El Centro Municipal Code Art. IV Transient Occupancy Tax

Footnotes:

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State Law reference— Authority to levy, Rev. & T. Code, § 7280.

This article shall be known as the "Uniform Transient Occupancy Tax Ordinance of the City of El Centro."

(Code 1962, § 28-11; Ord. No. 65-3, § 1)

Except where the context otherwise requires, the definitions given in this section govern the construction of this article:

Hotel. "Hotel" means 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.

Occupancy. "Occupancy" means 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. "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 article and shall have the same duties and liabilities as his principal. Compliance with the provisions of this article by either the principal or the managing agent shall, however, be considered to be compliance by both.

Person. "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. "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.

Transient. "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 occupant providing for a longer period of occupancy. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequently to the effective date of this article may be considered.

(Code 1962, § 28-12; Ord. No. 65-3, § 1)

Cross reference— Rules of construction and definitions generally, § 1-3.

For the privilege of occupancy in any hotel, each transient shall pay a tax of ten (10) percent of the rent charged by the operator. Such tax constitutes a debt owed by the transient to the city. The transient shall pay the tax to the hotel operator when the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. Any tax remaining unpaid when the transient no longer occupies space in the hotel is immediately due and payable to the operator, and if not so paid may be collected by the city finance officer or his/her designee. No tax shall be imposed upon any person who is legally exempt from paying the tax, any federal officer or employee when on official business, any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty or any person who has signed an agreement in writing for occupancy in a hotel for more than thirty (30) days or who has actually occupied the hotel for more than thirty (30) days. 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 finance director or his/her designee.

(Code 1962, § 28-13; Ord. No. 65-3, § 1; Ord. No. 68-1; Ord. No. 74-11, § 1; Ord. No. 80-15, § 1; Ord. No. 83-20, § 1; Ord. No. 92-2, § 1; Ord. No. 92-4, § 1; Ord. No. 14-08, § 1, 4-15-14)

Each operator shall collect the tax imposed by this article 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 hereinafter provided.

(Code 1962, § 28-15; Ord. No. 65-3, § 1)

Within thirty (30) days after the effective date of this article or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register such hotel with the finance officer or his/her designee and obtain from him or her 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 of the hotel;

(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 uniform transient occupancy tax ordinance by registering with the finance officer or his/her designee for the purpose of collecting from transients, the transient occupancy tax and remitting said tax to the finance officer or his/her designee. 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."

(Code 1962, § 28-16; Ord. No. 65-3, § 1; Ord. No. 14-08, § 2, 4-15-14)

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 finance officer or his/her designee, make a return to the finance officer or his/her designee, on forms provided by him, 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 finance officer or his/her designee. The finance officer or his/her designee may establish shorter reporting periods for any certificate holder if he or she deems it necessary in order to insure collection of the tax, and he or she may require further information on 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 finance officer or his/her designee.

(Code 1962, § 28-17; Ord. No. 65-3, § 1; Ord. No. 14-08, § 3, 4-15-14)

(a) Original delinquency. Any operator who fails to remit any tax imposed by this article within the time required shall pay a penalty of ten (10) per cent 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) per cent of the amount of the tax in addition to the amount of the tax and the ten (10) per cent penalty first imposed.

(c) Fraud. If the finance officer or his/her designee determines that the nonpayment of any remittance due under this article 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 subsections (a) and (b) of this section.

(d) Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this article shall pay interest at the rate of one-half of one (½ of 1) per cent 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 herein required to be paid.

(Code 1962, § 28-18; Ord. No. 65-3, § 1; Ord. No. 14-08, § 4, 4-15-14)

If any operator shall fail or refuse to collect the tax and to make, within the time provided in this article, any report and remittance of such tax or any portion thereof required by this article, the finance officer or his/her designee shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the finance officer or his/her designee shall procure such facts and information as he or she is able to obtain upon which to base the assessment of any tax imposed by this article and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he or she shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this article. In case such determination is made, the finance officer or his/her designee 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. Such operator may, within ten (10) days after the serving or mailing of such notice, make application in writing to the finance officer or his/her designee 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 finance officer or his/her designee shall become final and conclusive and immediately due and payable. If such application is made, the finance officer or his/her designee 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 hearings, the operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing, the finance officer or his/her designee 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 section 25-65.

(Code 1962, § 28-19; Ord. No. 65-3, § 1; Ord. No. 14-08, § 5, 4-15-14)

Any operator aggrieved by any decision of the finance officer or his/her designee with respect to the amount of such tax, interest and penalties, if any, may appeal to the 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 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 council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Code 1962, § 28-20; Ord. No. 65-3, § 1; Ord. No. 14-08, § 6, 4-15-14)

(a) It shall be the duty of every operator liable for the collection and payment to the city of any tax imposed by this article 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.

(b) Appropriate records to be retained by the operator include monthly schedules of suite/room revenues, general ledger and revenue detail ledger, data that will substantiate occupancy rates as filed with TOT returns, schedules of exempt revenues with supporting documentation, daily room revenue summaries, historical records supporting the allocation of charges among rooms, meals and other services provided if applicable, registration cards/folios, sign-in registers and receipt books, daily room cleaning reports (also referred to as "maid reports"), the average quarterly daily room rate during the last three-year period, tax returns (corporation, partnership, etc.), and bank statements and bank deposit slips.

(c) The city shall have the right to inspect the records required to be maintained under this section pursuant to the audit provisions contained in section 25-69. If an operator fails to produce records for inspection as requested, the city council may issue an administrative subpoena pursuant to California Government Code section 37104 et seq.

(Code 1962, § 28-21; Ord. No. 65-3, § 1; Ord. No. 14-08, § 7, 4-15-14)

(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 article, it may be refunded as provided in subsections (b) and (c) 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 finance officer or his/her designee within three (3) years of the date of payment. The claim shall be on forms furnished by the finance officer or his/her designee.

(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 finance officer or his/her designee, that the person from whom the tax has been collected was not a transient; 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 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 but only when the tax was paid by the transient directly to the finance officer or his/her designee or when the transient, having paid the tax to this operator, establishes to the satisfaction of the finance officer or his/her designee that the transient has been unable to obtain a refund from the operator who collected the tax.

(Code 1962, § 28-22; Ord. No. 65-3, § 1; Ord. No. 14-08, § 8, 4-15-14)

Any tax required to be paid by any transient under the provisions of this article 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 article shall be liable to an action brought in the name of the city for the recovery of such amount.

(Code 1962, § 28-23; Ord. No. 65-3, § 1)

(a) The finance officer or his/her authorized agent may conduct periodic audits of any hotel operating within the city to determine compliance with this article. In conducting an audit, the city shall provide the operator with a written request to access and inspect the records required to be maintained pursuant to this article, including but not limited to those specified in section 25-66. The operator shall make all of the requested records available to the city for inspection during normal business hours within thirty (30) days of the request, unless the city and the operator agree in writing to a longer period. Such examination shall be conducted at the hotel being audited, unless the finance officer or his/her designee agrees to another location. If records produced other than tax returns, bank statements and bank deposit slips are detailed enough to allow certification of revenues tracking procedures, then these additional records may not be required for compliance. However, it is suggested that these types of records be available at the time of the production of records in the event they are required to complete the TOT audit or review. If an operator refuses to make such records available for inspection, the city may issue a subpoena pursuant to California Government Code section 37104 et seq. or utilize any other lawful means to access and inspect such records.

(b) If the operator fails or refuses to permit the city to inspect all of the records required to be maintained pursuant to this article after the city has issued a subpoena for the records, the city may pursue any administrative or civil remedy permitted by law.

(c) In the event an initial audit of an operator's records reveals that the operator has not maintained the records required to be maintained pursuant to this article, the finance director or his/her designee shall provide written notice to the operator of any violation. The tax administrator may thereafter conduct subsequent audits until it is determined that the operator has met all reporting requirements. The operator shall pay the city's reasonable costs incurred in conducting such subsequent audits.

(d) The operator shall notify the finance officer or his/her designee in writing at least ninety (90) days in advance of the operator's intent to close the hotel or transfer the ownership, operation or management of the hotel to a third party, so the finance officer or his/her designee may conduct an audit prior to such transfer. If the operator fails to provide the required notice, both the prior operator and the new operator shall be liable to the city for all taxes, penalties and interest that the finance director or his/her designee determines are due to the city.

(Code 1962, § 28-24; Ord. No. 65-3, § 1; Ord. No. 14-08, § 9, 4-15-14)

Editor's note— Ord. No. 14-08, § 9, adopted Apr. 15, 2014, amended § 25-69 in its entirety to read as herein set out. Section 25-69 was formerly titled "Violation of article a misdemeanor; penalties."