Chapter 3.36 ADMISSION TAX*

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** Editor’s Note: Ordinance No. 86-44 superseded Ordinance No. 86-25 in entirety.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:

3.36.010 Definitions.

3.36.020 Tax imposed.

3.36.030 Operator’s duties.

3.36.040 Exemptions.

3.36.050 Registration.

3.36.060 Contents of certificate.

3.36.070 Term of certificate.

3.36.080 Renewal of certificate.

3.36.090 Nontransferability.

3.36.100 Reporting and remitting.

3.36.110 Collection security.

3.36.120 Penalties and interest.

3.36.130 Failure to collect.

3.36.140 Deficiency determination.

3.36.150 Offsetting of overpayment.

3.36.160 Notice of determination.

3.36.170 Hearing.

3.36.180 Appeal.

3.36.190 Records.

3.36.200 Refunds.

3.36.210 Actions to collect.

3.36.220 Repealed by Ord. 90-04 § 2.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.

Each operator shall collect the tax imposed by this chapter from any patron when he or she 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 paid to the director as hereinafter provided.

(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 hereto, as will enable the director to determine whether the charge for which the exemption is sought is eligible therefor.

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 registration or participation in educational events or activities held or conducted by established public or private schools which operate and maintain fixed facilities devoted to educational purposes;

(5) 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 any public or private high school or college.

(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 collection 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. 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 collection 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. 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) Permits issued to fixed operators shall be valid for one year, and may be renewed annually thereafter.

(2) Permits 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. 90-04 § 1 (part), 1990: Ord. 86-44 § 1 (part), 1986).

3.36.080 RENEWAL OF CERTIFICATE.

The director shall issue or renew a certificate under this chapter except 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. 86-44 § 1 (part), 1986).

3.36.090 NONTRANSFERABILITY.

No admission tax collection certificate may be transferred or assigned.

(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 within fifteen days.

(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.

(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.

(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.

(b) Natural Disaster. If the director finds that an operator’s failure to make a timely return or payment is due to disaster, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, the director may waive the interest provided by subsection (3) above. Any person seeking to be relieved of the interest shall file with the director a statement under penalty of perjury setting forth the facts upon which the claim for relief is based.

(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. 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 penalties, and against interest on underpayments. Interest on overpayments (for purposes of offsetting as in this section provided) and underpayments shall be computed in the manner set forth in Section 3.36.100, subsection (2).

(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 fifteen 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. Any operator against whom interest or penalties have been assessed pursuant to Section 3.36.120 may make an application in writing for a hearing with the director to review the amounts of tax owing and accrued penalties and interest thereon within thirty days after notice of delinquency. If such application is made, the director shall give not less than five days’ written notice in the manner prescribed by Section 3.36.140 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 3.36.140. 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. 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.

Every operator liable for the collection and payment to the city of any tax imposed by this chapter shall keep and preserve 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. 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 patron under the provisions of this chapter shall be deemed a debt owed by the patron 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.

(Ord. 86-44 § 1 (part), 1986).