Diamond Bar Municipal Code Ch. 3.16 Transient Occupancy Tax

Footnotes:

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State Law reference— Occupancy tax, Revenue and Taxation Code § 7280 et seq.

The ordinance codified in this chapter shall be known as, and may be cited as the Uniform Occupancy Tax Ordinance.

(Ord. No. 14(1989), § 2(4.72.010), 6-27-89)

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Hotel means any structure or any portion of any such 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, lodginghouse, roominghouse, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.

Occupancy means the use or possession, or the right to the use or possession, of any rooms or portion thereof or other living space in any 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 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, however, be considered to be compliance by both.

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, 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 collector means the city treasurer.

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 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 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 Ordinance No. 14(1989) may be considered.

(Ord. No. 14(1989), § 2(4.72.020), 6-27-89)

Cross reference— Definitions generally, § 1.00.070.

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 14 percent of the rent charged by the operator. This tax constitutes a debt owed by the transient to the city which is extinguished only by payment to the operator or to the city.

(Ord. No. 14(1989), § 2(4.72.040), 6-27-89; Ord. No. 03(2018), § I, 11-6-18)

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 collector may require the transient to pay such tax directly to the tax collector.

(Ord. No. 14(1989), § 2(4.72.050), 6-27-89)

If a proper claim for exemption is made a tax shall not be imposed upon:

(1) Any person as to whom, or any occupancy as to which, it is beyond the power of the city to impose the tax provided in this chapter.

(2) Any federal officer or employee or officer or employee of this state, 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.

(Ord. No. 14(1989), § 2(4.72.060), 6-27-89)

The tax collector shall prepare and furnish to the operators of hotels who have registered, as required by sections 3.16.090—3.16.110 of this chapter, forms by which transients may claim exemption from the payment of the tax. An exemption shall not be granted to any transient except upon a claim therefor made at the time rent is collected and under penalty of perjury upon the form supplied by the tax collector.

(Ord. No. 14(1989), § 2(4.72.070), 6-27-89)

Every operator liable for the collection and payment to the city of any tax imposed by this chapter shall keep and preserve, for not less than four years, all records which may be necessary to determine the amount of such tax for the collection of, and payment of, to the city he may be or may become liable. The tax collector may inspect these records at any reasonable time. The operator shall make such records available at any reasonable time requested by the tax collector.

(Ord. No. 14(1989), § 2(4.72.090), 6-27-89; Ord. No. 08(2006), § 1, 10-17-06)

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. The operator of a hotel shall not 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.

(Ord. No. 14(1989), § 2(4.72.080), 6-27-89)

Within 30 days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register the hotel with the tax collector. Upon such registration the tax collector shall issue to such operator a transient occupancy registration certificate.

(Ord. No. 14(1989), § 2(4.72.100), 6-27-89)

The operator shall post, and at all times keep posted in a conspicuous place on the premises of the hotel, the transient occupancy registration certificate.

(Ord. No. 14(1989), § 2(4.72.110), 6-27-89)

The transient occupancy certificate shall, among other things, state the following:

(1) The name of the operator.

(2) The address of the hotel.

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

(4) This transient occupancy registration certificate signifies that the person named on the face of this certificate has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the tax collector for the purpose of collecting from transients the transient occupancy tax and remitting the tax to the tax collector. 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.

(Ord. No. 14(1989), § 2(4.72.120), 6-27-89)

Each operator, on or before the last day of the month following the close of the calendar quarter, or at the close of any other reporting period which may be established by the tax collector, shall make a return to the tax collector, on forms provided by him, of the total rents charged and received and the amount of tax collected for transient occupants.

(Ord. No. 14(1989), § 2(4.72.130), 6-27-89)

At the time the return is filed, the operator shall remit the full amount of the tax collected to the tax collector. The tax collector may establish shorter, longer, or other reporting periods for any certificate holder if he deems it necessary or expedient in order to ensure collection of the tax. The tax collector may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason.

(Ord. No. 14(1989), § 2(4.72.140), 6-27-89)

Every operator shall hold in trust for the account of the city, until payment thereof is made to the tax collector, all taxes collected by such operator.

(Ord. No. 14(1989), § 2(4.72.150), 6-27-89)

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 unpaid tax in addition to the amount of the tax.

(Ord. No. 14(1989), § 2(4.72.160), 6-27-89)

Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of unpaid tax, in addition to the amount of the tax and the ten percent penalty first imposed.

(Ord. No. 14(1989), § 2(4.72.170), 6-27-89)

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 1½ percent per month or fraction thereof on the amount of unpaid tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

(Ord. No. 14(1989), § 2(4.72.190), 6-27-89)

If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25 percent of the amount of the tax shall be added thereto in addition to the penalties stated in sections 3.16.150 and 3.16.160.

(Ord. No. 14(1989), § 2(4.72.180), 6-27-89)

Every penalty imposed and such interest as accrues under the provisions of this chapter shall become a part of the tax required to be paid in this chapter.

(Ord. No. 14(1989), § 2(4.72.200), 6-27-89)

If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter, any report and remittance of such tax or any portion thereof required by this chapter, the tax collector shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the tax collector shall procure 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 the operator the tax, interest and penalties provided for by this chapter.

(Ord. No. 14(1989), § 2(4.72.210), 6-27-89)

If the tax collector makes a determination pursuant to sections 3.16.150—3.16.230, he shall give a notice of the amount so assessed, either by serving such notice personally or by depositing it in the United States mail, postage prepaid, addressed to the operator so assessed at his last known place of business.

(Ord. No. 14(1989), § 2(4.72.220), 6-27-89)

Within ten days after the serving upon any operator of such notice, such operator may apply in writing to the tax collector 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 tax collector shall become final and conclusive and immediately due and payable.

(Ord. No. 14(1989), § 2(4.72.230), 6-27-89)

If such application is made, the tax collector shall give not less than five days' written notice in the manner prescribed in this chapter to the operator to show cause at a time and place fixed in the notice why the 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 tax collector shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed in this section of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in sections 3.16.240—3.16.290.

(Ord. No. 14(1989), § 2(4.72.240), 6-27-89)

Any operator deeming himself aggrieved by any decision of the tax collector with respect to the amount of the tax, interest and penalties, if any, may appeal to the board by filing a notice of appeal with the clerk of the board within 15 days of the serving or mailing of the determination of the tax due.

(Ord. No. 14(1989), § 2(4.72.250), 6-27-89)

Upon the filing of a notice of appeal, the board shall fix a time and place for hearing such appeal, and the clerk of the board shall give not less than five days' notice in writing, either personally or by United States mail, postage prepaid.

(Ord. No. 14(1989), § 2(4.72.260), 6-27-89)

The board may appoint a referee to take testimony at any hearing provided for in sections 3.16.240—3.16.290 and to report his findings and recommendations to the board. Neither the tax collector nor any officer or employee in the office of the tax collector may be appointed referee.

(Ord. No. 14(1989), § 2(4.72.270), 6-27-89)

If the board appoints a city officer or city employee to act as referee, he shall serve as such without any additional compensation. All time spent as a referee shall be considered as time spent by such officer or employee in performing the duties of his position.

(Ord. No. 14(1989), § 2(4.72.280), 6-27-89)

At the time set for the hearing, or at the date to which the hearing may be continued by the board or referee, the board or referee shall hear the appellant and any other competent witnesses and decide whether the determination of the tax collector was correct or not, and if not what tax, interest or penalties, if any, are due to the city from the appellant. The board or referee may place any witnesses, including the appellant, under oath.

(Ord. No. 14(1989), § 2(4.72.290), 6-27-89)

The board shall determine from the evidence or from the report of the referee, what tax, interest or penalties, if any, are due to the city from the appellant. This decision shall be final and conclusive. The clerk of the board shall serve a copy of the decision upon the appellant as provided in section 3.16.250. Any amount due shall be immediately due and payable upon the service of the notice.

(Ord. No. 14(1989), § 2(4.72.300), 6-27-89)

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, the operator so paying may have such amount applied to subsequent taxes due, or it may be refunded as provided in sections 3.16.300—3.16.340 if, within three years after the date of payment, the operator files with the tax collector in writing a claim therefor. In such claim the operator shall state, under penalty of perjury, the specific grounds and specific facts upon which the claim is founded. The claims shall be on forms furnished by the tax collector.

(Ord. No. 14(1989), § 2(4.72.310), 6-27-89)

An operator may take as credit against subsequent taxes 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 collector that the person from whom the tax was collected was not a transient, and 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.

(Ord. No. 14(1989), § 2(4.72.320), 6-27-89)

When an operator establishes a right to a credit as provided in sections 3.16.300—3.16.340 and also shows to the satisfaction of the tax collector either that he no longer is operating a hotel in the unincorporated territory of the city or will cease such operation before the credit can be applied, and files a proper claim therefor, in lieu of such credit, the city shall refund to such operator the amount overpaid, paid more than once or erroneously or illegally collected or received.

(Ord. No. 14(1989), § 2(4.72.330), 6-27-89)

A transient or other guest of a hotel 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 section 3.16.300, if the tax was paid by the transient or other guest directly to the tax collector, or if the transient or other guest has paid the tax to the operator, and establishes to the satisfaction of the tax collector that the transient or other guest has been unable to obtain a refund from the operator who collected the tax.

(Ord. No. 14(1989), § 2(4.72.340), 6-27-89)

A refund shall not be paid pursuant to sections 3.16.300—3.16.340 unless the claimant establishes his right thereto by written records showing that he is entitled thereto.

(Ord. No. 14(1989), § 2(4.72.350), 6-27-89)

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.

(Ord. No. 14(1989), § 2(4.72.360), 6-27-89)

(a) Pursuant to Revenue and Taxation Code § 7283.5, and as that section may from time to time be amended, a purchaser, transferee, or other person attempting to obtain ownership of a transient occupancy facility, may request in writing from the tax collector the issuance of a tax clearance certificate stating the amount of tax and any accrued penalties and interest due and owing, if any.

(b) The tax collector shall, within 90 days of the receipt of the written request for a tax clearance certificate issue the tax clearance certificate, or may conduct an audit of the subject transient occupancy facility. Any such audit must be completed within 90 days after the date the records of the subject transient occupancy facility have been made available to the tax collector and a tax clearance certificate issued within 30 days of the completion of the audit.

(c) If following an audit the tax collector determines that the current operator's records are insufficient to assess the amount of tax due and owing, the tax collector shall, within 30 days of making that determination, notify the prospective purchaser, transferee or other person that a tax clearance certificate will not be issued.

(d) If the tax collector does not comply with the request for a tax clearance certificate, the purchaser, transferee or other person that obtains ownership of the transient occupancy facility shall not be liable for any transient occupancy tax obligation incurred prior to the date of the purchase or transfer of the property.

(e) The tax clearance certificate shall state the following:

(1) The amount of tax, interest and penalties then due and owing;

(2) The period of time for which the tax clearance certificate is valid; and

(3) That the purchaser, transferee, or other person may rely upon the tax clearance certificate as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.

(f) Any purchaser, transferee, or other person who does not obtain a tax clearance certificate under this section, or who obtains a tax clearance certificate that indicates that tax is due and owing and fails to withhold, for the benefit of the county, sufficient funds in the escrow account for the purchase of the property to satisfy the transient tax liability, shall be held liable for the amount of tax due and owing.

(Ord. No. 08(2006), § 2, 10-17-06)

Any tax collected from a transient by an operator pursuant to the provisions of this chapter which has not been paid to the city shall be deemed a debt owed by the operator to the city.

(Ord. No. 14(1989), § 2(4.72.370), 6-27-89)

The tax collector, in the name of the city, as plaintiff, may bring suit for the recovery of any tax, interest or penalty due to the city pursuant to the provisions of this chapter.

(Ord. No. 14(1989), § 2(4.72.380), 6-27-89)

Every person is guilty of a misdemeanor who:

(1) Fails or refuses to register as required by this chapter.

(2) Fails or refuses to furnish any return required to be made, or fails or refuses to furnish a supplemental return or other data required by the tax collector.

(3) Renders a false or fraudulent return.

(4) If required by this chapter to make, render, sign or verify any report or claim, makes any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due.

(5) Collects the tax due pursuant to this chapter from any transient and fails to pay the same to the city.

(6) Violates in any way any other provision of this chapter.

(Ord. No. 14(1989), § 2(4.72.390), 6-27-89)