Chapter 3-4
TRANSIENT OCCUPANCY TAX

Sections:

Article 1. Definitions

3-4-100    Definitions.

Article 2. Procedures

3-4-200    Delegation of authority.

3-4-205    Levy and collection of tax.

3-4-207    Levy and collection of special tax.

3-4-210    Duties of operator.

3-4-215    Registration – Issuance of certificate.

3-4-220    Reports – Remittance of collections.

3-4-225    Penalties and interest for delinquencies.

3-4-230    Determination of tax by City upon failure of operator to collect and remit tax.

3-4-235    Appeals.

3-4-240    Records to be kept.

3-4-245    Refunds.

3-4-250    Use of funds.

3-4-255    Collection by court action.

3-4-260    Certain acts prohibited.

3-4-265    Future rate changes.

Article 1. Definitions

3-4-100 Definitions.

For the purposes of this Chapter, the following words and phrases shall have the meanings respectively ascribed to them by this Section:

(A) “Hotel” means any structure, or any portion of any structure, or any space which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, including any hotel, RV park, inn, tourist home, or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, bed and breakfast facility, mobile home or house trailer at a fixed location or other similar structure or portion thereof.

(B) “Occupancy” means the use or possession, or the right to the use or possession, of any room, space, 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. Compliance with the provisions of this Chapter by either the principal or the managing agent shall be considered to be compliance by both.

(D) “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.

(E) “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 occupancy providing for a longer period of occupancy.

Article 2. Procedures

3-4-200 Delegation of authority.

The City Administrator or his/her designee shall administer this Chapter.

3-4-205 Levy and collection of tax.

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten percent (10%) of the rent charged by the operator. Such tax constitutes a debt owed by the transient to the City, which is extinguished only by payment to the operator. 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 transients ceasing to occupy space in the hotel.

3-4-207 Levy and collection of special tax.

(A) For the privilege of occupancy in any hotel, each transient is subject to and must pay a special tax in the amount of two percent (2%) of the rent charged by the operator. Such tax constitutes a debt owed by the transient to the City, which is extinguished only by payment to the operator. 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.

(B) All proceeds of the tax levied and imposed under subsection (A) of this Section shall be accounted for and paid into a special fund or account designated for use for the funding of public restroom and parking improvements only. For the purposes of this subsection, “public restroom and parking improvements” means constructing, maintaining, and operating public restroom and parking improvements, and includes acquisition of land or easements, extension of utilities, and other related activities as deemed by the City Council to be in the best interests of the City.

3-4-210 Duties of operator.

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 provided in this Chapter.

3-4-215 Registration – Issuance of certificate.

Within thirty (30) days after the effective date of this Chapter or the commencement of business, whichever date shall first occur, each operator of any hotel renting occupancy to transients shall register such hotel with the City and obtain a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises. Such certificate shall, among other things, state the following:

(A) The name of the operator.

(B) The address where service of notices can be made in addition to the hotel address.

(C) The date upon which the certificate was issued.

(D) “This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Transient Occupancy Tax chapter by registering with the City for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the City. 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.”

3-4-220 Reports – Remittance of collections.

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 Administrator or his designee, make a return to the City, on forms provided by the City, of the total rents charged and received and the amount of tax collected for transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the City. The Administrator 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 Article shall be held in trust for the account of the City until payment thereof is made to the City.

3-4-225 Penalties and interest for delinquencies.

(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 (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 ten percent (10%) of the amount of the tax in addition to the amount of the tax and the ten percent (10%) penalty first imposed.

(C) Fraud. If the Administrator determines that the nonpayment of any remittance due under this Chapter is due to fraud, a penalty of twenty-five percent (25%) 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 permit any tax imposed by this Chapter shall pay interest at the rate of one percent (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 accrues under the provisions of this Section shall become a part of the tax required to be paid.

3-4-230 Determination of tax by City upon failure of operator to collect and remit tax.

If any operator shall fail or refuse to collect the tax imposed by this Chapter and to make, within the time provided in this Chapter any report and remittance of such tax, or any portion thereof, the City shall proceed in such manner as deemed best to obtain facts and information on which to base the estimate of the tax due. As soon as the City shall procure such facts and information as it 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, the City 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 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, business or personal. Such operator may within ten (10) days after the serving or mailing of such notice make application in writing to the Administrator 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 City shall become final and conclusive and immediately due and payable. If such application is made, the Administrator 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 such notice why such 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 Administrator 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 SJBMC 3-4-235.

3-4-235 Appeals.

Any operator aggrieved by any decision of the Administrator with respect to the amount of tax, interest and penalties under this Chapter, 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 in this Chapter for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

3-4-240 Records to be kept.

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 (3) years, all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and payment to the City, which records the Administrator shall have the right to inspect at all reasonable times.

3-4-245 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, that a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Administrator within one (1) year of the date or payment.

(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 Administrator that the person from whom the tax has been collected was not a transient; provided, 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, when the transient having paid the tax to the operator, establishes to the satisfaction of the 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.

3-4-250 Use of funds.

(A) Funds derived through the levying of the transient occupancy tax imposed under SJBMC 3-4-205 shall be deposited in the general fund of the City to be used for general governmental purposes, including maintenance, improvement or acquisition of public facilities which the City Council may determine are of a direct benefit to the City.

(B) Funds derived through the levying of the special transient occupancy tax imposed under SJBMC 3-4-207(A) shall be deposited in a special fund to be used for those purposes set forth in Section 3-4-207(B).

3-4-255 Collection by court action.

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 for the recovery of such amount. Venue for any action against an operator shall be in San Benito County, California.

3-4-260 Certain acts prohibited.

No person shall fail or refuse to register as required in this Chapter, or furnish any return required to be made, or fail or refuse to furnish a supplemental return or other data required by the City, or render a false or fraudulent return or claim. No person required to make, render, sign or verify any report or claim shall make 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.

3-4-265 Future rate changes.

Future changes to the tax rate may be made either by resolution or ordinance.

Legislative History: Ords. 200 (2/5/85), 94-5 (3/15/94), 2004-03 (11/18/03).