Chapter 3.12
TRANSIENT OCCUPANCY TAX*

Sections:

3.12.010    Short title.

3.12.020    Definitions.

3.12.030    Tax imposed.

3.12.040    Exemptions.

3.12.050    Operator’s duties.

3.12.060    Hotel registration.

3.12.070    Reporting and remitting--Taxes to be held in trust.

3.12.080    Penalties and interest.

3.12.090    Determination of delinquent tax by tax administrator--Administrative hearing procedure.

3.12.100    Appeal to city council.

3.12.110    Records.

3.12.120    Refunds and credit--Procedure.

3.12.130    Actions to collect.

3.12.140    Lien--Recording certificate.

3.12.150    Warrant for collection of tax.

3.12.160    Seizure and sale.

3.12.170    Successor’s and assignee’s responsibility.

3.12.180    Penalty for violations.

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

3.12.010 Short title.

This chapter shall be known as the “uniform transient occupancy tax ordinance” of the city.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §1, 1965).

3.12.020 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 facility, or any portion of any structure or facility, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, 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 at a fixed location, campground or other similar structure or facility, or portion thereof, wherein overnight accommodations are offered for hire.

B.    “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.

C.    “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.  Any and all persons or entities qualifying as an operator must be in compliance with the provisions of this chapter, and are subject to joint and several liability if any are not in compliance.

D.    “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.

E.    “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.    “Tax administrator” means the finance officer.

G.    “Transient” means any individual 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 consecutive calendar days or less, counting portions of calendar days as full days.  Any such individual so occupying space in a hotel is deemed to be a transient until the period of thirty days has expired unless there is an agreement in writing between the operator and the occupant providing for a period of occupancy longer than thirty days, or rent has been paid in advance for a period of more than thirty days.  In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of the ordinance codified in this chapter may be considered.  (Ord. C-2-12 §2(part), 2012:  Ord. 15-78 §1, 1979; Ord. 7-65 §2, 1965).

3.12.030 Tax imposed.

For the privilege of occupancy in any hotel or campground each transient is subject to and shall pay a tax in the amount of twelve percent of the rent charged by the operator, or fifty cents per day, whichever is greater.  The tax constitutes a debt owed by the transient to the city which is extinguished only by the payment by the operator to the city.  The transient shall pay the tax to the operator of the hotel or campground 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 is due upon the transient’s ceasing to occupy space in the hotel or campground.  If for any reason the tax due is not paid to the operator of the hotel or campground, the tax administrator may require that such tax be paid directly to the tax administrator.  (Ord. C-2-12 §2(part), 2012:  Ord. 5-08 §1, 2009; Ord. 15-90 §1, 1990; Ord. 13-84 §1, 1984; Ord. 11-78 §1, 1978:  Ord. 4-75 §1, 1975:  Ord. 7-65 §3, 1965).

3.12.040 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 federal officer or employee when on official business;

C.    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 therefor, made at the time rent is collected and under penalty of perjury, upon a form prescribed by the tax administrator.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-96 §1, 1996; Ord. 7-65 §4, 1965).

3.12.050 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.  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. C-2-12 §2(part), 2012:  Ord. 7-65 §5, 1965).

3.12.060 Hotel registration.

Within thirty days after the effective date of the ordinance codified in this chapter, or within thirty days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the tax administrator 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 Ordinance by registering with the Tax Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator.  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.

E.    An operator of a hotel who commences operation of a hotel after a sale, assignment or other transfer of the hotel to that operator shall also comply with Section 3.12.140 in addition to registering the hotel as required by this section.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §6, 1965).

3.12.070 Reporting and remitting--Taxes to be held in trust.

A.    Each operator shall, on or before the close of city business on the last city business day of each month, or at the close of any shorter reporting period which may be established by the tax administrator, make a return to the tax administrator, on forms provided by the tax administrator, of the total rents charged and received and the amount of tax collected for transient occupancies during the immediately preceding calendar month, or shorter reporting period.  At the time the return is filed, the full amount of the tax collected shall be remitted to the tax administrator.  The tax administrator may establish shorter reporting periods for any certificate holder if he deems it necessary in order to ensure collection of the tax and he may require further information in the return.  When the last day for filing the transient occupancy tax return falls upon a Saturday or Sunday, such act may be performed upon the next business day with the same effect as if it had been performed upon the day appointed.  Returns and payments are due immediately upon cessation of business for any reason.

B.    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 tax administrator.

C.    The tax administrator may require an operator to furnish additional information or provide adequate security as necessary to ensure collection of any taxes due or to become due, and to remit taxes on a shorter reporting period.  An operator shall thereafter report and remit all taxes due under the terms and conditions prescribed by the tax administrator.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §7, 1965).

3.12.080 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 ten 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 on or before a period of thirty days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the tax in addition to the amount of the tax and the ten percent penalty first imposed.

C.    Fraud.  If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, intentional disregard or an intent to evade compliance with this chapter, a penalty of twenty-five 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.    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 one percent 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 accrues under the provisions of this section shall become a part of the tax herein required to be paid.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §8, 1965).

3.12.090 Determination of delinquent tax by tax administrator--Administrative hearing procedure.

A.    If any operator fails or refuses 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 tax administrator shall proceed in such manner as he deems best to obtain facts and information on which to base his estimate of the tax due.  As soon as the tax administrator 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 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 tax administrator 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.

B.    Such operator may, within ten calendar days after the serving or mailing of such notice, make application in writing to the tax administrator for a hearing on the amount assessed.  If a written application by the operator for a hearing is not made by mail or personal service within the time prescribed, the tax, interest and penalties, if any, determined by the tax administrator, shall become final and conclusive and immediately due and payable.

C.    If a written application is made by the operator for a hearing, the tax administrator shall give not less than ten calendar 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.

D.    After the hearing the tax administrator shall determine the proper tax to be remitted and shall, within thirty calendar days 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 calendar days unless an appeal is taken as provided in Section 3.12.100.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §9, 1965).

3.12.100 Appeal to city council.

Any operator aggrieved by any decision of the tax administrator with respect to the amount of such tax, interest and penalties, if any, may appeal to the council in accordance with the requirements of Chapter 1.25.  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. C-2-12 §2(part), 2012:  Ord. C-7-08 §2, 2008:  Ord. 7-65 §10, 1965).

3.12.110 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 the operator may have been liable for the collection of and payment to the city, which records the tax administrator shall have the right to inspect at all reasonable times.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §11, 1965).

3.12.120 Refunds and credit--Procedure.

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 tax administrator within three years of the date of payment.  The claim shall be on forms furnished by the tax administrator.

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 tax administrator 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 tax administrator, or when the transient having paid the tax to the operator establishes to the satisfaction of the tax administrator 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.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §12, 1965).

3.12.130 Actions to collect.

Any tax required to be paid by any transient, under the provisions of this chapter, is 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, is deemed a debt owed by the operator to the city.  Any person owing money to the city under the provisions of this chapter is liable to an action brought in the name of the city, or the recovery of such amount, and for attorneys’ fees and costs incurred in the enforcement of this chapter.  (Ord. C-2-12 §2(part), 2012:  Ord. 7-65 §13, 1965).

3.12.140 Lien--Recording certificate.

If any amount required to be paid to the city under the ordinance codified in this chapter is not paid when due, the tax administrator, upon expiration of the second delinquency period referenced in Section 3.12.080(B), may within four years after the amount is due record in the office(s) of the county recorder(s) of any county in the state of California a certificate specifying the amount of tax, penalties and interest due, the name and address of the operator liable for the same and the fact that the tax administrator has complied with all provisions of this chapter in the determination of the amount required to be paid.  From the time of the recording, the amount required to be paid together with penalties and interest shall constitute a lien upon any and all real property in any county in the state of California owned by the operator or thereafter acquired by the operator.  The lien shall have the force, effect and priority of a judgment lien and shall continue for ten years from the time of filing of the certificate unless sooner released or otherwise discharged.  (Ord. C-2-12 §2(part), 2012).

3.12.150 Warrant for collection of tax.

At any time after any operator is delinquent in the payment of any amount herein required to be paid off after recording a certificate of lien under Section 3.12.140, the tax administrator may issue a warrant directed to any sheriff or marshal for the enforcement of any liens and for the collection of any amount required to be paid to the city under this chapter.  The warrant shall have the same effect as a writ of execution, and be executed in the same manner and with the same effect as a levy and sale pursuant to a writ of execution.  The tax administrator may pay or advance to the sheriff or marshal such fees, commissions and expenses for services as are provided by law for similar services pursuant to a writ of execution.  (Ord. C-2-12 §2(part), 2012).

3.12.160 Seizure and sale.

At any time after any operator is delinquent in the payment of any amount or after recording of a certificate of lien, the tax administrator may forthwith collect the amount in the following manner:  The director of finance shall seize any property, real or personal, of the operator and sell the property, or a sufficient part of it, at public auction to pay the amount due together with any penalties and interest imposed for the delinquency and any costs incurred on account of the seizure and sale.  Any seizure made to collect occupancy taxes due shall be only of property of the operator not exempt from execution under the provisions of the California Code of Civil Procedure.  (Ord. C-2-12 §2(part), 2012).

3.12.170 Successor’s and assignee’s responsibility.

A.    If any operator, while liable for any amount under this chapter, sells, assigns or otherwise transfers the hotel or quits the hotel, whether voluntarily or involuntarily, the operator’s subsequent successor, assign or other transferee, or other person or entity attempting to obtain ownership of the hotel, shall notify the tax administrator of the date of transfer at least thirty days prior to the date of the sale or, if the agreement to sell, transfer, or otherwise dispose of the hotel was made less than thirty days prior to the date of transfer, notice shall be provided immediately.

B.    The successor operator, assign, purchaser, transferee, or other person or entity who obtains ownership of the hotel shall satisfy any transient occupancy tax liability associated with the property owed to the city.  Failure to do so for the benefit of the city will result in being personally liable to the city for the full amount of the tax liability, which includes interest and penalties.

C.    The successor operator, assign, purchaser, transferee, or other person or entity who obtains ownership of the hotel shall be deemed to have complied with the requirements of this section if that person or entity complies with the requirements of California Revenue and Taxation Code Section 7283.5 by withholding from the purchase price an amount sufficient to cover the tax liability, or by otherwise paying the tax liability until the tax administrator provides a “transient occupancy tax clearance certificate” showing that the tax liability has been paid in full and stating that no tax liability is due through the date of transfer.

D.    The tax administrator, within ninety days of receiving a written request from a successor operator, assign, purchaser, transferee, or other person or entity who obtains or attempts to obtain ownership of the hotel, may issue a “transient occupancy tax clearance certificate” stating either the amount of tax liability due and owing for the property, or stating that there is no tax liability due and owing for the property.  The tax administrator may also request financial records from the current or former owner or operator to conduct an audit of the transient occupancy tax that may be due and owing.  After completing the audit within ninety days after the date that the records were made available, the tax administrator may issue a tax clearance certificate within thirty days of completing the audit, stating the amount of the tax liability owed, if any.  If the city determines that the records provided for an audit are insufficient, the tax administrator may rely on the facts and information available to estimate any transient occupancy tax liability associated with the property.  The tax administrator may issue a tax clearance certificate stating the amount of the tax liability, if any, based on such facts and information available.  The tax clearance certificate shall serve as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.  (Ord. C-2-12 §2(part), 2012).

3.12.180 Penalty for violations.

A.    Any operator or other person or entity violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable by a fine of not more than one thousand dollars or by imprisonment in the county jail for a period of not more than six months or by both fine and imprisonment, in addition to the penalties provided for in this chapter and code.  The city attorney shall have discretion to prosecute any such violation of this chapter as an infraction.

B.    Any operator or other person who fails or refuses to register as required in Section 3.12.060, 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 tax administrator, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, and is punishable as stated in subsection A of this section, in addition to being subject to the other penalties provided for in this chapter and code.  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 a misdemeanor and is punishable as stated in subsection A of this section, in addition to the penalties provided for in this chapter and code.

C.    Any person convicted of an infraction for violation of this chapter is punishable by:

1.    A fine not exceeding one hundred dollars for a first violation;

2.    A fine not exceeding two hundred dollars for a second violation of the same ordinance within one year; or

3.    A fine not exceeding five hundred dollars for each additional violation of the same ordinance within one year.

D.    Any operator or other person or entity violating any of the provisions of this chapter may also be subject to civil penalties and the administrative enforcement process under Chapter 4.16.

E.    All remedies prescribed by this chapter or code, or any other provisions of law, and the use of one or more remedies by the city are cumulative, and shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.  (Ord. C-2-12 §2(part), 2012).