Chapter 3.40
TRANSIENT OCCUPANCY TAX*

Sections:

3.40.010    Title.

3.40.020    Definitions.

3.40.030    Imposition – Rate – Payment – Annual abatement.

3.40.040    Exemptions.

3.40.050    Operator – Collection duties generally.

3.40.060    Operator – Registration and certificate required – Contents – Posting.

3.40.070    Operator – Returns, reports and payments required when.

3.40.080    Delinquent remittance, fraud or audit deficiency – Penalties designated.

3.40.090    Failure to collect or report tax – Determination procedure – Notice.

3.40.100    Failure to collect or report tax – Public hearing when – Procedure.

3.40.110    Appeal procedure.

3.40.120    Operator – Record keeping duty.

3.40.130    Refunds.

3.40.140    Actions to collect.

3.40.150    Finance director regulation prescription authority.

3.40.160    Successor to business – Duty to withhold tax.

3.40.170    Successor to business – Liability for failure to withhold – Duration of liability.

3.40.180    Disposition of revenues – Utilization.

3.40.190    Violation deemed misdemeanor – Penalty.

*    For statutory provisions authorizing cities to impose a tax on transients who occupy room space within the city, see Rev. and Tax. Code §§ 7280 and 7281.

3.40.010 Title.

This chapter shall be known as the “transient occupancy tax ordinance of the city of Chula Vista.” (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.301).

3.40.020 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, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes and is held out as such to the public. “Hotel” does not mean any hospital, convalescent home or sanitarium;

B. “Campsite” means any area which is occupied or intended or designed or improved for occupancy by transients utilizing recreational vehicles, motor homes, or mobile trailers for dwelling, lodging or sleeping purposes and is held out as such to the public. “Campsite” does not include any mobile home park;

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. “Operator” means the person who is proprietor of the hotel, or manager of the campsite, 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;

E. “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;

F. “Rent” means the consideration charged for the occupancy of space in a hotel or campsite 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;

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 30 consecutive calendar days or less, counting portions of calendar days as full days. Any person who in fact exercises occupancy or is in fact entitled to occupancy for a period of 31 days or more, counting portions of calendar days as full days, shall be deemed not to have been a transient with respect to the first 30 days of occupancy or entitlement to occupancy. (Ord. 1804 § 1, 1978; Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.302).

3.40.030 Imposition – Rate – Payment – Annual abatement.

A. For the privilege of occupancy in any hotel or campsite, each transient is subject to and shall pay a tax in the amount of 10 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 or campsite 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 or campsite. If for any reason the tax due is not paid to the operator of the hotel or campsite, the director of finance may require that such tax shall be paid directly to the director of finance of the city.

B. Notwithstanding anything else to the contrary in this section contained, the city council is hereby authorized, but is not required, to lower the tax, or the rate of tax imposed under the authority of this chapter, but to no less than what the tax would be at a rate of eight percent, for no more than one calendar year, if within three months prior to the commencement of a given calendar year, it conducts a public hearing at which it publicly deliberates on the advisability of doing so, notice of which public hearing is published in a newspaper of general circulation at least twice, not sooner than 20 days and not later than five days prior thereto, of its intent to deliberate upon said matter. Failure to publish notice of the public hearing, as herein required, shall not affect the right of the city council to conduct the public hearing and to abate all or any portion of the tax herein imposed. (Ord. 2407 § 1, 1990; Ord. 1804 § 1, 1978; Ord. 1471 §§ 1, 2, 1973; Ord. 1339 § 1, 1971; Ord. 1159 § 1, 1958; Ord. 986 § 1, 1966; prior code § 7.303).

3.40.040 Exemptions.

Except as may be otherwise provided by law, there shall be no exemption from the imposition of this tax for federal, state or local officers and employees traveling on official business; provided further, that this tax shall not be imposed for any accommodations where the rental thereof is at the rate of $5.00 a day or less. (Ord. 1804 § 1, 1978; Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.304).

3.40.050 Operator – Collection duties generally.

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. (Ord. 1804 § 1, 1978; Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.305).

3.40.060 Operator – Registration and certificate required – Contents – Posting.

Within 30 days after July 23, 1971, or within 30 days after commencing business, whichever is later, each operator of any hotel or campsite renting occupancy to transients shall register said hotel or campsite with the director of finance and obtain from him a “transient occupancy registration certificate” to be at all times posted in a conspicuous place on the premises. Said certificate shall, among other things, state the following:

A. The name of the operator;

B. The address of the hotel or campsite;

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 the Transient Occupancy Tax Ordinance by registering with the director of finance for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the director of finance. 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.” (Ord. 1804 § 1, 1978; Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.306).

3.40.070 Operator – Returns, reports and payments required when.

A. Each operator shall, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the director of finance, make a return to the director of finance, 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 tax collected shall be remitted to the director of finance. The director of finance may establish shorter reporting periods for any certificate holder if he deems it necessary in order to insure collection of the tax, and he may require further information in the return. Returns filed or taxes remitted and actually received by the director of finance on or before the last day of the month following the close of each calendar quarter shall be deemed timely filed or remitted. Returns filed or taxes remitted by mail shall be deemed timely filed only if the envelope or similar container enclosing the returns or taxes is addressed to the director of finance, has sufficient postage and bears a United States postmark or a postage meter imprint prior to midnight on the last day for reporting or remitting without penalty. If such envelope or other container bears a postage meter imprint as well as a United States post office cancellation mark, the latter shall govern in determining whether the filing or remittance is timely.

B. 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 director of finance. All returns and payments submitted by each operator shall be treated as confidential by the director of finance and shall not be released by him except upon order of a court of competent jurisdiction or to an officer or agent of the United States, the state of California, the county of San Diego, or the city, for official use only. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.307).

3.40.080 Delinquent remittance, fraud or audit deficiency – Penalties designated.

A. Original Delinquency. 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.

B. Continued Delinquency. Any operator who fails to remit any delinquent remittance within 30 days following the date on which the remittance first became delinquent shall pay a second delinquent penalty of 10 percent of the amount of the tax and the 10 percent penalty first imposed; provided, that the director of finance has notified, by certified or registered United States mail, the operator of the delinquency and the 10 percent penalty first imposed, such notification to be given within the 30-day period of the initial delinquency; and provided, that the operator has not paid the tax and penalty due within 14 days after notification or within the 30-day period of the initial delinquency, whichever is later.

C. Fraud. If the director of finance 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 subsections (A) and (B) of this section.

D. Audit Deficiency. If, upon audit by the city, an operator is found to be deficient in his return or his remittance or both, the director of finance shall immediately notify the operator of the net deficiency and the original 10 percent delinquency penalty. If the operator fails or refuses to pay the deficient amount and applicable penalties within 14 days after the date of the director of finance’s notice, the penalties prescribed in subsection (B) of this section shall apply, using the fifteenth day after the date of the director of finance’s notice as the date when the continued delinquency penalty first applies. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.308).

3.40.090 Failure to collect or report tax – Determination procedure – Notice.

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 said tax or any portion thereof required by this chapter, the director of finance 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 director of finance procures 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 same and to make such report and remittance, he shall proceed to determine and assess against such operator the tax and penalties provided for by this chapter. In case such determination is made, the director of finance shall give 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. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.309(1)).

3.40.100 Failure to collect or report tax – Public hearing when – Procedure.

The operator described in CVMC 3.40.090 may, within 10 days after the serving or mailing of such notice, make application in writing to the director of finance for a hearing on the amount assessed. If application by the operator for a hearing is not made within the time prescribed, the tax and penalties, if any, determined by the director of finance shall become final and conclusive and immediately due and payable. If such application is made, the director of finance 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 the amount specified therein should not be fixed for such tax and penalties. At such hearing, the operator may appear and offer evidence why such specified tax and penalties should not be so fixed. After such hearing, the director of finance 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 and penalties. The amount determined to be due shall be payable after 15 days, unless an appeal is taken as provided in CVMC 3.40.110. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.309(2)).

3.40.110 Appeal procedure.

Any operator aggrieved by any decision of the director of finance with respect to the amount of such tax 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 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. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.310).

3.40.120 Operator – Record keeping duty.

It is 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 director of finance shall have the right to inspect at all reasonable times. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.311).

3.40.130 Refunds.

A. Whenever the amount of any tax 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 subsection (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 director of finance within three years of the date of payment. The claim shall be on forms furnished by the director of finance.

B. An operator may claim a refund or take a credit against taxes collected and remitted of the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the director of finance 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 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 director of finance, or when the transient, having paid the tax to the operator, establishes to the satisfaction of the director of finance that the transient has been unable to obtain a refund from the operator who collected the tax.

D. An operator who has remitted an amount in excess of the amount required to be paid by this chapter may receive a credit to the extent of the excess. If the excess is discovered as a result of an audit by the city, no claim need be filed by the operator. Such credit, if approved by the director of finance, shall be applied to any deficiency found or any further tax payments due under the rules prescribed by the Director of Finance.

E. No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.312).

3.40.140 Actions to collect.

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed to be 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. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.313).

3.40.150 Finance Director regulation prescription authority.

The Director of Finance may prescribe reasonable regulations to implement the provisions of this chapter. Such regulations shall become effective upon approval by the City Council. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; prior code § 7.314).

3.40.160 Successor to business – Duty to withhold tax.

If any operator who is liable for any tax or penalty under this chapter sells or otherwise disposes of his business, his successor 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 Director of Finance showing that the tax or penalty has been paid or a certificate from the director of finance stating that no tax or penalty is due. If the seller does not present a receipt or certificate within 30 days after such successor commences to conduct business, the successor shall deposit the withheld amount with the Director of Finance, pending settlement of the account of the seller. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; prior code § 7.315).

3.40.170 Successor to business – Liability for failure to withhold – Duration of liability.

If the successor to the business fails to withhold a portion of the purchase price as required, he shall be liable for the payment of the amount required to be withheld. Within 30 days after receiving a written request from the successor for a certificate, the Director of Finance shall either issue the certificate or mail notice to the successor at his address, as it appears on the records of the Director of Finance, of the estimated amount of the tax and penalty that must be paid as a condition of issuing the certificate. The time period within which the obligation of a successor may be enforced shall commence at the time the operator sells or otherwise disposes of his business or at the time that the determination against the operator becomes final, whichever event occurs later, and shall expire, in the absence of fraud, three years thereafter. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; prior code § 7.316).

3.40.180 Disposition of revenues – Utilization.

All revenues collected by the City under this chapter and remaining after payment of the costs incurred in the administration of this chapter shall be deposited in the general fund and the Council may, from time to time, by resolution, specifically designate the purpose for which these revenues may be utilized. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.318).

3.40.190 Violation deemed misdemeanor – Penalty.

Any person violating any of the provisions of this chapter is guilty of a misdemeanor and shall be punishable therefor by a fine of not more than $500.00 or by imprisonment in the county jail for a period of not more than six months or by both such fine and imprisonment. 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 or refuses to furnish a supplemental return or other data required by the Director of Finance, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, and is punishable as aforesaid. Any person required to make, render, sign or verify any report or claim who makes a 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 and is punishable as aforesaid. (Ord. 1471 § 1, 1973; Ord. 1339 § 1, 1971; Ord. 986 § 1, 1966; prior code § 7.317).