Clearlake Municipal Code § 3-3 Transient Occupancy Tax

This section shall be known as the Uniform Transient Occupancy Tax Ordinance of the City of Clearlake. (Ord. #4, S1)

As used in this section: HOTEL shall mean any structure, or any portion of any structure, 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, or other similar structure or portion thereof; and shall further include any space, lot, area or site in any trailer court or recreational vehicle park, mobile home park, camp, park or lot where a trailer, tent, recreational vehicle, mobile home, motor home, or other similar conveyances is occupied or intended or designed for occupancy by transient dwelling, lodging or sleeping purposes. OCCUPANCY shall mean 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. OPERATOR shall mean 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 section and shall have the same duties and liabilities as his principal. Compliance with the provisions of this section by either the principal or the managing agent shall, however, be considered to be considered to be compliance by both.

PERSON shall mean 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 shall mean 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. TAX ADMINISTRATOR shall mean the Director of Finance of the City of Clearlake, or such other official as may be appointed by the City Council of the City of Clearlake. TRANSIENT shall mean 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 ordinance may be considered. (Ord. #4, S2; Ord. #31-91, S1)

Pursuant to the authority of Section 7280 and 7281 of the Revenue and Taxation Code, for the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of eight (8%) percent of the rent charged by the operator. On and after October 1, 1992, each transient is subject to and shall pay a tax in the amount of nine (9%) 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 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. #4, S3; Ord. #31-91, S2)

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 including, but not limited to, occupancies for a period of more than thirty (30) days, occupancy by the owner of a timeshare estate in a room or rooms in a timeshare project (as defined by Section 11003.5 of the Business and Professions Code), or the owner of a membership camping contract (as that term is defined by Section 1812.300 of the Civil Code) in a camping site at a campground, or the guest of the owner, to occupy the room, rooms, camping site, or other real property in which the owner retains that interest, or occupancy in a campsite in a unit of the state park system. b. Amtrak employees pursuant to 45 U.S.C. Section 546b. 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. #4, S4; Ord. #35-92; Ord. #85-98, SS1, 2)

a. 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. b. If an operator collects the rent but fails to collect the tax imposed by this Chapter, for any reason, the City shall require the operator to pay the tax. c. The amount of tax charged each transient shall be separately stated from the amount of rent charged, and each transient shall receive a receipt for payment from the operator. d. A consecutively numbered duplicate of the receipt given to each transient shall be kept by the operator. e. No operator of a hotel, a recreational vehicle park, or a campground shall advertise or state in any manner, whether directly or indirectly, that the tax charged pursuant to this Chapter, 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. f. Each operator shall account separately for, and maintain separate monthly summary totals for taxable and nontaxable rents and for taxes collected. g. Each operator shall maintain its financial and accounting records in accordance with established accounting principles acceptable to the Tax Administrator. h. The costs of additional goods and services, which are not rent, but which may be sold as a package, or are complimentary with a room, or portion thereof, in a hotel, or a space in a recreational vehicle park or campground (such as golf, tennis, meals), shall be accounted for in accordance with any administrative rules and regulations promulgated by the Tax Administrator. (Ord. #4, S5; Ord. #85-98, S3)

a. Within thirty (30) days after the effective date of this Chapter, or within thirty (30) days after commencing business, whichever is later, each operator renting occupancy to transients shall register with the Tax Administrator and obtain a Transient Occupancy Registration Certificate to be posted at all times in a conspicuous place on the premises. Said certificate shall include the following: 1. The name of the operator; 2. The address; 3. The date upon which the certificate was issued; 4. The following statement: This Transient Occupancy Registration Certificate signifies that the person named on the face hereof is required to collect a transient occupancy tax from transients and to remit the same to the Tax Administrator and has fulfilled the requirements of the 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 constitute a permit to operate a hotel, recreational vehicle park, or campground business. Notice to Successors: You may be required to comply with notification and payment clearance provisions as set forth in subsections 3-3.16 and 3-3.17 of the Clearlake Municipal Code. A copy of these sections may be obtained from the City Clerk. b. The Tax Administrator may record the certificate to give constructive notice of its terms. c. It shall be unlawful to operate a hotel, recreational vehicle park or campground without a Transient Occupancy Tax Certificate or to fail to post the certificate in a conspicuous place at all times. (Ord. #4, S6; Ord. #85-98, S4)

a. Monthly Reporting. Each operator shall, on or before the last day of the month following the end of the previous 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 him or her, of the total rents charged and received and the amount of tax collected for transient occupancies. An operator that desires to utilize a reporting period other than a calendar month reporting period may apply to the Tax Administrator for a modified reporting schedule: however, no operator shall use a longer reporting period without obtaining prior written approval from the Tax Administrator before implementation of such longer reporting period. b. Monthly Remitting. Each operator shall, on or before the last day of the month following the end of the previous month, or at the close of any shorter reporting period which may be established by the Tax Administrator, or upon submittal of the return set forth above, remit to the Tax Administrator the full amount of tax owed. In the event that any one (1) or more tax payments owed to the City is made by a check which is dishonored by the bank, the Tax Administrator may thereafter require all payments to be made by cash, cashier’s check or money order. c. In Trust. 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. Should it be deemed necessary by the Tax Administrator, the operator may be required to establish a separate trust account at a bank for deposit of the transient occupancy taxes collected, with the City named as Trustee beneficiary. All taxes collected pursuant to this section shall be deposited and held in this account until remitted to the City. The City shall be provided with a monthly statement of such account, detailing all activity of the account. In addition to other penalties provided herein, the City may elect to seek any and all civil remedies available, including injunctive relief, against an operator who violates any provision of this ordinance. d. Delinquency. Returns and taxes remitted monthly by an operator and actually received by the Tax Administrator on or before the last day of the following month shall be deemed timely filed and remitted; otherwise, the taxes are considered delinquent and subject to the penalties and interest as set forth by subsection 3-3.8, except for returns and taxes submitted by mail which shall be deemed timely filed if the envelope or similar container enclosing the return and taxes is addressed to the Tax Administrator, has sufficient postage, and bears a United States Post Office postmark or postage meter imprint prior to midnight on the last day for reporting and remitting. If the envelope or other container bears a postage meter imprint as well as a United States Post Office cancellation mark, the latter shall govern in determining whether the filing and remittance are timely. e. Confidentiality. All returns submitted by each operator shall be treated as confidential by the Tax Administrator and shall not be released except upon order of a court of competent jurisdiction or to an officer or agent of the United States, the State of California, the County of Lake, or the City of Clearlake for official use only, or as otherwise required by the Public Records Act or subpoena. f. Accounting. The same basis for accounting used by an operator for keeping books and records shall be used for reporting and remitting. (Ord. #4, S7; Ord. #85-98, S5) 3-3.7A Cessation of Business, Reporting and Remitting Requirements. a. An operator who is transferring, selling or terminating its business shall notify the Tax Administrator in writing of such sale, transfer or termination and the name and address of the purchaser or transferee at least thirty (30) days in advance of the date of transfer, sale or termination, unless the decision to sell, transfer or terminate was made within less than a thirty (30) day period prior to the transfer, sale or termination, in which case the operator shall then immediately notify the Tax Administrator. The operator shall, at the same time, notify the purchaser or transferee of their responsibility for unpaid collected taxes as set forth in subsections 3-3.16 and 3-3.17 and further certify in writing to the Tax Administrator that the transferee or purchaser was notified of the requirements of this Chapter regarding its responsibility for unpaid collected taxes. b. Cessation of Business. Each operator upon cessation of business for any reason shall, on or before the same day of the next month following the cessation of business or on the last day of that month if no corresponding day exists, make a return to the Tax Administrator on approved forms of the total taxable rents charged, the amount of tax collected for the reporting period, remittances made, if any, and the balance of the tax due, if any, shall be remitted to the Tax Administrator. After filing the final return and remitting the balance due, the operator shall make his records of account available for a closeout audit by the Tax Administrator or duly authorized City employee. Returns filed and taxes remitted and actually received by the Tax Administrator on or before the same day of the next month following the cessation of business or on the last day of that month if no corresponding calendar day exists shall be deemed timely filed and remitted; otherwise, the taxes are delinquent and subject to the penalties imposed by subsection 3-3.8. c. The liability of the transferee or purchaser for transient occupancy taxes collected by the transferor or seller is set forth in subsections 3-3.16 and 3-3.17. (Ord. #85-98, S6)

a. Original Delinquency. Any operator who fails to remit any tax imposed by this section within the time required shall pay a penalty of ten (10%) 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 (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten (10%) percent of the amount of the tax in addition to the amount of the tax and the ten (10%) percent penalty first imposed. c. Fraud. If the Tax Administrator determines that the non-payment of any remittance due under this section 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 stated in paragraphs a. and b. of this subsection. d. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this section shall pay interest at the rate of ten (10%) percent per annum from the date on which the tax first became delinquent until paid. e. Penalties Merged with Tax. Every penalty imposed and such interest as accrued under the provisions of this subsection shall become a part of the tax herein required to be paid. f. Audit Deficiency. If, upon audit by the City, an operator is found to be deficient in either its return or its remittance or both, the Tax Administrator shall immediately invoice the operator for the amount of the net deficiency plus a penalty of ten (10%) percent of the net deficiency. If the operator fails or refuses to pay the deficient amount and applicable penalties within fourteen (14) days of the date of the Tax Administrator’s invoice, an additional penalty shall be imposed at the rate of one-third of one percent (1/3 of 1%) per day of the net deficiency, not to exceed fifteen (15%) percent for a combined total penalty not to exceed twenty-five (25%) percent of the net deficiency. (Ord. #4, S8; Ord. #85-98, SS7, 8)

a. Determination of Tax by Tax Administrator. If any operator shall fail or refuse to collect the tax or to make, within the time provided in this Chapter, any report or remittance of said tax or any portion thereof required by this Chapter, or if such operator maintains records which are inadequate to show the amount of tax due, the Tax Administrator shall forthwith assess the tax and penalties provided for by this Chapter against the operator. b. Jeopardy Determination Upon Failure to Report. When an operator fails or refuses to make or file a timely return or remittance of taxes, or when the Tax Administrator or duly authorized employee makes a determination, after having applied necessary and accepted auditing procedures or by estimation if no records are available, that an operator is or will be unable to remit any taxes collected or otherwise due at the prescribed time, the Tax Administrator may make a written estimate which shall be issued to the operator to require the operator to thereafter furnish additional information or provide adequate security as necessary to ensure collection of any taxes due or to become due, and to remit the taxes on a daily or weekly basis. The operator shall thereafter report and remit all taxes due under the terms and conditions prescribed by the Tax Administrator. The Tax Administrator shall cancel the requirements imposed under the Jeopardy Determination once timely accounting and remittance procedures have been established and the operator is satisfying all obligations imposed by law for the remittance of taxes. c. Notice. The Tax Administrator shall deliver notice of the assessment or of the Jeopardy Determination to the operator or deposit it in the United States mail, postage prepaid, addressed to the operator at the last known place of business. (Ord. #4, S9; Ord. #85-98, S9)

a. The operator may within fourteen (14) days after the serving or mailing of such notice make application in writing to the Tax Administrator for hearing on the amount assessed pursuant to subsection 3-3.9. If timely application for a hearing is not made, the tax and penalties determined by the Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five (5) days written notice in the manner prescribed herein to the operator of the time and place for a hearing before a board consisting of the Tax Administrator, the City Administrator and the City Treasurer or the duly appointed deputy of each. At the hearing, the operator may appear and offer evidence why the specified tax and penalties should not be so fixed. The board shall consider all evidence produced and shall determine the proper tax to be remitted. After the hearing, the Tax Administrator shall give written notice to the operator in the manner prescribed herein of the determination and the amount of such tax and penalties. If the amount remaining in dispute hereafter does not exceed seven hundred fifty ($750.00) dollars, the decision of the hearing board shall be final and conclusive and shall constitute the exhaustion of the operator’s administrative remedies. Any amount found to be due shall be payable within fourteen (14) days of the serving or mailing of the determination of the tax due unless a further appeal is filed with the City Clerk as provided in this section within that fourteen (14) day period for any amount in excess of seven hundred fifty ($750.00) dollars.

b. When an appeal from the hearing board for remaining taxes and penalties exceeding seven hundred fifty ($750.00) dollars is filed, the City Clerk shall cause the scheduling of the appeal to be heard by the City Council within thirty (30) days of the filing of said appeal. c. The appellant and the Tax Administrator or designate shall each have the right to appear in person and be represented by legal counsel, to receive notice, to present evidence, to call and cross-examine witnesses under oath and to present argument. The City Council shall have the power to compel attendance of witnesses and documents by subpoena in accordance with the Civil Code. The formal rules of evidence shall not apply and any relevant evidence that is the sort of evidence upon which responsible persons are accustomed to rely in the conduct of serious business affairs shall be admissible. Hearsay evidence may be considered by the City Council, but no findings may be based solely on hearsay evidence unless supported or corroborated by other relevant and competent evidence. The formal exceptions to the hearsay rule shall apply. d. The City Council is authorized to rule upon issues of law or fact and to determine the amount of the tax or penalty in accordance with this Chapter. e. The decision of the City Council shall be issued in writing no later than fourteen (14) days after the conclusion of the hearing. The decision shall be the final administrative remedy of the appellant and shall be binding upon Tax Administrator. Any amounts due shall be immediately payable to the Tax Administrator. (Ord. #4, S10; Ord. #85-98, S10)

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 within the boundaries of this City, all business records as may be necessary to determine the amount of such tax for which the operator is liable for collection and payment to the City. The Tax Administrator and authorized deputies or agents in the exercise of duties imposed by this Chapter shall have the right to inspect such records at all reasonable times and to apply auditing procedures necessary to determine the amount of tax due to City. It shall be unlawful to refuse to allow or to permit such audit to be conducted after a lawful demand therefor by the Tax Administrator. (Ord. #4, S11; Ord. #85-98, S11)

a. Whenever the amount of any tax or penalty has been overpaid, paid more than once or has been erroneously or illegally collected or erroneously received by the City under this Chapter, the overpayment may be refunded provided a claim in writing under penalty of perjury stating the specific grounds upon which the claim is founded is filed with the Tax Administrator within three (3) years of the date of payment. The claim shall be on forms available from the Tax Administrator.

b. An operator may claim a refund or take as a 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 within three (3) years of the date of payment. The claim shall be on forms available from the Tax Administrator. 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 paragraph a. of this section, but only 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. An operator who has remitted an amount in excess of the amount required to be paid by this Chapter may receive a credit to the extent of the excess. If the excess is discovered as a result of an audit by the City, no claim needs to be filed by the operator. Such credit, if approved by the Tax Administrator, shall be applied to any deficiency found or any further tax payments due under the rules prescribed by the Tax Administrator. e. 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. #4, S12; Ord. #85-98, S12)

a. 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 and payable through the operator. Any tax collected by an operator which has not been paid to the City shall be deemed funds held in trust for the account of the City which are due and payable by the operator to the City pursuant to the provisions of this Chapter. 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 Clearlake for the recovery of such amount. Upon the concurrence of the City Attorney and the City Administrator, the Tax Administrator is authorized to compromise the collection of the amount of penalties or interest, or establish a schedule of payment for any tax due, or to discontinue the collection of any claim if it appears that further proceedings would be without merit. b. Recording of Certificate of Lien. If any amount required to be paid to the City under this Chapter is not paid when due, the Tax Administrator may record in the office of the Lake County Recorder a certificate which specifies the amount of tax and penalties due, the name and address of the operator liable for the same, a statement that the Tax Administrator has complied with all provisions of this Chapter in the determination of the amount required to be paid and a legal description of the real property owned by the operator. From the time of the recording of the certificate, the amount required to be paid together with penalties constitutes a lien upon all real property in the County owned by the operator or thereafter acquired before the lien expires. The lien has the force, effect and priority of a tax lien and shall continue for ten (10) years from the filing of the certificate unless sooner released or otherwise discharged. c. Warrant for Collection of Tax. At any time within three (3) years after the recording of a certificate of lien under subsection 3-3.13b, the Tax Administrator may seek the issuance of a warrant through the Court to be directed to any sheriff or marshal for the enforcement of the lien and the collection of any tax and penalties required to be paid to the City under this Chapter. If issued by the Court, 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 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. d. Seizure and Sale. In lieu of seeking a warrant under paragraph c, at any time within the three (3) years after an assessment was issued or a certificate of lien was recorded under subsection 3-3.13b, the Tax Administrator may seek court authority for a writ for collection of the delinquent amount by seizing or cause to be seized any property, real or personal, of the operator and sale of any noncash or nonnegotiable property or a sufficient part of it at public auction to pay the amount of tax due together with any penalties and any costs incurred on account of the seizure and sale. Any seizure made to collect taxes due shall only be of property to the operator not exempt from execution under the provisions of the Code of Civil Procedure. (Ord. #4, S13; Ord. #85-98, S13)

a. Any operator who willfully fails to collect or cause to be collected the transient occupancy tax due from a transient is guilty of misdemeanor. b. Any operator who willfully fails to file or cause to be filed any return required by this Chapter, or who files or causes to be filed a false return, or who willfully fails or refuses to remit or cause to be remitted any tax collected, or who refuses to allow an audit to be conducted, is guilty of a misdemeanor. c. The commencement of criminal proceedings shall neither preclude nor abate administrative or civil actions to collect taxes due under this Chapter. d. Violations under this section are continuing violations and each day the violation continues constitutes a separate misdemeanor. e. Any operator violating any of the other mandatory provision of this Chapter shall be guilty of a misdemeanor. f. Violations shall be punishable as misdemeanors by a fine of not more than one thousand ($1,000.00) dollars or by imprisonment in the County jail for a period of not more than six (6) months or by both such fine and imprisonment. g. Non-Defense. It shall not be a defense to violations of this Chapter that the operator, including a resident manager, had forwarded any return due or tax collected to its principal or corporate headquarters, not that any failure to file or remit taxes was based on the direction or inaction of such principal or corporate headquarters. (Ord. #4, S14; Ord. #85-98, S14)

It is the intention of the City Council that as of the effective date of this section, it shall supersede the effectiveness of the Uniform Transient Occupancy Tax Article of the County of Lake, Lake County Ordinance Code Section 18-10A et seq. regarding such taxes in the City of Clearlake as implemented and adopted by Ordinance No. 1 of the City of Clearlake. (Ord. #4, S17)

If an operator who is liable for any tax or penalties under this Chapter sells or otherwise disposes of his business, his successor shall notify the Tax Administrator of the date of sale at least thirty (30) days before the date of sale or, if the decision to sell was made less than thirty (30) days prior to the actual sale, then immediately and shall withhold a sufficient portion of the purchase price to equal the amount of such tax or penalty until the selling operator produces a receipt from the Tax Administrator showing that the tax or penalty has been paid or a tax clearance certificate for the Tax Administrator stating that no tax or penalty is due. If the seller does not present a receipt or tax clearance certificate within thirty (30) days after such successor commences to conduct business, the successor shall deposit the withheld amount with the Tax Administrator pending settlement of the account of the seller. (Ord. #85-98, S15)

If the successor to the business fails to withhold a portion of the purchase price as required, it shall be liable to the City for the payment of the amount required to be withheld. Within thirty (30) days after receiving a written request from the successor for a tax clearance certificate stating that no tax or penalty is due, the Tax Administrator shall either issue the certificate or mail notice to the successor at its address as it appears on the records of the Tax Administrator of the estimated amount of the tax and penalty that must be paid as a condition of issuing the certificate. (Ord. #85-98, S16)