Chapter 5.50
TRANSIENT OCCUPANCY TAX
Sections:
5.50.080 Reporting, remitting.
5.50.090 Penalties and interest.
5.50.100 Failure to collect and report tax--Determination of tax by finance director.
5.50.110 Liability of successor for failure to withhold--Notice of amount due.
5.50.120 Duty of successor of operator.
5.50.180 Severability and amendment.
5.50.010 Title and authority.
This chapter shall be known as the “transient occupancy tax ordinance” and is adopted pursuant to the authority contained in Revenue and Taxation Code Section 7280 et seq. If there is any conflict between this chapter and state law, state law shall prevail. (Ord. 22-04 §1, 2022).
5.50.020 Purpose.
The purpose of the transient occupancy tax ordinance is to levy a tax on the privilege of occupying a room or rooms in a hotel, inn, tourist home or house, motel or other lodging for less than thirty days except as provided in this chapter. (Ord. 22-04 §1, 2022).
5.50.030 Definitions.
Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:
A. “Director of finance” means the director of finance for the city of Kerman or his or her designee.
B. “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.
C. “Guest of owner” means a person who does either of the following:
1. Occupies real property accompanied by the owner of either of the following: a timeshare estate in real property or a camping site in a campground pursuant to a right or license under a membership camping contract.
2. Exercises that owner’s right of occupancy without payment of any compensation to owner.
D. “Hotel” means a room or rooms, or other living space, in a hotel, inn, tourist home or house, motel, or other lodging. The term “other lodging” includes space at a recreational vehicle park or other recreational vehicle site but does not include the following:
1. Any facilities operated by a state or local government entity.
2. Any lodging excluded by subsection B of this section.
E. “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.
F. “Operator” means the person who is the proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other capacity. Where the operator performs functions through 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 the principal. Compliance with this chapter by either the principal or the managing agent, however, shall be considered compliance by both.
G. “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.
H. “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 days or less, counting portions of calendar days as full days. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this chapter may be considered. (Ord. 22-04 §1, 2022).
5.50.040 Tax imposed.
For the privilege of occupancy in a hotel in the city of Kerman, unless the occupancy is for a period of more than thirty days, each transient is subject to and shall pay a tax in the amount of ten percent of the rent charged by the operator. Said 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 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 ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the finance director may require that such tax shall be paid directly to the city finance department. (Ord. 22-04 §1, 2022).
5.50.050 Exemptions.
No tax shall be imposed upon: (A) 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) any officer or employee of the federal or state government when on official business; or (C) any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
No exemption 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 finance director. The transient shall be required to provide the necessary proof of exemption. Governments and governmental agencies are generally not exempt from taxation. A copy of eligible exemption claims shall be submitted monthly at the same time as the required tax return reporting. (Ord. 22-04 §1, 2022).
5.50.060 Operator’s duties.
Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax of any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided. (Ord. 22-04 §1, 2022).
5.50.070 Registration.
Within thirty days after commencing business, each operator of any hotel as defined in this chapter renting occupancy to transients shall register said hotel with the finance director and obtain a “transient occupancy registration certificate” to be at all times posted in a conspicuous place on the premises. (Ord. 22-04 §1, 2022).
5.50.080 Reporting, remitting.
On or before the tenth day of each calendar month, each operator shall make a return to the city declaring the total rents charged and received and the amount of tax collected for transient occupancies for the month next proceeding the previous month. At the time the return is filed, the full amount of the tax collected shall be remitted to the city. The finance director may establish shorter reporting periods for any certificate holder if deemed necessary in order to insure collection of the tax which 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. (Ord. 22-04 §1, 2022).
5.50.090 Penalties and interest.
A. Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten percent of the amount of the tax in addition to the amount of the tax. 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 for the recovery of such amount.
B. Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty 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 finance director determines that the nonpayment of remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections A and B of this section.
D. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one percent per month or fraction thereof on the amount of the tax from the date on which the remittance first became delinquent until paid.
E. Penalties, Interest Merged With Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be paid. (Ord. 22-04 §1, 2022).
5.50.100 Failure to collect and report tax--Determination of tax by finance director.
A. Assessment. If any operator shall fail or refuse to collect said tax and to make, within the time provided in this chapter, any report and remittance of said tax or any portion thereof required by this chapter, the finance director shall proceed in such manner deemed best to obtain facts and information on which to base the estimate of the tax due. As soon as the finance director shall procure 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 make such report and remittances, the finance director shall proceed to determine and assess against such operator the tax, interest and penalties provided by this chapter.
B. Notice of Assessment--Hearing--Determination of Tax. The finance director 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 the last known address. Such operator may within ten days after the serving of mailing of such notice make application in writing to the finance director for a hearing on the amount assessed. If application by the operator for the hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the finance director shall be final and conclusive and immediately due and payable. If such application is made, the finance director 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 finance director 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 within fifteen days unless an appeal is taken as provided in Section 5.50.130. (Ord. 22-04 §1, 2022).
5.50.110 Liability of successor for failure to withhold--Notice of amount due.
If the successor to the business fails to withhold a portion of the purchase price for payment of the tax owing as of the close of escrow for the transfer of ownership of any hotel, said successor shall be liable to the city for the payment of the amount owing at the close of escrow. Within thirty days after receiving written request from the successor for a tax clearance certificate stating that no tax or penalty is due, the finance director shall either issue the certificate or mail notice to the successor at its address as it appears on the records of the finance director of the estimated amount of the tax and penalty that must be paid as a condition of issuing the certificate. (Ord. 22-04 §1, 2022).
5.50.120 Duty of successor of operator.
If an operator who is liable for any tax or penalties under this chapter sells or otherwise disposes of his/her business, his/her successor shall notify the finance director of the date of the sale at least thirty days before the date of sale, or if the decision to sell was made less than thirty days prior to the actual sale, then immediately and shall withhold a sufficient portion of the purchase price to equal the amount of such tax or penalty until the selling operator produces a receipt from the collector showing that the tax or penalty has been paid or a tax clearance certificate from the finance director stating that no tax or penalty is due. If the seller does not present a receipt or tax clearance certificate within thirty days after such successor commences to conduct business, the successor shall deposit the withheld amount with the finance director pending settlement of the account of the seller. (Ord. 22-04 §1, 2022).
5.50.130 Appeal.
Any operator aggrieved by any decision of the finance director with respect to the amount of such tax, interest and penalties, if any, may appeal to the city council by filing a notice of appeal with the finance director within fifteen 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 the last known place of address. The findings of the council shall be final and conclusive and shall be served upon the appellant in the manner 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. (Ord. 22-04 §1, 2022).
5.50.140 Records.
It shall be the duty of every operator liable for the collection and payment to the city of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as the operator may have been liable for the collection of said payment to the city, which records the collector shall have the right to inspect at all reasonable times. (Ord. 22-04 §1, 2022).
5.50.150 Refunds.
A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this chapter it may be refunded as provided in subsections B and C of this section provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the city clerk within three years of the date of payment. The claim shall be on forms furnished by the city clerk.
B. An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established in a manner prescribed by the finance director that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the transient or credited to rent subsequently payable by the transient to the operator.
C. A transient may obtain a refund of taxes overpaid or paid more than once or erroneously or illegally collected or received by the city by filing a claim in the manner provided in subsection A of this section, but only when the tax was paid by the transient directly to the city or when the transient, having paid the tax to the operator, established to the satisfaction of the finance director 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 written records showing entitlement. (Ord. 22-04 §1, 2022).
5.50.160 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 Kerman for the recovery of such amount. (Ord. 22-04 §1, 2022).
5.50.170 Violation--Penalty.
Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor. Any operator or other person who fails or refuses to register as required herein, or to furnish any return required to be made, or who fails to or refuses to furnish a supplemental return or other data required by the finance director, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor. Any person required to make, render, sign or verify any report or claim who makes any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due required by this chapter to be made is guilty of a misdemeanor. (Ord. 22-04 §1, 2022).
5.50.180 Severability and amendment.
If any section, subsection, subdivision, paragraph, clause or phrase in this chapter, or any part thereof, is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining sections or portions of this chapter or any part thereof. The city council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases may be declared invalid or unconstitutional.
The city council shall have the power to amend any provision of this chapter by vote of four-fifths of its members, excepting that an amendment increasing the rate of the tax or expanding the class of those subject to the tax shall require the approval of a majority of the electorate. (Ord. 22-04 §1, 2022).