Chapter 3.10
CARDROOM TAX

Sections:

3.10.010    Purpose and intent.

3.10.020    Definitions.

3.10.030    Tax imposed.

3.10.040    Monthly return required.

3.10.050    Audit and records.

3.10.060    Payment—Time limits.

3.10.070    Payments and communications made by mail.

3.10.080    When taxes deemed delinquent.

3.10.090    Notice not required by city.

3.10.100    Penalty and interest for delinquency.

3.10.110    Rules and regulations—Apportionment.

3.10.120    Tax deemed debt to city.

3.10.130    Deficiency determinations.

3.10.140    Tax assessment—Nonpayment—Fraud.

3.10.150    Tax assessment—Notice requirements.

3.10.160    Tax assessment—Hearing.

3.10.170    Conviction for chapter violation—Taxes not waived.

3.10.180    Amendment or repeal.

3.10.190    Use of proceeds.

3.10.010 Purpose and intent.

This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation. (Ord. 2013-07 § 1 (part), 2013)

3.10.020 Definitions.

For the purpose of this chapter, the words and phrases used in this chapter shall have the meaning ascribed to them in Title 5 unless they are specifically defined in this chapter or unless the context clearly requires to the contrary:

“Annual gross gaming revenues” shall mean the gross gaming revenues produced each calendar year between January 1st through December 31st. For new cardrooms, the first annual gross gaming revenues shall begin on the date the certificate of occupancy is issued for the cardroom and end on December 31st of the same year.

“City manager” shall mean the city manager of the city of Marina or his or her designee.

“Discontinued, dissolved or otherwise terminated” shall mean the date the cardroom is no longer in operation as described in the business license(s) issued to the cardroom by the city pursuant to Chapter 5.32. The city manager, using all evidence, including evidence provided by the cardroom permittee, shall make the determination as to whether a cardroom has been discontinued, dissolved or otherwise terminated.

“Gross gaming revenues” shall be defined in accordance with the definition of “gross revenue” provided in California Business and Professions Code Section 19805(r) as may be amended from time to time. Gross gaming revenues includes, but is not limited to, revenues received by the permittee from per hand money collected, seat rental fees, and tournament fees. Gross gaming revenues shall not include fees charged to players that are returned to the players as tournament or jackpot bonuses.

“Permittee” means a person or entity issued a cardroom permit under Chapter 5.32.

“Return” means the statement filed pursuant to Section 3.10.040. (Ord. 2013-07 § 1 (part), 2013)

3.10.030 Tax imposed.

In addition to any other tax imposed by this code, there is imposed upon each permittee a tax of five percent of gross gaming revenues earned on or after January 1, 2014. (Ord. 2013-07 § 1 (part), 2013)

3.10.040 Monthly return required.

A.    Before the tenth day following the end of each month, the permittee shall file with the city finance department a statement, under oath, showing the true and correct amount of gross gaming revenues for the preceding month. A signed declaration shall be attached to the statement included therein, which shall be substantially the same form as: “I hereby declare, under penalty of perjury, that the foregoing is true and correct.”

B.    Such statement shall be accompanied by the payment of the correct amount of taxes imposed hereunder due and owing in accordance with the provisions of Section 3.10.030, as applicable. (Ord. 2013-07 § 1 (part), 2013)

3.10.050 Audit and records.

A.    The city shall have the right to audit the matters referred to in any return and to determine the correctness of the figures set forth in such return and the amount payable to the city pursuant to the provisions of Section 3.10.030.

B.    The books, records and accounts of any permittee may be inspected and audited by the city.

C.    Such an inspection and audit may be performed by the city manager of city, city auditor or a qualified accountant or city official who shall be selected by the city manager.

D.    To facilitate such audits, the permittee shall keep complete records of all transactions related to the receipt or disbursement of funds arising out of or related to cardroom operations during the preceding three-year period. All such records shall be made available to the city for audit at the permittee’s place of doing business after reasonable prior notice.

E.    Any failure or refusal of any permittee to make and file any statements as required within the time required, or to pay such sums by way of taxes when the same are due and payable in accordance with the provisions of this chapter, or to permit such inspection of such books, records and accounts of such permittee shall be and constitute full and sufficient grounds for suspension or revocation of any cardroom permit issued to the permittee pursuant to Chapter 5.32.

F.    If an audit shall show that the permittee has understated the amount of gross gaming revenues derived from the cardroom business by more than two percent, permittee shall immediately pay to city the cost of the audit as well as the additional tax. (Ord. 2013-07 § 1 (part), 2013)

3.10.060 Payment—Time limits.

A.    The tax imposed by this chapter shall be due and payable on the tenth day of the month immediately following the month for which the tax is payable.

B.    In the case of a cardroom which is discontinued, dissolved or otherwise terminated before the expiration of a tax period, the due date for any taxes accrued and owing to the city under the provisions of this chapter shall be the date of the discontinuance, dissolvement or termination of the cardroom business. (Ord. 2013-07 § 1 (part), 2013)

3.10.070 Payments and communications made by mail.

A.    Whenever any payment, statement, report, request or other communication received by the city manager is received after the time prescribed by this chapter for the receipt thereof, but is in an envelope bearing a postmark showing that it was mailed prior to the time prescribed in this chapter for the receipt thereof, the city manager may regard such payment, statement, report, request or other communication as having been timely received.

B.    If the due day falls on Saturday, Sunday or a holiday, the due day shall be the next regular business day on which City Hall is open to the public. (Ord. 2013-07 § 1 (part), 2013)

3.10.080 When taxes deemed delinquent.

Unless otherwise specifically provided under other provisions of this chapter, all taxes required to be paid pursuant to this chapter shall be deemed delinquent if not paid on or before the due date specified in Section 3.10.060. (Ord. 2013-07 § 1 (part), 2013)

3.10.090 Notice not required by city.

The city manager is not required to send a delinquency or other notice or bill to any person or entity subject to the provisions of this chapter, and failure to send such notice or bill shall not affect the validity of any tax, interest or penalty due under the provisions of this chapter. (Ord. 2013-07 § 1 (part), 2013)

3.10.100 Penalty and interest for delinquency.

In addition to any other penalties or fines, civil or criminal, any person or entity who fails or refuses to pay any tax required to be paid pursuant to this chapter on or before the due date shall pay, in addition to the tax, penalties and interest as follows:

A.    A penalty equal to ten percent of the amount of the unpaid tax in addition to the amount of the tax, plus interest on the unpaid tax calculated from the due date of the tax at a rate established by resolution of the city council; and

B.    An additional penalty equal to twenty-five percent of the amount of the tax if the unpaid tax remains unpaid for a period exceeding one calendar month beyond the due date, plus interest on the unpaid tax and penalties calculated at the rate established by resolution of the city council.

C.    Penalties provided herein shall not exceed one hundred percent of the tax that was due but not paid in a timely manner. (Ord. 2013-07 § 1 (part), 2013)

3.10.110 Rules and regulations—Apportionment.

For purposes of apportionment of the tax as may be required by law and for purposes of administration and enforcement of this chapter generally, the city manager may from time to time promulgate administrative rules and regulations. (Ord. 2013-07 § 1 (part), 2013)

3.10.120 Tax deemed debt to city.

A.    The amount of any tax, penalties and interest imposed by the provisions of this chapter shall be deemed a debt to the city, and any permittee carrying on any business without having paid the tax under this chapter to the city shall be liable to an action in the name of the city in any court of competent jurisdiction for the amount of the tax, and penalties and interest imposed on such business.

B.    In an action authorized by this section, the prevailing party shall recover court costs, attorney’s fees, personnel costs, and auditor’s fees to be added to the judgment and set by the court. These fees are recoverable at all levels of trial and appeal.

C.    If any amount required to be paid to the city under this chapter is not paid when due, the city manager may within three years after the date on which the tax was required to be paid, file for recording in the office of the Monterey County recorder, or of such counties as the city manager may determine, a certificate of lien which specifies the amount of tax and penalties and interest due and the name and address of the permittee as it appears on the city records. The lien shall also specify that the city manager has complied with all provisions of this chapter in the determination of the amount required to be paid and provide a legal description of the real property owned by the permittee. From the time of the filing for record of the certificate, the amount required to be paid, together with penalties and interest and all amounts coming due thereafter unless paid, constitutes a lien upon all real property owned or thereafter acquired by the permittee before the tax lien expires. The tax lien has the force, effect, and priority of a judgment lien and shall continue for ten years from date of filing of the certificate unless sooner released or otherwise discharged.

D.    The remedies identified herein shall be nonexclusive with respect to any other remedy, whether provided by law, equity or statute that the city may wish to pursue. (Ord. 2013-07 § 1 (part), 2013)

3.10.130 Deficiency determinations.

A.    If the city manager is not satisfied that any statement filed as required under the provisions of this chapter is correct, or that the amount of tax is correctly computed, the city manager may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the statement or upon the basis of any information in the city manager’s possession or that may come into the city manager’s possession.

B.    One or more deficiency determinations of the amount of tax due for a period or periods may be made.

C.    When a person or entity discontinues engaging in a cardroom business, a deficiency determination may be made at any time within three years thereafter as to any liability arising from engaging in such business whether or not a deficiency determination is issued prior to the date the tax would otherwise be due.

D.    Whenever a deficiency determination is made, a notice shall be given to the person or entity concerned in the same manner as notices of assessment are given under Section 3.10.140. (Ord. 2013-07 § 1 (part), 2013)

3.10.140 Tax assessment—Nonpayment—Fraud.

A.    Under any of the following circumstances, the city manager may make and give notice of an assessment of the amount of tax owed by a person or entity under this chapter:

1.    If the person or entity has not filed any statement or return required under the provisions of this chapter;

2.    If the person or entity has not paid any tax due under the provisions of this chapter;

3.    If the person or entity has not, after demand by the city manager, filed a corrected statement or return, or furnished to the city manager adequate substantiation of the information contained in a statement or return already filed, or paid any additional amount of tax due under the provisions of this chapter;

4.    If the city manager determines that the nonpayment of any tax due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto from the date the tax is due in addition to penalties and interest otherwise stated in this chapter.

B.    The notice of assessment shall separately set forth the amount of any tax known or estimated by the city manager to be due, after full consideration of all information within his or her knowledge concerning the cardroom business and activities of the person or entity assessed and shall include the amount of any penalties or interest accrued on each amount to the date of the notice of assessment. (Ord. 2013-07 § 1 (part), 2013)

3.10.150 Tax assessment—Notice requirements.

The notice of assessment shall be served upon the permittee either by handing it to the permittee personally, or by a deposit of the notice in the United States mail, postage prepaid thereon, addressed to the permittee at the address of the location of the business appearing on the face of the permit issued under Title 5 to the permittee or to such other address as he or she shall register with the city manager for the purpose of receiving notices provided under this chapter. For the purposes of this section, a service by mail is complete at the time of deposit in the United States mail. (Ord. 2013-07 § 1 (part), 2013)

3.10.160 Tax assessment—Hearing.

A.    Within ten days after the date of service of the notice of assessment, the person or entity may apply in writing to the city manager for a hearing on the assessment.

B.    If application for a hearing before the city manager is not made within the time herein prescribed, the tax assessed by the city manager shall become final and conclusive.

C.    Within thirty days of the receipt of any such application for hearing, the city manager shall cause the matter to be set for hearing before him or her not later than thirty days after the date of application, unless a later date is agreed to by the city manager and the permittee requesting the hearing.

D.    Notice of such hearing shall be given by the city manager to the permittee requesting such hearing not later than ten days prior to such hearing. At such hearing said permittee may appear and offer evidence why the assessment as made by the city manager should not be confirmed and fixed as a tax.

E.    After such hearing the city manager shall determine and reassess the proper tax to be charged and shall give written notice thereof to the permittee in the manner prescribed in Section 3.10.150 for giving notice of assessment. (Ord. 2013-07 § 1 (part), 2013)

3.10.170 Conviction for chapter violation—Taxes not waived.

A.    The conviction and punishment of any person or entity for failure to pay the required tax shall not excuse or exempt such person or entity from any civil action for the tax debt unpaid at the time of such conviction.

B.    No civil action shall prevent a criminal prosecution for any violation of the provisions of this chapter or of any state law requiring the payment of all taxes. (Ord. 2013-07 § 1 (part), 2013)

3.10.180 Amendment or repeal.

This chapter may be repealed or amended by the city council without a vote of the people. However, as required by Article XIIIC of the California Constitution, voter approval is required for any amendment provision that would increase the rate of any tax levied pursuant to this chapter. The people of the city of Marina affirm that the following actions shall not constitute an increase of the rate of a tax:

A.    The restoration of the rate of the tax to a rate that is no higher than that set by this section, if the city council has acted to reduce the rate of the tax;

B.    An action that interprets or clarifies the methodology of the tax, or any definition applicable to the tax, so long as interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the language of this section;

C.    The establishment of a class of persons or entities that are exempt or excepted from the tax or the discontinuation of any such exemption or exception (other than the discontinuation of an exemption or exception specifically set forth in this section); or

D.    The collection of the tax imposed by this section, even if the city had, for some period of time, failed to collect the tax. (Ord. 2013-07 § 1 (part), 2013)

3.10.190 Use of proceeds.

Proceeds of the tax imposed by this chapter shall be deposited in the general fund of the city and be available for any municipal purpose. (Ord. 2013-07 § 1 (part), 2013)