Chapter 16.12
TRANSIENT OCCUPANCY TAX

Sections:

16.12.010    Purpose and intent.

16.12.020    Definitions.

16.12.030    Imposition.

16.12.040    Exemptions.

16.12.050    Operator’s duties.

16.12.060    Registration.

16.12.070    Reporting and remitting.

16.12.075    Suspension of operator’s obligation.

16.12.080    Original delinquency.

16.12.090    Continued delinquency.

16.12.100    Fraud.

16.12.110    Interest.

16.12.120    Penalties merged with tax.

16.12.130    Penalties during pendency of hearing or appeal.

16.12.140    Collection.

16.12.150    Appeal.

16.12.160    Records.

16.12.170    Refunds.

16.12.180    Claims.

16.12.190    Refunds to transient.

16.12.200    Actions to collect.

16.12.210    Disposition of revenues.

16.12.220    Deduction as compensation for accounting.

16.12.230    Penalty for violations.

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It is the purpose and intent of the City Council that there be imposed on transient occupants of hotel rooms in the City a tax, the proceeds of which may, at the discretion of the City Council, be used for promotional, cultural, beautification or recreational purposes, including but not limited to capital improvements. (Ord. 1794; Ord. 1330)

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. “Hotel” does not mean any hospital, convalescent home or sanitarium.

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 occupancy by reason of concession, permit, right of access, license or other agreement for a period of 25 consecutive 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 25 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, 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. (Ord. 1630)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 10 percent of the rent owed by the transient to the City, which is extinguished only by payment 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 City Treasurer may require that such tax shall be paid directly to the City Treasurer. (Ord. 2034 § 1, 2012; Ord. 1844; Ord. 1630; Ord. 1330)

No tax shall be imposed:

A. Upon any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided.

B. Upon any Federal or State of California officer or employee when on official business.

C. Upon any officer or employee of a foreign government who is exempt by reason of express provision of Federal law or international treaty.

D. Where the rent is at the rate of $2.00 a day or less.

No exemption claimed under subsection A, B, or C of this section shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the City Treasurer. All claims of exemption under subsection D of this section shall be made in the manner prescribed by the City Treasurer.

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.

Within 30 days after commencing business, each operator of any hotel renting occupancy to transients shall register such hotel with the City Treasurer and obtain from him a “transient occupancy registration certificate” to be at all times posted in a conspicuous place on the premises. The 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 this Division by registering with the City Treasurer for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the City Treasurer. This certificate does not constitute a permit.”

Each operator shall, on or before the last day of the month, or at the close of any shorter reporting period which may be established by the City Treasurer, make a return to the City Treasurer, on forms provided by him, of the total rents charged and received and the amount of tax collected for transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the City Treasurer. The City Treasurer may establish shorter reporting periods for any certificate holder if he deems it necessary in order to ensure collection of the tax and he may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment thereof is made to the City Treasurer. All returns and payments submitted by the City Treasurer shall be treated as confidential and shall not be released by him except upon order of a court of competent jurisdiction or to any officer or agent of the United States or the State of California. (Ord. 1557)

A. If, after due diligence, the operator is unable to collect the tax from the transient, the operator’s obligation to collect and remit the tax due from the transient is suspended until collection can be reasonably accomplished.

B. Any moneys received by the operator from the transient shall first be applied to the tax due under this chapter.

C. In order to obtain the suspension of obligations created in this section, the operator shall submit to the City, in writing, the transient’s name, address and any other information about the transient in the possession of the operator. In addition, the operator shall describe the due diligence exercised by the operator to obtain the tax due under this chapter. (Ord. 1630)

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.

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 tax and the 10 percent penalty first imposed.

If the City Treasurer 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 CMC 16.12.080 and 16.12.090.

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 of which the remittance first became delinquent until paid.

Every penalty imposed and such interest as accrues under the provisions of this chapter shall become a part of the tax herein required to be paid.

No penalty provided under the terms of this chapter shall be imposed during the pendency of any hearing which is provided for in CMC 16.12.140 nor during the pendency of any appeal to the City Council which is provided for in CMC 16.12.150.

If any operator shall fail or refuse to collect the tax and to make, within the time provided in this chapter, any report and remittance of such tax or any portion therefor required by this chapter, the City Treasurer shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the City Treasurer shall procure such facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the City Treasurer 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 City Treasurer 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 City Treasurer shall become final and conclusive and immediately due and payable. If such application is made, the City Treasurer 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. 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 City Treasurer shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in CMC 16.12.150.

Any operator aggrieved by any decision of the City Treasurer 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 last known place of address. The findings of the Council shall be final and conclusive and shall be served upon the appellant in the matter prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

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 City Treasurer shall have the right to inspect at all reasonable times.

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 CMC 16.12.180 and 16.12.190, provided a claim in writing therefor, stating under penalty of perjury the specific ground upon which the claim is founded, is filed with the City Treasurer within three years of the date of payment. The claim shall be on forms furnished by the City Treasurer.

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 City Treasurer 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.

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 CMC 16.12.170, but only when the tax was paid by the transient directly to the City Treasurer, or when the transient having paid the tax to the operator establishes to the satisfaction of the City Treasurer that the transient has been unable to obtain a refund from the operator who collected the tax.

No refund shall be paid under the provisions of this chapter unless the claimant establishes his right thereto by written records showing entitlement thereto.

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed 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 Coronado for the recovery of such amount.

Revenues collected by the City under this chapter and remaining after payment of the annual costs incurred in the administration and enforcement thereof may at the discretion of the City Council be used, in whole or in part, for any purpose including but not limited to promotional, cultural, beautification, recreational, capital improvements, or may be deposited into the general fund. (Ord. 1370)

For the purpose of compensating the operator in accounting for and remitting the tax levied by this chapter, each operator shall be allowed two percent of the amount of tax due and accounted for and remitted to the City Treasurer in the form of a deduction in submitting his report and paying the amount due to him, provided the amount due was not delinquent at the time of payment.

A. Any person who fails to pay a tax imposed pursuant to the provisions of this chapter shall be guilty of an infraction.

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 City Treasurer, or who renders a false or fraudulent return of claim, is guilty of an infraction.

C. Any person required to make, render, sign or verify any report or claim with intent to defeat or evade the determination of any amount due that is required by this chapter to be made, is guilty of an infraction. (Ord. 1400)