Chapter 8.48
HOTEL-MOTEL ROOM TAX1 Revised 4/18 Revised 8/18

Sections:

8.48.010    Definitions.

8.48.020    Tax levy.

8.48.030    Operators exempt from room tax collection.

8.48.040    Other room tax exemptions.

8.48.050    Registration for tax collection.

8.48.060    Reporting basis and tax collection. Revised 4/18

8.48.070    Prohibited acts and penalties. Revised 4/18 Revised 8/18

8.48.080    Procedures and forms.

8.48.090    Tax reporting requirements.

8.48.100    Penalties, estimated taxes, administrative fees and interest. Revised 8/18

8.48.110    Recovery of taxes.

8.48.120    Administrative procedures and appeal.

8.48.130    Refund of room tax.

8.48.140    Record keeping.

8.48.150    Confidentiality.

8.48.160    Severability.

8.48.170    Prospective application only.

8.48.010 Definitions.

For the purposes of this chapter, the following words and phrases have the following meanings:

Director” means the chief financial officer or his/her designee;

Guest” or “renter” means an individual, firm, partnership, joint venture, club, fraternal organization, association, corporation, estate, trust, receiver, or any other entity or group who pays rent for a room for a term of less than 30 consecutive days.

Room” means any structure or portion of a structure, permanent or temporary, fixed or mobile, in which a person, for money or other consideration, may obtain lodging, dwelling, or sleeping accommodations. This term includes hotels, apartment hotels, motels, tourist homes, houses or courts, lodging houses, inns, rooming-houses, hostels, trailers, bed and breakfasts, dormitories, and any other facility, structure, or room of whatever name where space for lodging, dwelling, or sleeping may be secured for consideration. “Room” does not include any hospital, self-contained and powered motor home, tent or tent space, medical clinic, sanitarium, or nursing home; any student dormitory operated by the University of Alaska; or any temporary lodging within a military reservation when that lodging is operated by the United States.

Operator” means a person who furnishes, offers for rent, or otherwise makes available a room, whether acting directly or through an agent or employee.

Permanent resident” means any occupant who has or shall have the right of occupancy of any room or rooms for at least 30 consecutive days.

Rent” means the consideration, whether received in money or otherwise, charged for occupancy of a room and any equipment, like but not limited to rollaway beds and cribs including all receipts, cash, credits, and property or services of any kind or nature.

Tax” means the room tax as levied under this chapter. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.010.)

8.48.020 Tax levy.

A. There is hereby levied a tax on the use and privilege of renting a room within the borough equal to eight percent of the daily rent charged for each room rented for each 24-hour period, or any portion of that period. This tax is imposed upon all room rentals unless the rental is specifically exempted herein or by other applicable law. The tax is not imposed upon a permanent resident of a room.

B. It is the purpose and intent of the tax levied under this chapter to raise revenues. To that end, the scope of the tax levied shall be broadly interpreted and exemptions shall be allowed only when the room rental clearly falls within an exemption defined in this chapter. The burden of proving an exemption is on the person claiming the exemption.

C. All taxes imposed by this chapter are due and payable at the time of rental and are delinquent if not paid when due.

D. The obligation for the payment of the room tax is upon the guest. Every operator providing rentals taxable under this chapter shall collect the taxes imposed by this chapter from the guest at the time of rental and shall transmit the same to the Fairbanks North Star Borough in accordance with the reporting requirements in this chapter. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.020.)

8.48.030 Operators exempt from room tax collection.

The following operators are exempt from the collection of the room tax:

A. An operator who is exempt from federal income taxation under 26 USC 501(c)(3), and whose income from room rentals is not an unrelated business taxable income under 26 USC 512, is exempt from collecting the tax levied by this chapter. This exemption, however, is not effective until the operator registers with the borough as required by this chapter and presents evidence satisfactory to the director that the operator meets the standards required for this exemption.

B. Operators located within the cities of Fairbanks and North Pole, subject to the following limitations:

1. The borough does not intend to act as a collecting agent for room taxes imposed by the city.

2. If the city imposes a room tax that exceeds that imposed by the borough, the operator is not entitled to a refund from the borough.

3. If the city imposes a room tax less than the borough’s, operators in the city shall collect the borough room tax imposed by this chapter and remit the taxes to the borough. The borough will then remit to the city its portion of the tax. (Ord. 2009-18 § 2, 2009; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.030.)

8.48.040 Other room tax exemptions.

The following rents are exempt from the room tax levied in this chapter:

A. Rent paid directly to the operator using a purchase order or other means of direct payment by a federal, state, or local government. Government employees traveling on a reimbursement basis are not exempt from taxation and shall be charged the eight percent tax.

B. Rent paid by a foreign government which is exempt from taxation by law or by treaty on behalf of a guest who is an officer or employee of the foreign government.

C. Rentals by religious and charitable organizations as defined in subsections 501(c)(1), (3), or (4) of the Internal Revenue Code that are rented for the conduct of regular religious or charitable functions and activities and not for the support or maintenance of the general membership or for communal living. Applications for this exemption must include an exemption certificate issued by the Internal Revenue Service.

D. Rent paid by a permanent resident as defined in this chapter.

E. Rent paid directly by an employer for a room to be used or occupied by his employee or employees on a rotating basis for 90 consecutive days or more at the operator’s registered place of business. (Ord. 2010-15 § 2, 2010; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.035.)

8.48.050 Registration for tax collection.

A. It is unlawful to engage in business as an operator without obtaining a certificate of registration under this section. An operator shall display its certificate of registration prominently at its place of business.

B. An operator shall obtain a certificate of registration issued by the director before engaging in room rentals. An operator must apply to the director for a certificate of registration on a form prescribed by the director. A current valid business license shall be a prerequisite to receiving a certificate of registration.

C. A certificate of registration shall bear the name of the operator, the address of the registered place of business, and the operator’s form of business organization.

D. The certificate of registration is not assignable and nontransferable. The operator shall promptly surrender the certificate to the director when the operator ceases to do business at the location named on the certificate. An operator shall submit a new or updated application for other changes, such as business name changes, owner/operator changes, change in business organization, and/or primary contact person. The director, after receipt of the application, will determine whether a new certificate of registration shall be issued which may bear the same registration number. If the business is continued at the same location but there is a change in its name or form of organization, the operator making such change shall, in addition to submitting a new application, surrender his old certificate to the director.

E. An operator shall not rent a room subject to the tax imposed in this chapter if the operator does not possess a valid certificate of registration. An operator making room rentals subject to this tax without a valid certificate of registration is subject to all penalties provided in this chapter, including, but not limited to, an injunction preventing the operator from engaging in further rental activity until the operator obtains a valid certificate of registration.

F. Failure to comply with any provision of this chapter is a violation punishable by a fine of $1,000. (Ord. 2013-65 § 7, 2013; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.040.)

8.48.060 Reporting basis and tax collection. Revised 4/18

A. The operator shall report and pay the tax on the same basis, cash or accrual, as the operator uses for reporting federal income tax.

B. All operators shall add the tax herein imposed to the room price or charge and shall show the tax as a separate and distinct item; except that, if the tax is included in the price of the room, the operator shall clearly provide the guest with information that the tax is included in the room price.

C. Upon collection by the operator of the taxes imposed herein, title to the collected taxes vests in the borough.

D. It is the duty of every operator engaged or continuing in business in the borough to keep and preserve suitable records of all rentals and such other books or accounts as may be necessary to determine the amount of tax for the collection of which the operator is liable hereunder. It shall be the duty of every such person to keep and preserve all rent invoices for a period of six years from the date filed with the director. All such books and invoices shall be made available to the director for examination upon request.

E. For the purpose of ascertaining the correctness of a report, or for the purposes of determining the amount of tax collected or which should have been collected by any operator, the director may conduct investigations and/or hearings concerning any matters covered by this chapter, and may examine any relevant books, papers, records, or memorandum of any operator, and may require the attendance of an operator or any officer, agent or employee of the operator.

F. Any person acquiring an ownership interest in an ongoing business or the accounts receivable of a business, whether by purchase, assignment, foreclosure, relinquishment, or otherwise, is liable for the payment of taxes, penalties, and interest accruing and unpaid to the borough on account of the operation of the business by the former owner. (Ord. 2018-09 § 2, 2018; Ord. 2014-12 § 5, 2014; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.050.)

8.48.070 Prohibited acts and penalties. Revised 4/18 Revised 8/18

In addition to other acts and omissions prohibited by this chapter:

A. No guest shall fail or refuse to pay the tax when it is due and payable to an operator.

B. No operator shall fail or refuse to make and file the reports required by this chapter.

C. No operator shall advertise or state to the public or to any guest, directly or indirectly, that the tax or any part of it will be assumed or absorbed by the operator, that the tax will not be added to or included in the rental, or that it will be refunded. No operator shall absorb, fail to add, or refund the tax or any part of it.

D. No person shall make any false statement to an operator or to the director which is material in determining whether a rental is taxable under this chapter.

E. No operator shall attribute room revenue to a location or entity that is exempt from reporting under this chapter for the purpose of evading the borough room tax. Violation of this provision may result, in addition to all other penalties imposed in this chapter, in the director’s removal of the reporting exemption from any or all of the operator’s locations, and the imposition of periodic tax reports from any or all of the operator’s locations.

F. Failure to comply with any provision of this chapter is a violation punishable by a fine, not to exceed $1,000 as provided in FNSBC 1.20.080, in addition to all other penalties provided. (Ord. 2018-19 § 2, 2018; Ord. 2018-09 § 3, 2018; Ord. 2014-12 § 6, 2014; Ord. 2013-65 § 8, 2013; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.060.)

8.48.080 Procedures and forms.

A. Every room rental made within the borough, unless explicitly exempted by this chapter or a subsequent ordinance, shall be presumed to be subject to the room tax imposed hereunder in any action to enforce the provisions of this chapter.

B. The director shall adopt and amend procedures, regulations, fees, and forms for the administration of this chapter, shall adopt guidelines for the determination of the taxability of transactions, and may rule on specific transactions upon request. The parties to that rental may rely upon the written ruling on a specific room rental unless essential facts were not provided to the director or the ruling is clearly contrary to the provisions of this chapter.

C. Claims filed and decisions made under this section are subject to the appeal process set forth in FNSBC 8.48.120.

D. The director shall take all steps necessary and appropriate to administer this chapter. Such steps may include the authority to contract services for collection of delinquent accounts, compromise and abate penalties and interest, or to negotiate and enter into payment plans for delinquent taxes, penalties and interest. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.070.)

8.48.090 Tax reporting requirements.

A. Every operator possessing a valid certificate of registration shall file a monthly report not later than the fifteenth day of the month following the month being reported upon. A report must be filed even if it indicates no taxable rentals have been made and no taxes have been collected unless an operator’s certificate is inactive. The director shall provide for the online filing of reports as required by this section. A report will be deemed filed when the total amount of tax due, if any, is received by the borough’s collection office.

B. An operator may request on a report that its certificate of registration be placed in an inactive status. An inactive status relieves the operator of filing reports under this section; provided, that there are no taxable rentals for the reporting period. If an operator engages in room rentals its inactive status will terminate and it must file a report on the due date for the next reporting period.

C. The operator shall remit, with the monthly return, the total amount of tax due for the month for which the return is filed.

D. An operator whose tax liability is always less than $1,000 a month and who, for one year, has timely remitted the taxes and timely filed the reports as required by this chapter, may file with the director a written request to remit taxes and file reports quarterly. The director shall evaluate the operator’s compliance with this chapter and shall, based on that evaluation, either approve or deny the operator’s request.

If the director approves the request, then the operator shall file a quarterly report not later than the fifteenth day of the month following the quarter being reported upon. Quarterly reports shall be filed for the calendar quarters ending March 31st, June 30th, September 30th, and December 31st. A report must be filed even if it indicates no taxable rentals have been made and no taxes have been collected unless an operator’s certificate is inactive.

The operator shall remit to the borough, with the quarterly report, the total amount of tax due for the quarter for which the report is filed.

E. If the fifteenth day of the month is a Saturday, Sunday, federal or borough holiday, the due date shall be extended until the next business day.

F. A report is considered filed if it has been delivered to and received by the borough’s collection office. The U.S. Postal Service postmark shall determine the date of filing for mailed reports.

G. All reports shall include at least the following:

1. The amount of all room rentals made during the reporting period, excluding room tax.

2. All exempt room rentals made during the reporting period. Copies of exempt room rental documentation shall be included with the report, except that documentation on monthly room rentals is not required.

3. The gross taxable rentals.

4. The total taxes due (eight percent of the gross taxable rentals).

5. Such other information and supporting documents as the director may require.

H. Every operator with no outstanding room tax indebtedness and who is otherwise in compliance with all provisions of this chapter is eligible, under the following terms, to a compensatory collection discount. If an operator has timely remitted the taxes as required by this chapter and timely filed the reports as required by this chapter, then the operator may take a deduction from the amount to be remitted in the form of a credit of two percent of the amount of taxes to be remitted by the operator to the borough for that month. This credit, however, shall not exceed $250.00 per month. An eligible operator must take the compensatory collection discount at the time of filing the report; accumulation and retroactive refunds of discounts are not allowed. The credit provided in this subsection is the only room tax credit allowed.

I. If the borough is collecting taxes under FNSBC 8.48.030(B)(3), the director may, in addition to all other penalties imposed by this chapter, require the operator to file monthly reports for any or all rooms rented within the cities of Fairbanks or North Pole. (Ord. 2016-40 § 60, 2016; Ord. 2016-08 § 2, 2016; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.080.)

8.48.100 Penalties, estimated taxes, administrative fees and interest. Revised 8/18

A. An operator who fails to file a return, whether taxes are due or not, as required by this chapter shall incur penalties. An operator who fails to collect taxes shall incur penalties. In addition to penalties incurred, the operator shall pay all collected or uncollected taxes as identified by the operator or estimated by the borough. A person engaged in business as an operator with or without a valid certificate of registration issued under this chapter is personally liable for all taxes that should have been collected and remitted to the borough. Penalties shall be imposed based on the date the return is received, or postmarked by the U.S. Postal Service, after the due date according to the following schedule:

Month Filing For

Report/Remittance Due Date

Late Report Penalty $25.00/Late Remittance Penalty – 10% of the taxes due.

Additional Late Report/ Late Remittance Penalty – 25% of taxes due.

January

February 15

February 16 – March 15

March 16

February

March 15

March 16 – April 15

April 16

March

April 15

April 16 – May 15

May 16

April

May 15

May 16 – June 15

June 16

May

June 15

June 16 – July 15

July 16

June

July 15

July 16 – August 15

August 16

July

August 15

August 16 – September 15

September 16

August

September 15

September 16 – October 15

October 16

September

October 15

October 16 – November 15

November 16

October

November 15

November 16 – December 15

December 16

November

December 15

December 16 – January 15

January 16

December

January 15

January 16 – February 15

February 16

B. Penalties shall be applied to quarterly operators in the same manner as for monthly filers. For example, the quarterly report for the period January through March is due on or before April 15th. If the report is filed between April 16th through May 15th, the late return penalty shall be applied. If the quarterly report is filed on or after May 16th, the additional late report penalty shall also be applied. Any operator who has been approved to file quarterly reports and then fails to timely file the reports and/or remit taxes may be required to return to filing monthly reports.

C. An operator is subject to an additional $1,000 penalty each month if the operator fails to file a report or return for 90 days or more, fails to remit taxes for 90 days or more, operates without a valid certificate of registration, or in any other way does not comply with the requirements of this chapter if operating with a certificate of registration and the operator does not timely file a report or return or fails to remit taxes, or upon notification by certified mail of the requirement to obtain a certificate of registration if one has not been obtained.

D. Estimated Taxes. If the borough is unable to ascertain the tax due from an operator because the operator failed to file a return, transmit collected taxes, collect taxes, keep accurate books, allow inspection, or has falsified records, the borough may make an estimate of the tax due based on any evidence in its possession. Notice of the estimate of taxes due shall be furnished to the operator and shall become final for the purpose of determining liability of the operator 30 days after the decision is mailed to the operator, unless the operator earlier files an accurate return or files an appeal.

E. In addition to other penalties imposed in this chapter, an operator engaging in any prohibited act(s) is liable for any administrative fees, outside collection agency fees, attorney fees, and other necessary costs incurred by the borough or its agent(s) in the collection of taxes owed under this chapter.

F. Simple interest at a maximum rate of 15 percent per year shall accrue on all delinquent taxes, not including penalty and administrative fees, from the date due until paid in full.

G. The borough will apply payment of delinquent taxes first to the payment of all administrative and collection costs, then to penalties, then to the payment of unpaid interest that has accrued on the taxes, and then to the payment of the tax principal. (Ord. 2018-19 § 3, 2018; Ord. 2016-08 § 3, 2016; Ord. 2013-65 § 9, 2013; Ord. 2004-59 § 3, 2004; Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.090.)

8.48.110 Recovery of taxes.

A. In addition to the administrative procedures provided in this chapter, taxes due but not paid may be recovered by the borough through a civil action against the operator or guest.

B. The tax, penalty, administrative fees, collection fees, and interest imposed by this chapter shall constitute a lien in favor of the borough upon all the assets or property of the operator who is liable for such taxes. The lien arises upon delinquency and continues until the liability for the amount is satisfied either through execution, foreclosure sale or other legal means. This lien is not valid as against a mortgagee, pledgee, purchaser or judgment creditor until notice of the lien is filed in the office of the recorder for the Fairbanks recording district. After such filing, the lien is superior to all other liens except those excluded by federal or state law.

C. The amount of tax may be determined and assessed for six years after the date a report was filed or should have been filed with the borough. The borough may bring no civil action for the collection of such tax after the end of the six year period except that the borough may file an action for taxes and penalties due for those report periods that are the subject of an assessment or other administrative decision mailed to the operator within the six-year period. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.100.)

8.48.120 Administrative procedures and appeal.

An operator may appeal to the director any decision, tax liability estimate, penalties, or other costs or actions imposed by a person other than the director. All appeals must be filed within 30 days after the decision, notice of tax liability estimate, penalties, or other notification is mailed to the operator. The appeal must state the legal and factual basis for the appeal and include all supporting documents related to the appeal. If necessary, the director may conduct a hearing. At the hearing both parties shall have the right to present testimony and cross-examine witnesses. All administrative appeal decisions shall include findings of fact and final determinations related to the appeal. All administrative appeal decisions shall be final decisions that are enforceable under this chapter unless stayed by order of the court or agreement of the parties. Final administrative decisions issued by the director may be appealed to superior court in the fourth judicial district as provided by court rules for administrative appeals. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.110.)

8.48.130 Refund of room tax.

A. Right to Application for Refund. If, through error or otherwise, an operator pays the borough room taxes to which the borough is not entitled by law, the operator may, within one year from the date the tax was due, apply to the director for a refund. The burden of proving the overpayment made to the borough is on the operator claiming or requesting a refund.

B. Exclusive Procedure. The procedure set forth in this section is the sole and exclusive procedure whereby a refund may be made, and is a prerequisite to bringing a suit to recover any taxes paid. Any person who has not timely filed an application for a refund as provided herein shall be deemed to have waived any right to such refund. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.120.)

8.48.140 Record keeping.

A. Each operator shall maintain the following records for a period of six years after filing:

1. Tax reports;

2. All guest registers and all other accounting records reflecting and documenting all room rental activity;

3. Rental receipts; and

4. All documentary evidence collected which supports any provided exemption from the tax.

B. The borough or its designee may examine and inspect at reasonable hours all books, records and other documents kept by an operator related to the provisions of this chapter. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.130.)

8.48.150 Confidentiality.

A. Generally, documents in the possession of the borough are available to the public for inspection and copying. If, however, an operator makes a showing satisfactory to the director that a report, record, application or other information submitted by an operator would, if made public, divulge information entitled to protection as trade secrets under state law, the borough will treat the record, report, application, or other information as confidential. This showing requires, but is not limited to, the owner’s certification under oath that:

1. Public disclosure would tend to affect adversely the operator’s competitive position; and

2. The records, reports, application or other information submitted would divulge sales figures, processes, techniques or other financial data of the operator that are entitled to protection as trade secrets under state law.

B. It is unlawful for any person to divulge to another any documents or information obtained from any records or documents filed with the borough that have been determined to be confidential unless specifically permitted by state law or this chapter.

C. The director shall safely keep all records and information deemed confidential under this section secure from public inspection and release. The director may, six years after the filing date, destroy the records.

D. Notwithstanding other provisions of this chapter, the borough may, even for records deemed confidential:

1. Compile and publish statistical evidence concerning the data submitted, provided no identification of particular reports deemed confidential is made.

2. Release the operator’s names, owners, mailing addresses and filing status to the public. Filing status for this purpose includes whether the operator is exempt, delinquent, or current in payment of taxes.

3. Provide the records to an auditor, collection agency or attorney, acting as an agent of the borough, for the review and use in performing services for the borough.

4. Exchange confidential information about an operator with another jurisdiction, which has a similar tax, if that other jurisdiction has similar provisions protecting the confidentiality of the operator’s records.

5. Release records with the permission of the operator.

6. Use such records in a criminal or civil action brought to enforce the terms of this chapter.

E. Hearings conducted by the director are public. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.140.)

8.48.160 Severability.

If any section, subsection, paragraph, sentence, clause or phrase of this chapter is held unconstitutional or in violation of law then that holding shall not affect the validity of the remainder of this chapter. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.150.)

8.48.170 Prospective application only.

The penalties, estimated taxes, administrative fees, and other provisions set forth herein shall have prospective effect only. Prior decisions imposing penalties, fees, interest, and estimating taxes shall not be amended nor adjustments or refunds allowed based on these provisions. (Ord. 2002-39 § 2, 2002. 2004 Code § 3.58.160.)


1

Prior legislation: Ords. 92-032 and 95-038.