Chino Hills Municipal Code Ch. 3.32 Transient Occupancy Tax

This chapter shall be referred to as the "Chino Hills Transient Occupancy Tax Ordinance."

(Ord. 141 § 1 (part), 2000)

For the purposes of this chapter, certain words and phrases shall be construed and defined as set forth in this section unless it is apparent from the context that a different meaning is intended:

"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, motel, inn, tourist home or house, 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. "Hotel" also includes any residential dwelling, or portion thereof, that is offered or otherwise made available for transient lodging.

"Motel" shall have the same meaning as "hotel."

"Occupancy" means the temporary use or possession, or the right to the use or possession, of any room or rooms or portion thereof, in a hotel for dwelling, lodging or sleeping purposes.

"Operator" means a person who is the owner and/or manager of a hotel. When an owner operates the hotel 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 the managing agent's principal.

"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 by an operator, whether or not received, for the occupancy or right to occupy space in the hotel according to the then effective schedule of rates for such room or rooms on the date or dates of such occupancy, whether to be received in money, goods, labor or otherwise, including all receipts, cash credits, property and services of any kind or nature, included in the price of the room, without any deduction or offset therefrom whatsoever.

"Tax" means the transient occupancy tax levied pursuant to the provisions of this chapter.

"Tax administrator" means the Director of Finance of the city who is charged with collection of the tax.

"Transient" means any person who exercises occupancy or is entitled to occupancy of a room in a hotel by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less. Portions of calendar days shall be counted as full days. A person so occupying a room in a hotel for more than thirty consecutive calendar days shall not be deemed to be a transient for any part of the stay and shall not be obligated to pay the tax.

(Ord. 141 § 1 (part), 2000; Ord. No. 363, § 2, 12-8-2020)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of twelve (12) 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 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 tax administrator may require that such tax shall be paid directly to the tax administrator.

(Ord. 141 § 1 (part), 2000; Ord. No. 363, § 3, 12-8-2020)

A. No tax shall be imposed upon:

1. Any person as to whom, or any occupancy as to which, it is beyond the legal authority of the city to impose the tax;

2. Any federal officer or employee when on official business;

3. Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; nor

4. Any person who occupies a room in a hotel for more than thirty (30) consecutive days.

B. Exemptions for Certain Occupancies. A tax shall not be levied upon either of the following occupancies of a room in a hotel:

1. If the occupancy is of one permitted living unit for the owner/manager; or

2. If the occupancy of a room in a hotel is by an employee of the operator and/or owner which room is utilized by such employee while visiting the premises for business purposes and for which no rent is charged.

C. Claims. No exemption shall be granted except upon a claim therefor made at the time rent is collected. Each such claim shall be made under penalty of perjury upon a form prescribed by the tax administrator.

(Ord. 141 § 1 (part), 2000)

Within thirty (30) days after commencing a hotel business within the city, each operator shall register the hotel with the tax administrator, who shall issue a transient occupancy registration certificate. A copy of each certificate shall be posted at all times in a conspicuous place on the premises of the hotel. The 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. A provision substantially as follows: "This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the City 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 the City. This Certificate does not constitute a permit."

(Ord. 141 § 1 (part), 2000)

On or before the fifteenth (15th) day of the month following the close of each calendar month, each operator shall file a return with the tax administrator, on forms provided by the tax administrator, stating the total rent and the amount of tax due for the preceding month. At the time the return is filed, the full amount of the tax due shall be remitted to the tax administrator. The tax administrator may require additional information to be included in returns. 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 tax administrator.

(Ord. 141 § 1 (part), 2000)

A. Action by Tax Administrator. If any operator fails or refuses to collect and/or remit the tax due to the city and/or fails or refuses to file, within the time provided in this chapter any required report or return with the city, then the tax administrator shall investigate in an appropriate manner to determine an estimate of the tax due. The tax administrator shall make an estimate of all taxes due pursuant to this chapter and shall issue an order for the payment of tax ("order") determining and assessing against such operator the full amount of the taxes, including interest and penalties provided for by this chapter. The order shall briefly describe the basis for the estimate of taxes due. The tax administrator shall serve a copy of the order on the operator. The operator may within ten (10) consecutive calendar days after the service of such order file an appeal in writing with the city manager requesting a hearing on the order. If an appeal by an operator for a hearing is not made within the ten (10) day period, the order shall be deemed, for all purposes, final and conclusive and all sums set forth therein shall be immediately due and payable.

B. Appeals to City Manager. If an appeal is timely filed, the City Manager shall give not less than five days' written notice to the operator and to any person requesting such notice, of the time and place of the appeal hearing, which shall be set by the City Manager. At such hearing, the operator and any interested person may appear and offer relevant evidence as to why the tax, interest and/or penalties should not be imposed as set forth in the order. After such hearing, the City Manager shall, based upon the evidence presented, determine the total amount of tax due, together with interest and penalties, if any. The City Manager shall affirm or modify the order based upon the evidence presented. The City Manager shall serve a copy of the written decision upon the operator and any other person requesting the same. The City Manager's action on an order shall be deemed final and conclusive and all sums set forth therein shall be immediately due and payable in the absence of a timely filed appeal, appealing the decision of the City Manager.

C. Appeals from Decision of City Manager.

1. Any interested person may appeal the decision of the City Manager by filing a written appeal with the City Clerk. The written appeal shall state the grounds for the appeal and shall specifically indicate wherein the City Manager's decision is incorrect factually or legally. No such appeal shall be considered for any purpose unless the same is filed within not to exceed ten (10) consecutive calendar days after the service of the notice of the City Manager's action on the order.

2. Upon receipt of a timely appeal appealing the decision of the City Manager, the City Clerk shall report that fact to the City Council. The City Council shall thereupon designate an independent hearing officer. The hearing officer shall set the matter for a de novo hearing, and give not less than five days' notice of the time and place of the hearing to the appealing party, the City Manager, and any other person requesting such notice. The hearing officer shall give any interested person a reasonable opportunity to present evidence relevant to any or all issues involved in the hearing. The hearing officer need not observe the strict rules of evidence utilized in a judicial proceeding, but shall observe the substance of those rules to the end that the matter will be resolved upon reliable evidentiary material. Upon completion of the hearing, the hearing officer shall decide the matter by modifying, affirming or overturning the decision reached by the City Manager. The hearing officer shall give notice of such decision to the appealing party, the City Manager and any other person requesting such notice. The decision of the hearing officer shall be final and conclusive for all purposes and shall be subject only to appropriate judicial review.

(Ord. 141 § 1 (part), 2000)

A. Complimentary Occupancies. Except as provided in subsection B of this section, a tax shall be imposed for the occupancy of a room in a hotel, where such occupancy is permitted by an operator on a complimentary basis, i.e., without charge, to any person. The amount of the tax imposed upon such complimentary occupancies shall be based upon the rent which would otherwise have been charged for a comparable room or rooms on the date or dates of such complimentary occupancy.

B. Complimentary Services. Unless otherwise required by state law, the value of complimentary services shall not be deducted from the rent for a room and the tax imposed shall be on the full amount of the rent, notwithstanding the value of the complimentary service such as a complimentary meal and/or beverage.

(Ord. 141 § 1 (part), 2000)

A. Registration Cards. The operator of each hotel shall, as each room in a hotel is rented to a transient, fill out and maintain on file registration cards which shall be printed with consecutive numbers, and which contain, at a minimum, the following information:

1. The name of at least one person who will occupy, or who is entitled to occupy, the room;

2. The total number of people who will occupy, or who are entitled to occupy, the room;

3. The identification of each room by number;

4. The date the occupancy commences and the expected date of the departure of the transients; and

5. The daily rate charged and amount collected as and for rent for the room.

B. Daily Summary Sheets. The operator of each hotel shall maintain a dated daily summary sheet for each day the hotel is open for business containing, at a minimum, the following information:

1. The name of at least one person entitled to occupancy of each room which is rented or occupied that day;

2. The room number;

3. The daily rate and amount paid for the rental of the room; and

4. The number of the registration card applicable to the rental of the room.

C. Maid Reports. Each operator shall maintain dated maid reports which shall contain a list of all rooms cleaned on each day during the calendar year.

D. Receipt Book. Each operator shall maintain receipt books with a carbon copy for each receipt issued, or if the operation is computerized, a printout of all charges made on a daily basis.

E. Bank Accounts. The operator shall maintain in a banking institution one or more accounts ("accounts") which shall be used exclusively for the deposit of the receipts of the hotel operation, including rentals and expenditures relating to the hotel. If a deposit is made to such an account, and no written record exists as to its source, the amount(s) shall be deemed to be rent. All receipts from the operation of the hotel shall be deposited in such accounts.

F. Telephone Charges. Each operator shall maintain records which show all telephone, facsimile and related charges for each call made for which a charge is made by the operator or automatic metering equipment.

G. Other Financial Records. After prior notification, each operator shall maintain other financial records as the tax administrator may require.

All of the above records and any other records relevant to the subject matter of the operation of the hotel shall be made available for inspection by the tax administrator with ten (10) calendar days' written notice. All records shall be made available for inspection and copying by the city. Any hotel records disclosing the name of any guest or any personal information about a guest shall be treated as confidential by the city.

All of the records referenced in this section, shall be maintained by each operator for a period not less than three years, unless the operator has received notice that the city will be auditing its records or the city is in the process of auditing the operator's records. If the operator has notice of an impending or ongoing audit, then the operator shall keep the required records for the time period specified in the notice until the audit has been completed and all obligations under this chapter are paid in full; however, under no circumstances shall the records be maintained for less than three years from the date the record was created.

An operator may apply to the tax administrator for modification of the record keeping requirements of this section if the operator demonstrates that the operator has an alternate recordkeeping system which provides proper safeguards to ensure compliance with the requirements of this chapter. However, the tax administrator shall not extend the length of time specified in this section that records shall be required to be kept. The decision of the tax administrator may be appealed to the City Manager. The decision of the City Manager shall be final and conclusive for all matters.

The tax administrator, upon completion of a proceeding which involves the use of records copied from the original records in the possession or custody of an operator shall return all such copies, or, at the direction of such operator, destroy the same. No return or destruction of records shall occur without the written consent of the City Attorney.

(Ord. 141 § 1 (part), 2000)

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, C and D 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 one year after the date of payment. All such claims shall be on forms furnished by the tax administrator.

B. An operator may claim a refund for, or receive as a credit against taxes collected and remitted, the amount overpaid, paid more than once or erroneously or illegally collected or received when the tax administrator reasonably determines such to be the case, 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 paid 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 and paid the same to the city.

D. An operator may claim a refund for, or receive as a credit against taxes collected and remitted, the amount overpaid by the operator based on the operator's clerical or computation error. The operator shall not be entitled to such a refund or credit until the operator has established the existence of such clerical or computation error to the satisfaction of the tax administrator.

E. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records showing such entitlement.

(Ord. 141 § 1 (part), 2000)

A. Tax as Civil Debt. Any tax required to be paid pursuant to this chapter:

1. Which is collected by an operator and has not been paid to the city in the time prescribed by this chapter, shall be deemed to be a civil debt owed by the operator to the city; and

2. By a transient, which tax is not collected for any reason by the operator whether or not rent is collected by such operator from such transient, the amount of such tax shall be deemed to be a civil debt owed by the operator and the transient to the city.

B. Civil Actions. If a civil action is required to enforce the collection of a tax from any person, and a recovery of such tax in any amount is granted in such a civil judicial proceeding, the city shall be entitled to recover its reasonable attorneys' fees, court costs, and its costs of the administrative process under this chapter, including, but not limited to other direct and indirect costs incurred by the city with reference to such litigation.

(Ord. 141 § 1 (part), 2000)

A. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty in an amount equal to ten (10) percent of the amount of the tax due, per month in addition to the amount of the tax, until the tax is paid in full, or the total penalty equals one hundred (100) percent of the tax due.

B. If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five (25) percent of the amount of the tax shall be added thereto in addition to the penalties referred to in subsection A of this section.

C. Every penalty imposed upon a tax levied pursuant to this chapter shall be deemed for the purpose of collection merged in the tax to which it relates and the full amount thereof shall be due, payable and subject to collection as provided in this chapter.

D. Interest shall accrue on the full amount of such taxes at an interest rate equal to the interest rate imposed on judgments issued by courts of record in this state. Interest shall commence to run on the day following the date of accrual of all permitted penalties, through and including the date of payment in full.

(Ord. 141 § 1 (part), 2000)

A. The tax administrator may require any operator, upon reasonable written notice, to provide the tax administrator with access to all of the operator's books and records relating to the operators operation of the hotel, including rents charged by such operator which are subject to a tax pursuant to this chapter. If, as a result of any such audit, it is determined that a return required to be filed by such operator pursuant to Section 3.32.060 of this chapter is inaccurate and did not include and report the correct amount of tax due pursuant to this chapter, the operator shall forthwith pay to the city all taxes which are shown to be due as a result of such audit, regardless of whether the operator collected such taxes.

B. If an audit conducted pursuant to the provisions of this section reflects that in any calendar month there was under-reporting of taxes due by five percent or more, which under-reporting was not corrected by the operator prior to the commencement of the audit, all costs associated with the audit shall be borne by the operator and the cost thereof shall be subject to collection as a civil debt by the city.

(Ord. 141 § 1 (part), 2000)

A. If the operator determines that a transient is exempt from the payment of the tax pursuant to the provisions of this chapter, the operator shall file a copy of each claim under Section 3.32.040(C) with the tax administrator not later than the date upon which the next return required by this chapter is required to be filed with the tax administrator.

B. Claims for exemptions shall be made on forms provided for that purpose by the tax administrator. All information required on the form shall be completed by the person who claims to be exempt from payment of the tax. Each operator is obligated to review each claim to ensure that it is fully completed. When an operator submits to the tax administrator a claim of exemption which is either not timely filed or is incomplete, the tax administrator shall reject such claim of exemption and give the operator a brief statement of reasons therefor. When the rejection is based upon the form not being properly completed, the operator may within ten (10) consecutive calendar days from the date of return of the rejected claim for exemption refile the same with all information required to be placed thereon included in the refiled claim.

C. When a claim of exemption is defective, the operator:

1. Shall be responsible for all taxes due with respect to the purported exempt transient; and

2. Shall pay to the city a service charge of five dollars ("service charge") for each claim of exemption which is rejected by the tax administrator as incomplete or inappropriate; and

3. The tax administrator shall give notice to the operator of all taxes due as a result of rejection of the exemption claims and the amount of service charges imposed. The operator shall pay all sums due within ten (10) working days of notification.

D. The amount of the service charge shall be increased on or after January 1st of each year in an amount equal to the increase in the consumer price index for all urban consumers (Los Angeles-Riverside-Orange County) during the preceding calendar year. For the purpose of this chapter, service charges imposed shall be deemed for all purposes to have merged into the tax due, and shall be subject to collection in the time and manner as set forth in this chapter.

E. If an operator consistently files claim forms which are either not timely filed, or are incomplete, the tax administrator may require the operator to place a cash deposit in an amount not to exceed two hundred fifty dollars ($250.00) with the tax administrator for the purpose of ensuring that taxes due and service charges imposed as a result of defective claims for exemption are timely paid. If such a deposit is required, the operator shall maintain the deposit in an amount not less than that set by the tax administrator.

(Ord. 141 § 1 (part), 2000)

The City Council is authorized hereunder to: (A) suspend and thereafter reinstate the collection of the tax and (B) temporarily reduce the amount of the tax and thereafter impose it at a rate not higher than the maximum rate approved by the electorate.

(Ord. 141 § 1 (part), 2000)

Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable therefor by a fine of not more than one thousand dollars ($1,000.00) or by imprisonment in the county jail for a period of not more than six months or by both such fine and imprisonment.

(Ord. 141 § 1 (part), 2000)