TITLE VI—BUSINESS, PROFESSIONS AND TRADES

CHAPTER 3—TRANSIENT OCCUPANCY TAX

(Amd. Ord. 963, eff. 5/1/1981)

Sec. 6400 Definitions

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

(a)    Person. "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.

(b)    Hotel. "Hotel" means any structure, or any portion of the structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel or bed and breakfast inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer or motor home at a fixed location, or other similar structure or portion thereof.

(c)    Occupancy. "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)    Transient. "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 thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty (30) days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this Chapter may be considered.

(e)    Rent. "Rent" means the consideration charged, whether or not received, for the occupancy of space in a hotel 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.

(f)    Operator. "Operator" means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sub lessee, 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 or the managing agent shall, however, be considered to be compliance by both.

Sec. 6401 Tax Imposed. (Ord. 963, eff. 5/1/1981)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten (10) percent on the amount 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 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. If for any reason the tax due is not paid to the operator of the hotel, the Finance Director may require that such tax shall be paid directly to the Finance Director.

Sec. 6402 Exemptions.

No tax shall be imposed upon:

a.    Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided.

b.    Any officer or employee of a foreign government who is exempt by reason of express provision of Federal law or international treaty.

No exemption shall be granted except upon a claim therefore made at the time rent is collected and under penalty of perjury upon a form prescribed by the Finance Director.

Sec. 6403 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. 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.

Sec. 6404 Registration.

Within thirty (30) days after commencing business, each operator of any hotel renting occupancy to transients shall register said hotel with the Finance Director 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;

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 Uniform Transient Occupancy Tax chapter by registering with the Finance Director for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Finance Director. 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."

Sec. 6405 Reporting and remitting.

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 Finance Director, file a tax return to the Finance Director, on forms provided by him, showing 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 the tax collected shall be remitted to the Finance Director. The Finance Director 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 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 Finance Director.

Sec. 6406 Penalties and interest.

(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% 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 on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

(c)    Fraud. If the Finance Director determines that the non-payment of any remittance due under this Chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subparagraphs (a) and (b) of this section.

(d)    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-half of 1% per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

(e)    Penalties Merged with Tax. Every penalty imposed and such interest as levied under the provisions of this section shall become a part of the tax herein required to be paid.

Sec. 6407 Failure to collect and report tax. Determination of tax by tax administrator.

If any operator shall fail or refuse to collect said 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 Finance Director 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 Finance Director shall procure 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 the same and to make such report and remittance, he shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this Chapter. In case such determination is made, the Finance Director shall give a 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. Such operator may within ten (10) days after the serving or mailing of such notice make application in writing to the Finance Director for a hearing on the amount assessed. 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 Finance Director shall become final and conclusive and immediately due and payable. If such application is made, the Finance Director shall give not less than five (5) days written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such tax, interest and penalties. 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 Finance Director 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, interest and penalties. The amount determined to be due shall be payable after fifteen (15) days unless an appeal is taken as provided in Section 6408.

Sec. 6408 Appeal.

Any operator aggrieved by any decision of the Finance Director with respect to the amount of such tax, interest and penalties, if any, may appeal to the City Council by filing a notice of appeal with the City Clerk within fifteen (15) days of the serving or mailing of the determination of tax due. The City 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 City 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.

Sec. 6409 Records.

It shall be 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 any payment to the City, which records the Finance Director shall have the right to inspect at all reasonable times.

Sec. 6410 Refunds.

(a)    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 in subsections (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 Finance Director within three years of the date of payment. The claim shall be in such form as is designed by the Finance Director.

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

(d)    No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto.

Sec. 6411 Collection of tax.

(a)    Actions to Collect. Any tax required to be paid by any transient under the provisions of this chapter shall be deemed 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 of Arcata for the recovery of such amount.

(b)    Recording Tax Lien. If any amount required to be paid to the City under this chapter is not paid when due, the Finance Director may record in the Office of the Humboldt County Recorder a certificate which specifies the amount of tax, penalties and interest due, the name and address of the operator owing the tax and liable therefor as it appears on the tax assessment roll, and the fact that the Finance Director has complied with all provisions of this chapter in the determination of the tax, interest and penalties required to be paid. From the date of recording in the Office of the Humboldt County Recorder, the amount to be paid together with interest and penalties shall constitute a lien upon the real property in the County owned by the operator or acquired by him afterwards and before the lien expires. The lien shall have the force, effect and priority of a judgment lien and shall continue for ten (10) years from the time of recordation of the lien unless sooner released or otherwise discharged.

(c)    Assessment and Lien. Whenever delinquent taxes and penalties are not paid to the City after proper notice, the total uncollected amount including tax, penalties and administrative fees may become assessments, and the City Clerk may compile a list of such assessments together with parcel number designations and addresses upon which the assessments are being fixed. After notice and hearing, and upon confirmation of the imposition of the liens by resolution of the City Council, the City Clerk shall file a certified copy of the approved resolution with the Humboldt County Tax Collector, directing that all unpaid transient occupancy taxes, penalties and administrative fees be entered as lien charges against said property as it appears on the current assessment roll. Liens shall be collected at the same time and in the same manner, subject to the same penalties and interest upon delinquencies, as the general real property taxes are collected for the City. The City Clerk shall present for recording appropriate notices of the imposition of these liens with the Humboldt County Recorder.

(d)    No Lien Preference. Nothing in this chapter shall give the City a preference over any recorded lien which attached prior to the date when the amounts required to be paid became a lien.

(e)    Remedies Not Exclusive. The remedies and penalties provided for in this chapter shall be cumulative and not exclusive, and shall not supersede or limit any and all other remedies that may be available. (Ord. 1403, eff. 6/4/2010)

Sec. 6411.5. Payment of taxes prior to refund or judicial relief.

No legal or equitable process shall be issued in any proceeding in any court against the City or any officer to prevent or enjoin the collection of any tax sought to be collected pursuant to this chapter, and payment of all tax, interest and penalties shall be required as a condition precedent to seeking judicial review of any tax liability. (Ord. 1403, eff. 6/4/2010)

Sec. 6412 Violations: Infraction.

Any person violating any of the provisions of this chapter shall be guilty of an infraction and shall be punishable therefore in such manner as provided in Title I of the Municipal Code.

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 Finance Director, or who renders a false or fraudulent return or claim, is guilty of an infraction, and is punishable as aforesaid. Any person required to make, render, sign, or verify any report or claim who makes any 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 an infraction and is punishable as aforesaid.