice of the decision, which shall be served in the manner set forth in Section 3.36.140.
(Ord. 86-44 § 1 (part), 1986).
3.36.190 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 four years, all records sufficient in nature to determine the amount of such tax as the operator may have been liable for the collection of payment to the city. Records which shall be kept shall include, but are not limited to, records of admission on a daily basis by number and price and all cash register tapes. The director may examine the books, papers, records and equipment of any operator liable for the tax imposed by this chapter and may investigate the character of the business of the operator in order to verify the accuracy of any return made, or if no return is made by the operator, to ascertain and determine the amount required to be paid.
(Ord. 2013-06 § 12, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.200 REFUNDS.
(1) 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 herein; provided, that a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the director within one year of the date of payment. The claim shall be on forms furnished by the director.
(2) An operator may claim a refund or take as credit against taxes collected and remitted any amount overpaid, paid more than once or erroneously or illegally collected or received. Neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the patron or credited to an admission charge subsequently payable by the patron to the operator.
(3) A patron 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 (1), but only when a tax was paid by the patron directly to the director or when the patron, having paid the tax to the operator, establishes to the satisfaction of the director that the patron has been unable to obtain a refund from the operator who collected the tax.
(4) No refund shall be paid unless the claimant establishes his or her right thereto by written records showing entitlement thereto.
(Ord. 86-44 § 1 (part), 1986).
3.36.210 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 Santa Cruz for the recovery of such amount and for attorneys’ fees in the enforcement of this chapter.
(Ord. 2013-06 § 13, 2013: Ord. 86-44 § 1 (part), 1986).
3.36.211 LIEN – RECORDATION.
If any amount required to be paid to the city under the ordinance codified in this chapter is not paid when due, the director, upon expiration of the second delinquency period referenced in Section 3.36.120(1)(b), may, within four years after the amount is due, record in the office(s) of the county recorder(s) of any county in the state of California a certificate specifying the amount of tax, penalties and interest due, the name and address of the operator liable for the same and the fact that the director has complied with all provisions of this chapter in the determination of the amount required to be paid. From the time of the recording, the amount required to be paid together with penalties and interest shall constitute a lien upon any and all real property in any county owned by the operator or thereafter acquired by the operator. The lien shall have the force, effect and priority of a judgment lien and shall continue for ten years from the time of filing of the certificate unless sooner released or otherwise discharged.
(Ord. 2013-06 § 14, 2013).
3.36.212 WARRANT FOR COLLECTION OF TAX.
At any time within four years after any operator is delinquent in the payment of any amount herein required to be paid off after the last recording of a certificate of lien under Section 3.36.211, the director may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the city under this chapter. The warrant shall be directed to any sheriff, marshal or constable and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution. The director may pay or advance to the sheriff, marshal or constable the same fees, commissions and expenses for his or her services as are provided by law for similar services pursuant to a writ of execution.
(Ord. 2013-06 § 15, 2013).
3.36.213 SEIZURE AND SALE.
At any time within four years after any operator is delinquent in the payment of any amount, the director may forthwith collect the amount in the following manner: The director shall seize any property, real or personal, of the operator and sell the property, or a sufficient part of it, at public auction to pay the amount due together with any penalties and interest imposed for the delinquency and any costs incurred on account of the seizure and sale. Any seizure made to collect occupancy taxes due shall be only of property of the operator not exempt from execution under the provisions of the California Code of Civil Procedure.
(Ord. 2013-06 § 16, 2013).
3.36.214 SUCCESSOR’S AND ASSIGNEE’S RESPONSIBILITY.
If any operator, while liable for any amount under this chapter, sells, assigns or otherwise transfers the business, whether voluntarily or involuntarily, the operator’s subsequent successor, assign or other transferee, or other person or entity obtaining ownership or control of the business, shall satisfy any admission tax liability owed to the city associated with the business. Failure to do so for the benefit of the city will result in being personally liable to the city for the full amount of the admission tax liability, which includes interest and penalties.
The successor operator, assign, purchaser, transferee, or other person or entity seeking to obtain ownership or control of the business shall notify the director of the date of transfer at least thirty days prior to the transfer date; or if the agreement to sell, transfer, or otherwise dispose of the business was made less than thirty days prior to the date of transfer, notice shall be provided immediately.
The successor operator, assign, purchaser, transferee, or other person or entity who obtains ownership or control of the business shall be deemed to have complied with the requirement of this section to satisfy the unpaid admission tax liability, if that person or entity complies with the requirements of California Revenue and Taxation Code Section 7283.5 by withholding from the purchase price an amount sufficient to cover the tax liability, or by otherwise paying the tax liability until the director of finance provides an admission tax clearance certificate showing that it has been paid and stating that no amount is due through the date of transfer.
The director, within ninety days of receiving a written request from a successor operator, assign, purchaser, transferee, or other person or entity who obtains or attempts to obtain ownership or control of the hotel, may issue an admission tax clearance certificate stating either the amount of tax liability due and owing for the property, or stating that there is no tax liability due and owing for the property. The director may also request financial records from the current or former owner or operator to conduct an audit of the admission tax that may be due and owing. After completing the audit within ninety days after the date that the records were made available, the director may issue a tax clearance certificate within thirty days of completing the audit, stating the amount of the tax liability owed, if any. If the city determines that the records provided for an audit are insufficient, the director may rely on the facts and information available to estimate any admission tax liability associated with the property. The director may issue a tax clearance certificate stating the amount of the tax liability, if any, based on such facts and information available. A written application for a hearing on the amount assessed on the tax clearance certificate must be made within ten days after the serving or mailing of the certificate. The hearing provision of Section 3.36.170 shall apply. If an application for a hearing is not made within the time prescribed, the tax clearance certificate shall serve as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.
(Ord. 2013-06 § 17, 2013).