Chapter 3.20 — TRANSIENT OCCUPANCY TAX

The ordinance codified in this chapter is known as the "Transient Occupancy Tax Ordinance." (Ord. 155 § 1, 1965; Ord. 995 § 1, 2018)

In this chapter, except where the context otherwise requires:

"Hotel" means a structure or a portion of a structure that is occupied or intended for occupancy by transients for dwelling, lodging or sleeping purposes. It includes a hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, roominghouse, apartment house, dormitory, public or private club, or mobile home which is located outside a mobile home park (when the tenant is not an employee of the owner or operator of the mobile home), or other similar structure or portion thereof.

"Occupancy" means the use or possession, or the right to the use or possession, of a room or portion of a room in a 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 another capacity. Where the operator performs his or her functions through a managing agent other than an employee, the managing agent is also deemed an operator for the purposes of this chapter. Compliance with this chapter by either the principal or the managing agent is considered to be compliance by both.

"Person" is defined at Section 1.01.020.

"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, property and services, without any deduction.

"Rental agent" means a person other than an operator who collects rent from a transient for the transient's occupancy of a hotel.

"Tax administrator" means the city manager.

"Transient" means a person who occupies or is entitled to occupy a hotel space for a period of thirty consecutive calendar days or less, counting portions of calendar days as full days. A person so occupying a hotel space is deemed to be a transient until the period of thirty days has expired, unless there is a written agreement between the operator and the occupant providing for a longer period of occupancy.

(Ord. 155 § 2, 1965; Ord. 272, 1976; Ord. 995 § 1, 2018)

For the privilege of hotel occupancy, each transient must pay a tax in the amount of ten percent of the rent charged by the operator. The tax constitutes a debt owed by the transient to the city which is extinguished only by payment to the operator, a rental agent, or the city. The transient must pay the tax to the operator or rental agent at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax must be paid with each installment. The unpaid tax is due upon the transient's ceasing to occupy the space in the hotel or motel. If the tax is not paid to a rental agent, it must be paid to the operator before the transient has ceased occupancy in the hotel, or paid directly to the tax administrator. The tax administrator may require that the tax be paid directly to the tax administrator.

(Ord. 155 § 3, 1965; Ord. 364 § 1, 1984; Ord. 533, 1993; Ord. 995 § 1, 2018)

• A. Exemption. No tax is imposed upon:

  1. A person as to whom (or any occupancy as to which) it is beyond the power of the city to impose the tax;

  2. A federal or state of California officer or employee when on official business;

  3. An officer or employee of a foreign government who is exempt because of an express provision of federal law or international treaty;

  4. A transient who occupies a room for which the rent is two dollars or less per day.

• B. Claim Requirement. No exemption may be granted unless the transient makes a claim for it at the time rent is collected. The claim must be made under penalty of perjury on a form prescribed by the tax administrator.

• (Ord. 155 § 4, 1965; Ord. 995 § 1, 2018)

Each operator and each rental agent must collect the tax to the same extent and at the same time as the rent is collected. The amount of tax must be separately stated from the amount of the rent charged, and each transient must receive a receipt for payment from the operator or rental agent. The operator or rental agent may not advertise or state, whether directly or indirectly, that the tax or any part of it will be assumed by the operator or rental agent, 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 Section 3.20.120.

(Ord. 155 § 5, 1965; Ord. 995 § 1, 2018)

Within thirty days after starting business, each hotel operator must register the hotel with the tax administrator and obtain from him or her a transient occupancy registration certificate. The operator must post the certificate in a conspicuous place on the premises. The certificate will state the following, among other things:

• 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 operator has fulfilled the requirements of the city's Transient Occupancy Tax Ordinance by registering with the tax administrator for the purpose of collecting the transient occupancy tax and remitting the tax to the tax administrator. This certificate does not authorize anyone to conduct an unlawful business. This certificate does not constitute a permit."

§ 3.20.060

• (Ord. 155 § 6, 1965; Ord. 995 § 1, 2018)

• A. Report. Each operator and each rental agent must make a return to the tax administrator on forms provided by him or her of the total rents charged and received and the amount of tax collected for transient occupancies. The operator must file the report 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 tax administrator.

• B. Remittance. When the return is filed, the operator or rental agent must remit the full amount of the tax collected to the tax administrator. The operator or rental agent must hold in trust for the city all taxes collected under this chapter.

• C. General. The tax administrator may: (1) establish shorter reporting periods for a certificate holder if the tax collector deems it necessary to ensure collection of the tax; and (2) require further information in the return. Return and payment are due immediately upon cessation of business.

• (Ord. 155 § 7, 1965; Ord. 995 § 1, 2018)

• A. Original Delinquency. An operator or rental agent who fails to remit the tax imposed by this chapter within the time required must pay a penalty of ten percent of the amount of the tax in addition to the amount of the tax.

• B. Continued Delinquency. An operator or rental agent 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 must 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 the remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax will be added, in addition to the penalties stated in subsections A and B of this section.

• D. Interest. In addition to the penalties imposed, an operator or rental agent who fails to remit the tax imposed by this chapter must 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 this section become a part of the tax required to be paid.

• (Ord. 155 § 8, 1965; Ord. 995 § 1, 2018)

• A. Information for Tax Estimate. If an operator or rental agent fails or refuses to collect the transient occupancy tax and to timely make and report the remittance of the tax, the tax administrator may proceed to obtain information on which to base an estimate of the tax due. As soon as the tax administrator obtains the reasonably available information, the tax administrator will determine and assess against the operator or rental agent the tax, interest and penalties authorized by this chapter.

• B. Notice of Tax Assessed. When a determination is made under subdivision A of this section, the tax administrator will give a notice of the assessed amount by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator or rental agent at the last known place of address.

• C. Request for Hearing. The operator or rental agent may within ten days after the serving or mailing of the notice submit a written application to the tax administrator for a hearing on the amount assessed. If the request for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, become final and immediately due and payable by the operator of rental agent on whom it is assessed.

If the operator or rental agent submits a timely request for hearing, the tax administrator will give at least five days' written notice to the operator or rental agent to show cause at a time and place fixed in the notice why the amount specified should not be fixed.

• D. Hearing. At the hearing, the operator or rental agent may appear and offer evidence why the tax, interest and penalties should not be fixed. After the hearing, the tax administrator will determine the proper tax to be remitted and will then give written notice to the operator or rental agent. The amount determined to be due is payable within fifteen days unless an appeal is taken as provided in Section 3.20.100. The tax administrator may assess the full amount of any unremitted taxes and penalties solely against the operator in lieu of assessing some or all of those taxes and penalties against the rental agent.

• (Ord. 155 § 9, 1965; Ord. 995 § 1, 2018)

An operator or rental agent aggrieved by a decision of the tax administrator regarding the amount of tax, interest and penalties, if any, may appeal that decision to the city council by following the procedures set forth in Section 1.12.030.

The findings of the council are final. The amount found to be due is immediately due and payable upon the service of notice of the council's decision. (Ord. 155 § 10, 1965; Ord. 995 § 1, 2018)

It is the duty of every operator or rental agent liable for the collection and payment of a tax imposed by this chapter to preserve for a period of three years the records relevant to determining the amount of the tax. The tax administrator has the right to inspect the records at all reasonable times. The rental agent must provide the operator with copies of all records necessary for the operator to comply with its obligations under this chapter. (Ord. 155 § 11, 1965; Ord. 995 § 1, 2018)

Whenever the amount of any tax, interest or penalty has been overpaid, paid more than once, or erroneously or illegally collected or received by the city (in all cases "the amount overpaid") under this chapter, it may be refunded as provided in this section. The applicant must submit a written claim within one year from the date of payment, on a form provided by the city, stating under penalty of perjury the specific grounds upon which the claim is founded. No refund will be paid under this section unless the claimant establishes his or her right to a refund by written records.

• A. Operator or Rental Agent. An operator or rental agent may claim a refund, or take as credit against taxes collected and remitted the amount overpaid, when he or she establishes in a manner prescribed by the tax administrator that the tax was overpaid. Neither a refund nor a credit is allowed unless the amount overpaid has either been refunded to the transient or credited to rent subsequently payable by the transient.

• B. Transient. A transient may obtain a refund of taxes overpaid when the tax was paid by the transient directly to the tax administrator, or when the transient, having paid the tax to the operator or rental agent, establishes to the satisfaction of the tax administrator that the transient has been unable to obtain a refund of the amount overpaid from the operator or rental agent who collected the tax.

• (Ord. 155 § 12, 1965; Ord. 995 § 1, 2018)

A tax required to be paid by a transient under this chapter is deemed a debt owed by the transient to the city. A tax collected by an operator or rental agent that has not been paid to the city is deemed a debt owed by the operator or rental agent to the city.

A person owing money to the city under this chapter is subject to an action brought in the name of the city for the recovery of the amount within three years of the date the money was due to the city. The tax administrator may assess the full amount of any unremitted taxes and penalties solely against the operator in lieu of assessing some or all of those taxes and penalties against the rental agent.

(Ord. 155 § 13, 1965; Ord. 995 § 1, 2018)

In addition to the penalties and interest set forth in Section 3.20.080, a person who violates this chapter is guilty of a misdemeanor, punishable by a fine of not more than one thousand dollars, by imprisonment for up to six months, or by both the fine and imprisonment.

A violation of this chapter includes the following:

• A. An operator, rental agent, or other person 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.

• B. A person required to make, render, sign or verify a report or claim, who makes a false or fraudulent report or claim with the intent to defeat or evade the determination of the amount due under this chapter.

• (Ord. 155 § 14, 1965; Ord. 995 § 1, 2018)