Chapter 4.55
TRANSIENT OCCUPANCY TAX

Sections:

4.55.010    Title.

4.55.020    Definitions.

4.55.030    Tax imposed.

4.55.040    Exemptions.

4.55.050    Operator’s duties.

4.55.060    Registration.

4.55.070    Tax to be paid quarterly.

4.55.080    Penalty and interest on delinquent taxes.

4.55.090    Duty to keep books – Investigation.

4.55.100    Actions to collect.

4.55.110    Violations.

4.55.120    Severability.

4.55.130    Revenue collector’s regulations.

4.55.140    Sale of business – Final return – Liability of purchaser.

4.55.150    Appeal.

4.55.160    Protest of tax.

4.55.170    Tax lien.

4.55.010 Title.

This chapter shall be known as the “Transient Occupancy Tax Ordinance of the Ketchikan Gateway Borough, Alaska.” [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.005.]

4.55.020 Definitions.

Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:

“Collected” means the time at which the rent is earned if the operator uses the accrual basis of accounting, or the time at which the rent is received if the operator uses the cash basis of accounting. The same basis of accounting normally used for keeping the books and records shall be used for reporting and remitting the tax levied by this chapter.

“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 being used or available for such purpose to the public regardless of whether it is specifically referred to as a hotel and shall include a bed and breakfast or similar facility. “Hotel” does not mean any hospital, convalescent home, sanitarium or home for aged people licensed as such by the state.

“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.

“Operator” means the person who is proprietor of the hotel, 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.

“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.

“Rent” means the consideration charged for the occupancy of space in a hotel as well as for such equipment as rollaway beds, cribs, television sets, etc., valued in money, whether to be received in money, credits, credit card charges, goods, labor, property and services of any kind or nature without any deduction therefrom whatsoever.

“Rent package plan” means the consideration charged for both food and rent where a single rate is made for the total of both. The amount applicable and apportioned to rent for determination of the transient occupancy tax under KGBC 4.55.030 shall be the same charge made for rent when not a part of a package plan.

“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 not more than 30 consecutive calendar days, counting portions of days as full days; provided, however, the day a transient checks out shall not be included in determining the 30-day period if the transient is not charged rent for that day. Any person who in fact exercises occupancy or in fact is entitled to occupancy for a period of more than 30 consecutive days shall be deemed not to have been a transient from the date of commencement of such consecutive period for days of occupancy or entitlement to occupancy. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.010.]

4.55.030 Tax imposed.

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of four percent of the rent charged by the operator. Said tax constitutes a debt owed by the transient to the borough which is extinguished only by payment to the operator or to the borough. The transient shall pay the tax to the operator of the hotel at the time such transient ceases to occupy space in the hotel; provided, however, if the rent is paid in installments, a proportionate share of the tax shall be paid with each installment, and the remaining unpaid tax shall be due upon the transient’s ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the revenue collector may require that such tax shall be paid by the transient directly to the revenue collector or may collect such tax directly from the operator. [Ord. No. 1526, §1, 6-15-09; Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.020.]

4.55.040 Exemptions.

No tax shall be imposed:

(a)    When the rent is at the rate of $3 a day or less. The exemption in this subsection applies only where the total rent charged for a room is $3 a day or less, or where the accommodations rented are in a dormitory and the rent for each transient is $3 a day or less.

(b)    When a person pays for lodging on a monthly basis, irrespective of the number of days in the month.

(c)    When any person rents a private single-family dwelling unit, vacation cabin or like facility from any owner who rents the structure or facility incidental to his own use thereof and on a casual and isolated basis not done in the regular course of business.

(d)    To the extent and in the amount that a transient occupancy tax is imposed by the city of Ketchikan on the same occupancy and transaction pursuant to the transient occupancy tax provisions of Chapter 3.28 of the City of Ketchikan Municipal Code.

(e)    On the gross receipts derived from rentals of hotel rooms, bed and breakfast or other transient occupancy to the United States government, the state of Alaska, or a municipality, when payment is made by such governmental organization directly to the provider by purchase order or by other means of direct payment. The revenue collector may require such verification of direct payment to the provider by the governmental organization as deemed necessary. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.030.]

4.55.050 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. If the operator fails to collect the tax imposed by this chapter for any reason, the operator shall be liable for the tax jointly and severally with the 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. A duplicate of this receipt shall be kept by the operator in accordance with KGBC 4.55.090. 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. Each operator shall account separately and maintain separate monthly summary totals, for both taxable and nontaxable rents and for taxes collected. Taxable rents are those defined in KGBC 4.55.020. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.040.]

4.55.060 Registration.

Within thirty (30) days after the effective date of this chapter, or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the revenue collector. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.050.]

4.55.070 Tax to be paid quarterly.

(a)    The tax levied under this chapter shall be due and payable quarterly. Each operator shall make and file with the revenue collector on forms prescribed and furnished by the revenue collector, a return, prepared under oath, setting forth the amount of all rents charged, whether exempt or not, and the amount of tax collected for transient occupancy and such other information as the revenue collector may require on such forms. The completed and executed return, together with remittance in full for the total amount of the tax due, shall be transmitted to the revenue collector on or before the last day of the calendar month following the close of each calendar quarter.

(b)    Each operator shall file a return even though no tax may be due. This return shall show why no tax is allegedly due, or, if the business has been sold or otherwise transferred, the person to whom it was transferred, the date it was transferred, and the address and telephone number of the person to whom it was transferred.

(c)    Each operator, upon cessation of business, shall, on or before the same day of the next month following cessation of business, or on the last day of the month if no corresponding day exists, make a return to the revenue collector on forms provided by him of the total rents charged and the amount of tax collected or due for transient occupancies, and shall, upon request, make their books and records available for audit. At the time the return is filed, the full amount of the tax collected or due shall be remitted to the revenue collector. Returns filed and taxes remitted and actually received by the revenue collector on or before the same day of the next month, if no corresponding day exists, shall be deemed timely filed and remitted; otherwise, the taxes are delinquent and subject to the penalties imposed by KGBC 4.55.080.

(d)    Returns filed and taxes remitted by mail shall be deemed timely filed only if the envelope or similar container enclosing the returns and taxes is addressed to the revenue collector, has sufficient postage and bears a United States postmark prior to midnight on the last day for reporting and remitting without penalty; otherwise, the taxes are delinquent and subject to the penalties imposed by KGBC 4.55.080.

(e)    The revenue collector may establish shorter reporting periods for any operator if deemed necessary in order to ensure collection of the tax and may also require further and additional information in the return. All taxes collected by the operator pursuant to this chapter shall be held in trust for the account of the borough until payment thereof is made to the revenue collector.

(f)    Returns shall be accompanied by proof, satisfactory to the revenue collector, as to claimed exemptions, or exceptions from the tax herein imposed. The burden of establishing any tax exemption is upon the claimant. In the absence of such proof, the rentals or occupancies shall be deemed to have been taxable. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.060.]

4.55.080 Penalty and interest on delinquent taxes.

(a)    Original Delinquency. In the event an operator fails or neglects to file a return when due, or fails to remit taxes collected by him, or which should have been collected by him, in a timely manner as required by this chapter, then such return and tax is delinquent and the revenue collector shall add thereto penalties as follows:

If Payment Made:

Additional Penalty

(1) Within seven (7) working days after delinquency date

1% of the amount of tax due

(2) More than seven (7) working days up to and including thirty (30) days after delinquency date

15% of tax

(3) Within sixty (60) days after delinquency date

20% of tax

(4) More than sixty (60) days after delinquency date

25% of tax

(b)    Interest. Interest on delinquent taxes shall accrue from the date of delinquency to the date of payment at the rate of one (1) percent per month.

(c)    Audit Deficiency. If, upon audit, an operator is found to be deficient in his return or his remittance or both, the amount deficient shall be deemed a delinquency under subsection (a) of this section and the revenue collector shall immediately invoice the operator for the amount of the net deficiency, plus a penalty as provided in subsection (a) of this section computed from the date the amount should have been paid plus accrued interest. Interest shall be deemed to have commenced to accrue at the rate provided in subsection (a) of this section from the date such tax should have been paid. [Ord. No. 1469, §3, 3-3-08; Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.070.]

4.55.090 Duty to keep books – Investigation.

(a)    Every operator shall keep and preserve full and complete records of all rentals or occupancies made by him, and such other books or accounts as may be necessary for the revenue collector to determine the amount of tax hereunder and the operator shall keep and preserve said records for a period of not less than two (2) years in the borough. All of said records shall be made available for inspection by the revenue collector, borough manager, and his or their designee upon request at any reasonable time.

(b)    For the purpose of ascertaining the correctness of a return or for the purpose of determining the amount of tax collected or which should have been collected by any person, the borough manager or his designee may hold investigations and hearings concerning any matters covered by this chapter, and may examine any relevant books, papers, records or memoranda of any such person, and may require the attendance of such person, or any officer or employee of such person. The borough manager or his designee shall have the power to administer oaths and affirmations to such persons, and if any such person, being first duly sworn, refuses to answer any questions put to him by the manager or his designee, the manager may apply to the superior court for an order requiring the person to answer the questions. The borough manager may issue subpoenas to compel attendance or to require production of relevant books, papers, records or memoranda. If any person refuses to obey any such subpoena, the borough manager may apply to the superior court for an order requiring the person to comply therewith.

(c)    In the event the revenue collector is unable to ascertain the tax due to be remitted by an operator by reason of the failure of the operator to keep accurate books, allow inspection, failure to file a return, falsification of records, or for any other reason, the revenue collector may make an estimate of the tax due based upon all of the information available. Notice of the estimate of taxes due and penalties and interest shall be furnished by certified mail to the operator and said amount of tax shall become final for the purposes of determining liability of the operator to the borough upon the expiration of thirty (30) days unless the operator earlier files an accurate return, supported by satisfactory records, indicating a lesser liability. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.080.]

4.55.100 Actions to collect.

Any tax required to be paid under the provisions of this chapter shall be deemed a debt owed jointly and severally by the transient and the operator and recoverable by the borough in an action brought against the transient, or the operator, or against the transient and operator jointly. Any taxes collected by an operator pursuant to this chapter which have not been paid to the borough shall be deemed to be funds held in trust on the account of the borough. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.090.]

4.55.110 Violations.

Any operator who fails to collect or remit all or any portion of the tax provided for in this chapter, or fails or refuses to comply with the provisions of this chapter, or remits or rebates to a transient or other person whether directly or indirectly and by whatsoever means, all or any part of the tax levied under this chapter, or makes in any form of advertising, verbally or otherwise, any statement which implies that the operator is absorbing the tax, or paying the tax for the transient by an adjustment of prices or in any manner whatever, and any person who makes any false statement or misrepresents any fact for the purpose of securing a tax exemption under the terms of this chapter, and any person who otherwise violates any provision of this chapter, is guilty of a violation and upon conviction thereof shall be punished by a fine of not more than $500. Each act of violation and every day upon which any such violation occurs shall constitute a separate offense. [Ord. No. 1607, §15, 10-3-11; Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.100.]

4.55.120 Severability.

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter or any part thereof is for any reason held to be unconstitutional, invalid or unenforceable, such shall not affect the validity of the remaining provisions of this chapter or any part thereof. The borough assembly declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional, invalid or unenforceable. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.110.]

4.55.130 Revenue collector’s regulations.

The revenue collector may adopt reasonable rules, regulations and forms to implement the provisions of this chapter. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.120.]

4.55.140 Sale of business – Final return – Liability of purchaser.

(a)    If any operator sells or otherwise transfers his business to another person, such seller or transferor shall make a final transient occupancy tax return within five days after the date of sale or other transfer of the business and the purchaser, transferee, successor, successors or assigns shall withhold a sufficient portion of the purchase money or other consideration to pay the amount of transient occupancy taxes, penalties and interest due and unpaid to the borough until such time as the selling or transferring operator produces a receipt from the revenue collector showing that all taxes, penalties and interest have been paid or produces a tax clearance certificate from the revenue collector stating that no tax, penalty or interest is due.

(b)    If the seller or transferor does not present a receipt or tax clearance certificate within 30 days after such successor commences to conduct business, the transferee shall deposit the withheld amount with the revenue collector pending settlement of the account of the seller or transferor.

(c)    Not later than 15 days after receipt of a written request from the transferee for a tax clearance, the revenue collector shall either issue the certificate or mail notice to the transferee at the address stated in the request of the estimated amount of the tax, interest and penalty that must be paid as a condition of issuing the certificate.

(d)    If the transferee to the business fails to withhold a portion of the purchase price as herein required, such transferee shall be liable for the payment of the amount required to be withheld.

(e)    Not later than 10 days prior to close or completion of any sale or transfer, the buyer or transferee and the seller or transferor shall file with the Ketchikan Gateway Borough an informational notice identifying the name and address of each person or entity involved in the transaction, the nature of the transaction, and the effective date of the transaction. [Ord. No. 1742, §2, 12-15-14; Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.130.]

4.55.150 Appeal.

An operator or other person aggrieved by a decision of the revenue collector or the borough manager may appeal the said decision of the borough assembly by filing with the borough clerk a written notice of appeal setting forth in detail the facts upon which such appeal is based not later than 15 days after the date of such decision. In the event no appeal is filed within the time and in the manner as provided herein said decision shall become final and conclusive. [Ord. No. 729, §1, 3-19-90. Code 1974 §45.30.140.]

4.55.160 Protest of tax.

(a)    A buyer who protests the payment of tax levied under this chapter shall pay the tax and shall provide the seller and the finance director with a written statement of protest within five working days of the sale that identifies the sale, rental or service that is the subject of the tax protested, the amount of tax paid, the buyer’s and seller’s name, mailing address, telephone number and the basis for the protest.

(b)    If the seller protests his liability on an assessment under KGBC 4.55.090(c) which has become final, he shall pay the tax under written protest setting forth the basis for the protest. No action for a refund may be maintained nor may a defense to nonpayment be maintained in a civil action unless the amount in dispute has been paid by the seller under written protest filed at or before the time of payment. [Ord. No. 1742, §3, 12-15-14.]

4.55.170 Tax lien.

(a)    The fees, charges, and penalties imposed under KGBC 4.55.030, 4.55.070, and 4.55.080, including any delinquency fees, interest, penalties and collection charges, shall constitute a lien in favor of the borough upon the real and personal property of the operator.

(b)    The lien imposed by this section arises and attaches at such time as payment becomes delinquent under KGBC 4.55.070 and 4.55.080 and continues until the entire amount is satisfied.

(c)    If fees and charges are not paid prior to delinquency, a notice of lien may be recorded in the office of the district recorder.

Upon recordation, the lien has priority over all other liens except:

(1)    Liens for property taxes, special assessments, and sales and use taxes;

(2)    Liens that were perfected before the recording of the lien under this section;

(3)    Liens that, under State law, are prior, paramount, and superior to all other liens; and

(4)    Mechanics’ and materialmen’s liens for which claims of lien under AS 34.35.070 or notices of right to lien under AS 34.35.064 have been recorded before the recording of the lien under this section.

(d)    An action to foreclose a lien created by this section shall be commenced and pursued in the manner provided for the foreclosure of liens in AS 09.45.170 through 09.45.220.

(e)    The remedy provided in this section is not exclusive and shall be in addition to all other remedies available to the borough to collect the sales taxes, penalties, and interest due under this chapter.

(f)    Fees for the administrative costs of filing on notices of liens and releasing of liens shall be:

(1)    Filing of notices of lien: $25, plus recorder’s office filing fee.

(2)    Release of liens: $25, plus recorder’s office filing fee.

(g)    The liens created by this section apply to delinquent fees and charges that are due to the City of Ketchikan and Saxman and are collected by the Ketchikan Gateway Borough. [Ord. No. 1837, §3, 8-21-17.]