Chapter 3.16
TRANSIENT OCCUPANCY TAX
Sections:
3.16.021 Exemptions from Taxation.
3.16.040 Registration certificate.
3.16.050 Reports and remittances.
3.16.060 Failure to remit tax when due.
3.16.070 Failure to collect tax.
3.16.120 Penalty for violation.
For statutory provisions authorizing local taxes on transient occupancies, see Rev. and Tax. Code §§7280 and 7281.
Two sections in Ordinance 613 are numbered 4 and 5.
3.16.010 Definitions.
Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:
A. “Hotel” means any structure or any portion of any structure that is occupied or intended or designated for occupancy by transients for dwelling, lodging or sleeping purposes, including 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.
B. “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.
C. “Operator” means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, contractor, subcontractor, licensee or any other capacity. Where the operator performs his or her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.
D. “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.
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, services, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever.
F. “Tax administrator” means the City Finance Manager or his or her designee or such other person as the City Manager may, from time to time, designate.
G. “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 (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 which case the occupant shall be deemed a “long-term occupant”, who shall be exempt from the payment of the tax required by this chapter. 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.
H. “Transient occupancy tax” or “tax” means that tax levied by the City and collected by the operator on the City’s behalf pursuant to this chapter.
(Ord. 1693, Amended, 05/27/2003)
3.16.020 Imposed.
For the privilege of occupancy in any hotel, such transient is subject to and shall pay a tax in the amount of eight (8) percent of the rent charged by the operator. Such 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 operator provides the occupancy free of charge or at a reduced rate and in exchange receives consideration or a benefit for such occupancy or reduction in charge (e.g., the occupancy is provided for promotional or marketing purposes), the rent upon which the tax is based shall be deemed to be the greater of (i) the value of the total consideration received by the operator; or (ii) the average rent of all comparable rooms in the hotel on the day the room was provided free of charge or at a reduced rate. However, in those instances where there is clearly no benefit received by the hotel (e.g., the room is used without charge by relatives of the operator, the room is provided to resolve a complaint, the room is provided without charge during a community disaster), such rooms shall be considered to be “true complimentary rooms”, and as such, not subject to the tax. In all other cases, the tax shall be paid by the transient upon the transient’s cessation of occupancy of space in the hotel, regardless of whether the operator collects, or is able to collect, the rent that would otherwise be owed.
If a room reservation is cancelled for any reason prior to occupancy, and the operator charges the person canceling the reservation for the use of such room in whole or in part (e.g., the person is charged for the occupancy even though he or she did not occupy or use the space), the amount charged and collected shall be deemed to be the rent upon which the tax shall be based, and the operator shall collect and pay such tax to the City.
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 Tax Administrator.
(Ord. 1693, Amended, 05/27/2003; Ord. 1645, Amended, 11/23/2000)
3.16.021 Exemptions from Taxation.
No tax under this chapter shall be imposed upon the following:
1. Any space or room deemed a “true complimentary room”, as described in Section 3.16.020, above.
2. Any person who is a “long-term” occupant, as described in Section 3.16.010, above.
3. Any person as to whom, or any occupancy as to which, is beyond the power of the City to impose the tax; or,
4. Any officer or employee of the federal government or a foreign government who is exempt by reason of express provision of federal law or international treaty.
Exemptions from the payment of the tax are permitted only when the operator completes and executes under penalty of perjury at the time rent is collected an exemption claim form provided by the Tax Administrator and submits such form to the Tax Administrator. The exemption claim form shall be available at the City Finance Administration office, or such other place as the City Manager may designate from time to time.
In order to qualify as a “long-term occupant”, an exemption claim form must be completed in full by the operator and signed by the exempt occupant prior to, or on the first day of, occupancy indicating the length of the occupant’s stay. In the absence thereof, the occupant is deemed to be a transient during the initial thirty (30) days of occupancy.
Determination of whether or not an exemption from tax applies shall be made by the Tax Administrator based upon his or her review and verification of the written documentation required by the tax administrator and submitted by the operator in support of the claimed exemption.
(Ord. 1693, Added, 05/27/2003)
3.16.030 Collection.
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 operator or operator’s agent shall collect the tax and hold such taxes in trust for the City. The operator or operator’s agent shall have a fiduciary duty to hold such taxes in the name of the City and shall not use such taxes for any other purpose save and except for payment of the same to the City. 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 provided in this chapter.
(Ord. 1693, Amended, 05/27/2003)
3.16.040 Registration certificate.
Within thirty (30) days after the effective date of the ordinance codified in this chapter, or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register such hotel with the Tax Administrator and obtain from him or her a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises. Such 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. The following statement: “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 such 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.”
Notwithstanding anything herein to the contrary, any changes in management or ownership of the hotel, regardless of whether such change constitutes a change in the operator or ownership of the hotel which would require a new transient occupancy registration certificate, must be reported, in writing, to the Tax Administrator within seven (7) days after the effective date of such change.
(Ord. 1693, Amended, 05/27/2003)
3.16.050 Reports and remittances.
Each operator shall, on or before the last day of each month or at the close of any shorter reporting period that may be established by the Tax Administrator, make a return to the Tax Administrator on forms provided by the Tax Administrator of the total rents charged and received and the amount of tax collected during the previous month for transient occupancies. By way of example, each operator shall submit to the tax administrator the return for the period of October 1st through 31st no later than the following November 30th. 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 or she deems it necessary in order to insure collection of the tax, and he or 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.
(Ord. 1693, Amended, 05/27/2003)
3.16.060 Failure to remit tax when due.
A. Failure to Remit Tax: Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten (10) percent of the amount of the tax in addition to the amount of the tax.
B. Failure to Remit Tax: 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 percent of the amount of the tax in addition to the amount of the tax and the ten 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 twenty-five (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. Recordkeeping violations. In the event an initial audit of an operator’s records reveals that the operator has not maintained the records required to be maintained pursuant to this chapter, including, but not limited to, those specified in Section 3.16.090 of this chapter, the Tax Administrator shall provide written notice to such operator of such violation. The Tax Administrator may thereafter conduct subsequent audits until it is determined that the operator has met all such reporting requirements. If the operator’s failure to comply with the reporting requirements creates the need for a subsequent audit(s) by the Tax Administrator, the operator shall be subject to the imposition of the administrative fine permitted under Section 3.16.120 of this chapter. The operator shall also pay to the City all costs reasonably incurred by the City in conducting such subsequent audit(s).
E. 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 (1.5) 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.
F. 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 required to be paid under this section.
(Ord. 1693, Amended, 05/27/2003)
3.16.070 Failure to collect tax.
A. If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter, any report and remittance of such tax or any portion thereof required by this chapter, the Tax Administrator 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 Tax Administrator procures such facts and information as he or she 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, the Tax Administrator 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 to the operator by serving it personally or by depositing it in the United States Mail, postage prepaid, addressed to the operator so addressed at his or her 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 Tax Administrator for a review of the amount assessed.
B. If application by the operator for a review 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 timely made, the Tax Administrator shall give not less than five (5) days’ written notice in the manner prescribed in this chapter to the operator to show cause at a time and place fixed in such notice why such amount specified therein should not be fixed for such tax, interest and penalties. At such review the operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such review the tax administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the operator in the manner prescribed in this chapter of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable within fifteen (15) days of the date of service or mailing of the Tax Administrator’s decision unless an appeal is taken as provided in Section 3.16.080.
(Ord. 1693, Amended, 05/27/2003)
3.16.080 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 City Manager 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 City Manager shall fix a time and place for hearing such appeal, and the City Clerk or such other person designated by the City Manager shall give notice in writing to such operator at his or her last known place of address. The findings of the City Manager shall be final and conclusive and shall be served upon the appellant in the manner prescribed for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of such findings.
(Ord. 1693, Amended, 05/27/2003)
3.16.090 Records required.
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 not less than three (3) years, not including the present calendar year, all records as may be necessary to determine the amount of such tax as the operator may have been liable for the collection of and payment to the City, which records the City shall have the right to inspect at all reasonable times. The City may issue a subpoena pursuant to Section 37104 et seq. of the California Government Code or utilize any other lawful means to access and inspect the records of an operator who refuses to make such records available for inspection.
The records maintained by the operator under this section shall include, but are not limited to, the following:
A. A written report that includes daily records of all of the following:
1. Name of person occupying the room;
2. Number or other identifier of the room occupied;
3. Room rate;
4. Amount charged, if any, for the occupancy;
5. Amount of transient occupancy tax collected; and
6. Method of payment.
B. A written record of each occupancy charge for which an exemption is claimed, including the name of the person occupying the room, date(s) of occupancy, reason(s) for the exemption, and the exemption claim form required under Section 3.16.021 of this chapter.
(Ord. 1693, Amended, 05/27/2003)
3.16.100 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 therefore, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within two (2) 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 a credit against taxes collected and remitted any amount overpaid 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, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded by the operator to the transient or credited to rent subsequently payable by the transient to the operator.
C. A transient may obtain a refund of taxes overpaid or paid more than once or erroneously or illegally collected or received by the City by filing a claim in the manner provided in subsection A of this section, but only when the tax was paid by the transient directly to the Tax Administrator or when the transient, having paid the tax to the operator, establishes to the satisfaction of the Tax Administrator that the transient has been unable to obtain a refund from the operator who collected the tax.
D. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by submitting evidence satisfactory to the Tax Administrator of the claimant’s entitlement thereto.
(Ord. 1693, Amended, 05/27/2003)
3.16.110 Collection by city.
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 the City in action brought in the name of the City for the recovering of such amount.
(Ord. 1693, Amended, 05/27/2003)
3.16.120 Penalty for violation.
A. Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable therefore by fine or imprisonment, or both. In the event any civil suit or action is brought by City to enforce the provisions of this chapter, the person responsible for such violation shall be liable to City for City’s costs of suit, including, but not limited to, City’s attorney fees, expert fees, administrative costs, and other costs of enforcement and suit.
(Ord. 1769, Amended, 09/12/2006)
B. Any operator or other person who fails or refuses to register as required in this chapter or to furnish any return required to be made or who fails or refuses to furnish a supplemental return or other data required by the Tax Administrator or who renders a false or fraudulent return or claim is guilty of a misdemeanor and is punishable as set forth in this section. 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 to be made by this chapter, is guilty of a misdemeanor and is punishable as set forth in this section.
(Ord. 1693, Amended, 05/27/2003; Ord. 1645, Amended, 11/23/2000)