Chapter 3.40 — Uniform Transient Occupancy Tax

Ordinance 682 Affirmed by Gridley voters November, 1998

3.40.010 Short title.

3.40.020 Definitions.

3.40.030 Tax imposed; amount of tax.

3.40.040 Exemptions.

3.40.050 Duties of operator.

3.40.060 Transient occupancy registration certificate.

3.40.070 Nontransient occupancy registration certificate.

3.40.080 Reports and remittances.

3.40.090 Penalties and interest.

3.40.100 Failure of operator to report tax.

3.40.110 Appeals process.

3.40.120 Records to be kept for three years.

3.40.130 Refunds.

3.40.140 Action to collect.

3.40.150 Recording certificate of lien.

3.40.160 Priority and lien of tax.

3.40.170 Tax collector remedies.

3.40.180 Change in ownership.

3.40.190 Violation of this chapter is a misdemeanor.

3.40.200 Civil remedies.

3.40.210 Severability.

3.40.010 Short title.

This chapter shall be known as the "Uniform Transient Occupancy Tax Ordinance of the City of Gridley."

For the purposes of interpreting this chapter, the following definitions are intended to be controlling:

A. City: The City of Gridley, a municipal corporation and City within the State of California.

B. Day: Unless otherwise specified, means calendar day.

C. Delinquency: The failure to do any act required to be done pursuant to this chapter, at the time required by this chapter.

D. Lodging: Any building, portion of a building, reserved outdoor space, or other premises or area rented for use by transients for overnight accommodations. A "lodging" shall refer to the following premises, including but not limited to: Motel, hotel, inn, tourist home, bed and breakfast, rooming house, apartment house, mobilehome park, recreational vehicle park, campground, or parking area.

E. Occupancy: The use, or the right to use, any lodging.

F. Operator: The person who is proprietor of the lodging whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or in any other capacity. Where the operator performs his function through a managing agent of any type or character other than that of an employee, the managing agent shall also be deemed to be an operator for 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.

G. Person: A natural person acting as an individual or sole proprietorship, or any group or combination of natural persons, or any business entity such as a partnership, joint venture, association, club, corporation, trust, syndicate or other form of entity.

H. Rent: Any fee, charge, or other valuable consideration received by an operator as gross proceeds paid by a transient (defined below) for lodging. The "rent" shall be valued in money, whether it is received in money or in kind goods or services. "Rent" shall include all services of any kind or nature prior to any deduction for any reason whatever.

I. Tax: The transient occupancy tax imposed by this chapter.

J. Tax collector: The City Clerk of the City of Gridley or the Clerk’s designee.

K. Transient: Any person having occupancy or a lodging for a period of thirty (30) consecutive calendar days or less regardless of the form of agreement, license, permit or entitlement. Any person actually occupying a lodging 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 occupant, providing for a longer period of occupancy.

For the privilege of occupying a lodging within the City, each transient shall pay a tax in the amount of six percent (6%) of the rent charged by the operator. Such tax shall constitute a debt owed by the transient to the City and that debt can be satisfied only by payment in full to the operator or to the City. The transient shall pay the tax to the operator at the time that 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 termination of the lodging. If for any reason the tax due is not paid to the operator of the lodging, the tax collector may require that such tax be paid directly to the tax collector.

A. No tax shall be imposed upon 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.

B. No tax shall be imposed upon the occupants of a hotel, nor shall the provisions of this article apply to the owner or operator of a hotel that has had issued to it a "nontransient occupancy registration certificate" by the tax collector, as authorized by Section 3.40.070.

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. 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.

Within ten (10) days after commencing business, each operator of the lodging, located within the City, who rents occupancies to transients, shall register the lodging with the tax collector. The tax collector shall provide the operator with a "transient occupancy resignation certificate" which shall be posted at all times in a conspicuous place at the lodging. The certificate shall include, but is not limited to, the following information:

• A. The name of the operator;

• B. The address of the lodging;

C. The date upon which the certificate was issued;

D. The following statement: "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 tax collector for the purposes of collecting from transients the transient occupancy tax, and remitting said tax to the tax collector. This certificate does not authorize any person to conduct any unlawful business, to conduct any lawful business in any unlawful manner, or to operate a lodging without strict compliance with all local applicable laws, including, but not limited to, those requiring a permit from any board, commission, department, or office of this City. The certificate does not constitute a permit."

When the information furnished to the tax collector as required by Section 3.40.060 establishes that the operator of the hotel is in the business of renting to nontransients, the tax collector shall issue to the operator a "nontransient occupancy registration certificate". Such certificate shall be in the form of a stamped impression placed upon the operator’s business license certificate by the tax collector containing the words "nontransient occupancy registration certificate" with such additional legend in words or numerals as the tax collector shall determine necessary to give appropriate notice to hotel guests that the licensee has complied with the registration requirements of this chapter.

3.40.080 Reports and remittances.

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 tax collector, 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 occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the tax collector. The tax collector may establish shorter reporting periods for any certificate holder if he deems it necessary in order to insure collection of the tax and he may require further information in the return. 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 collector.

A. Late registrations. Any operator who shall fail to obtain a registration certificate within the time specified by this chapter shall pay a penalty of fifty dollars ($50.00) per certificate.

B. Original delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten percent (10%) of the amount of tax in addition to the amount of the tax.

C. Continued delinquency. Any operator who fails to remit any delinquent remittances 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 percent (10%) of the amount of tax in addition to the amount of tax and the ten percent (10%) penalty first imposed.

D. Fraud. If the tax collector determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty five percent (25%) of the amount of tax shall be added thereto in addition to the penalties stated in subparagraphs B and C of this section.

E. Interest. 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 one percent (1%) per month, or a fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid. If the last of any month falls on a Saturday, Sunday, or legal holiday, the additional one percent (1%) shall attach after 5:00 p.m. on the next business day.

F. Penalties and interests merged with tax. Every penalty imposed and such interest as accrues, pursuant to the provisions of this section shall become part of the tax required to be paid by the provisions of this chapter.

A. Tax collector to estimate tax due. In the event any operator fails or refuses to collect the tax imposed by this chapter, or to make, within the time provided in this chapter, any required report or any payment of the tax or any portion of the tax required by this chapter, the tax collector may make an estimate of the tax due. In making the estimate, the tax collector shall proceed in the manner the tax collector deems appropriate to attain facts and information on which to base an estimate of the tax due. In the absence of information which the tax collector deems most appropriate, it shall be deemed appropriate for the tax collector to estimate the tax by multiplying the number of days in the reporting period by the estimated number of lodging units customarily available from rent by the operator and then multiplying such result and number by the estimated average rent for the subject lodging units or similar lodging units and thereafter multiplying that result and the number by the tax rate. The foregoing shall not limit the tax collector in estimating the tax due but if utilized shall in and of itself be deemed reasonable.

B. Notice of tax due. The tax collector shall proceed to determine and assess against the operator the tax, interest and penalties due as provided by this chapter. The tax collector shall give a notice of the amount so assessed by mail or personal service addressed to all persons so assessed, at their last known addresses.

C. Tax is final if hearing not requested. The operator may make application in writing to the tax collector for hearing on the amount assessed within ten (10) calendar days after personal service of any notice of taxes, or within fifteen (15) days from the date of mailing of any notice of taxes due. 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 shall be immediately due and payable.

A. Hearing and dispute resolution. In the event an operator applies for a hearing within the time prescribed, the tax collector shall give at least fifteen (15) days written notice to the operator of the time and place of the hearing by mail or at least ten (10) days notice if by personal service. Such hearing may be held at any time within sixty (60) days of receipt of application of the hearing by the tax collector. At the hearing, the operator may appear and offer evidence why the specified tax, interest, or penalties should not be so established.

B. Determination of tax. Within thirty (30) days after the hearing, the tax collector shall determine the proper tax to be remitted and shall give written notice to the person by personal service or certified mail of the determination and amount of tax, interests and penalties. The total due shall be payable fifteen (15) days from mailing or serving of notice unless an appeal is made as provided in sub-section 3.40.110 C.

C. Appeal from initial hearing. Any operator aggrieved by any decision of the tax collector with respect to the amount of such tax, interests, and penalties, if any, may appeal to the City 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 City 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 City 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 receipt of the notice. No appeal may be taken without first having completed the initial hearing process set forth in subparts A and B.

D. Limitation of issues on appeal. The issues on appeal shall be limited to:

1. Operator named do the tax bill is not correct.

2. Estimated tax is based on incorrect number of units.

3. Estimated tax is based on incorrect lodging rates.

4. Estimated tax is based on incorrect occupancy rates.

E. Payment of tax a condition of appeal. After the determination of amount of tax due from any operator has been made following an initial hearing as specified in subpart A above, an operator must pay the taxes specified in the notice as a condition precedent to filing an appeal. Failure to pay such tax, together with penalties and interest thereon, if any, shall result in appeal being denied. In the event that it is ultimately determined that the whole or any part of the tax, interest and penalties was not due, the operator shall be entitled to a full refund of the amounts paid, but determined not to be due together with interest at the rate of nine percent (9%) per annum. The City may retain without interest those funds ultimately determined to be due to the City pursuant to this chapter.

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, 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, which records the tax collector shall have the right to inspect at all reasonable times.

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 the subparagraphs B and C or 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 collector within three (3) years of the date of payment. The claim shall be on forms furnished by the tax collector.

B. An operator may claim a refund or take as credit against taxes to be 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 collector 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 subparagraph A of this section, but only when the tax was paid by the transient directly to the tax collector, or when the transient, having paid the tax to the operator, establishes to the satisfaction of the tax collector that the transient has been unable to obtain a refund from the operator who collected the tax

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

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the operator to the City. 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, in any court of competent jurisdiction within Butte County, or within the county of residence of such person, at the option of the tax collector, for the recovery of such amount.

The tax collector may record a certificate of lien in the Office of the Butte County Recorder, within three (3) years after the amount required to be paid to the City under this chapter is not paid when due. The certificate shall specify the amount of tax, penalties and interest due, the name and address as it appears on the records of tax collector of the operators liable for the tax and the fact that the tax collector has complied with all provisions of this chapter and the determination of the amount required to be paid. From the time of filing for record, the amount required to be paid together with penalties and interest constitute a lien upon all real and personal property in the City owned by the operator or afterwards acquired by the operator prior to the expiration of the lien. The lien has the force, effect and priority of a judgment lien and shall continue for ten (10) years from the time of filing of their certificate unless sooner released or otherwise discharged. The lien may be extended for two (2) additional ten-year periods by re-recording the original lien. The lien may be recorded in any other county in which the operator may have property.

The amounts required to be paid by any operator under this chapter with penalties and interest shall be satisfied first in any of the following cases:

A. Whenever the person is insolvent;

• B. Whenever the person makes a voluntary assignment of his/her assets.

C. Whenever the estate of the person in the hands of the executors, administrators or heirs is insufficient to pay all the debts due from the deceased.

D. Whenever the estate and the effects of an absconding, concealed or absent person required to pay any amount under this chapter are levied upon by process of law.

E. Whenever a lien recorded hereunder is senior to other claimant interest.

The tax collector may utilize any remedy available for the collection of taxes to enforce collection of the tax under this chapter, including seizure and sale (Revenue and Taxation Code Section 2951 et seq.). 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. 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 chapter shall be liable to an action brought by the tax collector in the name of the City of Gridley, as plaintiff, for the recovery of the tax, penalties and interests and costs of collection, including but not limited to, attorneys and City Council fees.

When ownership of a lodging is transferred, the following duties arise.

A. Duty of transferor (seller). Prior to a change of ownership of a lodging, the transferor or operator of the lodging shall given written notice to the tax collector of the sale no later than fifteen (15) days before the close of escrow or the transfer of title. The transferor shall request and complete a final transient occupancy report form and pay upon close of escrow or upon delivery of title or transfer, whichever first occurs, all taxes, penalties and interest due in addition to any unsecured property taxes which are a statutory lien against the transferor.

B. Duty of transferee (buyer). Prior to the change in ownership of a lodging, the transferee or perspective operator of the lodging shall give written notice to the tax collector of the sale no later than fifteen (15) days before the close of escrow or the transfer of title. The transferee shall retain from the purchase price the amount for which the transferor is liable until the transferor produces a certificate from the tax collector stating that the taxes have been paid. If the tax is not paid as provided in this chapter, the tax collector shall request the retained amount from the transferee. The transferee shall pay the request within ten (10) days.

C. Effective notice. If proper notice is given by the parties to the transfer of ownership of a lodging, an audit may be performed by the tax collector in order to determine any tax liability of the transferred prior to the change of ownership. If proper notice was given, the City will release the transferee from any tax liability of the transferor prior to the change of ownership. If proper notice was given, the City will release the transferee from any tax liability arising prior to the change of ownership, even if no audit was conducted.

D. Constructive notice. This section shall be deemed constructive notice to all new owners of lodgings that they shall assume liability for all unpaid taxes when the tax collector is not properly notified as set forth in this section.

A. In addition to any civil remedy for the collection of taxes, any person violating any of the provisions of this chapter is guilty of a misdemeanor and shall be punishable by a fine of not more than five hundred dollars ($500.00) or by imprisonment in the county jail for a period of not more than six (6) months or by both fine and imprisonment.

B. Any operator or other person liable under the provisions of this chapter who fails or refuses to register as required in this chapter, or who fails or refuses to furnish any return required to be made, or fails or refuses to furnish any supplement return or other data required by the tax collector, or who renders a false or fraudulent return or claim is guilty of a misdemeanor and is punishable as set forth in subsection A of this section. Any person required to make, render, sign or verify any report or claim, who makes any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due required by this chapter to be made, is guilty of a misdemeanor and is punishable as set forth in subsection A of this section.

In addition to any and all other remedies provided herein, the tax collector may utilize any and all civil remedies available to the tax collector at law or in equity not otherwise prohibited by law or inconsistent with the provisions of this chapter.

If any provision, clause, sentence, or paragraph of this chapter or the application thereof to any person, establishment, or circumstance shall be held invalid, such invalidity does not affect the other provisions or application of the provisions of this chapter which can be given effect without the invalid provision or application, and to this end, the provisions of this chapter are hereby declared severable.