Imperial Beach Municipal Code Ch. 3.24 Transient Occupancy Tax

The ordinance codified in this chapter shall be known as the "Uniform Transient Occupancy Tax Ordinance of the City."

(Prior code § 1911; prior code Am. No. 35, 1965)

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

"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, lodginghouse, roominghouse, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location other than in a mobile home park, or other similar structure or portion thereof.

"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"

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 or her 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 or her 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.

"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 Administrator"

means the City Manager or designee.

"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 the ordinance codified in this chapter may be considered.

(Prior code § 1912; prior code Am. No. 35, 1965; Ord. 456 § 3, 1979; Ord. 2001-963 § 1)

A. For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 14% of the rent charged by the operator.

B. The tax constitutes a debt owed by the transient to the City which is extinguished only by payment to the operator or to the City. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the Tax Administrator may require that such tax shall be paid directly to the Tax Administrator.

(Ord. 803 § 2, 1990; Ord. 2022-1216 § 2)

A. No tax shall be imposed upon the following:

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 or State of California officer or employee when on official business;

3. Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.

B. 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.

(Prior code § 1914; prior code Am. No. 35, 1965)

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. 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. A duplicate of this receipt shall be kept by the operator in accordance with Section 3.24.070.

B. 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 provided in this chapter.

C. If the operator collects the rent but fails to collect the tax imposed by this chapter for any reason, the operator shall be liable for such tax.

(Prior code § 1915; prior code Am. No. 35, 1965; Ord. 2001-963 § 2)

A. Within 30 days after commencing business each operator of any hotel renting occupancy to transients shall register the hotel with the Tax Administrator and obtain from him or her a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises.

B. The 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 hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the Tax Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a hotel without strictly complying with all local applicable laws, including, but not limited to, those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit."

(Prior code § 1916; prior code Am. No. 35, 1965)

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 years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator shall have the right to inspect at all reasonable times.

(Prior code § 1921; prior code Am. No. 35, 1965)

A. Each operator shall, on or before the last day of the month following the prior month, make a return to the Tax Administrator, on forms provided by the Tax Administrator, of the total rents charged and received and the amount of tax collected for transient occupancies.

B. At the time the return is filed, the full amount of the tax collected shall be remitted to the Tax Administrator.

C. Each operator shall notify the Tax Administrator immediately upon cessation of business for any reason. The operator shall also make a return and remit all taxes due and shall make books and records available to the Tax Administrator immediately upon cessation of business for any reason.

D. 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.

E. If an operator is delinquent in making a report, remitting tax, notifying the Tax Administrator, or in any other way more than one time in any 12-month period, the Tax Administrator may, in his or her sole discretion:

1. Establish a reporting period of less than 30 days for that operator, and/or

2. Require the operator to post a bond with the City to guarantee remittance of taxes collected pursuant to this chapter.

(Ord. 803 § 2, 1990; Ord. 2001-963 § 3)

A. If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter or other reporting period that may be established by the Tax Administrator, any report and remittance of the tax or any portion thereof required by this chapter, the Tax Administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base an estimate of the tax due. As soon as the Tax Administrator procures facts and information 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, the Tax Administrator shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter.

B. In case such determination is made, the Tax Administrator 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 or her last known place of address. Such operator may within 10 days after the service or mailing of such notice make application in writing to the Tax Administrator 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 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 days' written notice in the manner prescribed in this section 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.

C. 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 Administrator 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 Section 3.24.100.

(Prior code §1919; prior code Am. No. 35, 1965; Ord. 2001-963 § 4)

Any operator wishing the appeal any decision of the Tax Administrator with respect to the suspension or revocation of a registration certificate or the amount of transient occupancy tax, interest and penalties, if any, may appeal to the City Council by filing a notice of appeal with the City Clerk within 15 days of the serving or mailing of the Tax Administrator's decision or determination. 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 the operator's last known address. The findings of the Council shall be final and conclusive and shall be served upon the operator in the manner prescribed in Section 3.24.090 for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice of council's determination.

(Prior code § 1920; prior code Am. No. 35, 1965; Ord. 2001-963 § 5)

A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been errone-ously or illegally collected or received by the City under this chapter, 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 Tax Administrator in accordance with Chapter 1.10 of this code. The claim shall be on forms furnished by the Tax Administrator.

B. An operator may claim a refund or take as credit against taxes collected and remitted the amount over-paid, paid more than once, or erroneously or illegally collected or received when it is established in a manner prescribed by the Tax Administrator 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 over-paid or paid more than once or erroneously or illegally collected or received by the City by filing a claim in the manner provided in subsection A of this section, but only when the tax was paid by the transient directly to the Tax Administrator or when the transient, having paid the tax to the operator, establishes to the satisfaction of the Tax Administrator that the transient has been unable to obtain a refund from the operator who collected the tax.

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

(Prior code § 1922; prior code Am. No. 35, 1965; Ord. 2001-974 § 3)

A. Responsibility. 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 in the name of the City for the recovery of such amount.

B. Recording Certificate—Lien. If any amount required to be paid to the City under this chapter is not paid when due, the Tax Administrator may within three years after the amount is due file for record in the office of the County Recorder a certificate specifying the amount of tax, penalties and interest due, the name and address as it appears on the records of the Tax Administrator of the operator liable for the same and the fact that the Tax Administrator has complied with all provisions of this chapter in the determination of the amount required to be paid. From the time of the filing for record, the amount required to be paid together with penalties and interest constitutes a lien upon all real property in the County owned by the operator or afterwards and before the lien expires acquired by the operator. The lien has the force, effect and priority of a judgment lien and shall continue for 10 years from the time of filing of the certificate unless sooner released or otherwise discharged.

C. Priority and Lien of Tax. 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:

1. Whenever the person is insolvent;

2. Whenever the person makes a voluntary assignment of his or her assets;

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

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

D. Warrant for Collection of Tax. At any time within three years after any operator is delinquent in the payment of any amount required in this chapter to be paid or within three years after the last recording of a certificate of lien under subsection B of this section, the Tax Administrator may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the City under this chapter. The warrant shall be directed to any chief of law enforcement, marshal or constable and shall have the same effect as a writ of execution. The warrant shall be levied and sale made pursuant to it in the same manner and with the same effect as a levy of and a sale pursuant to a writ of execution. The Tax Administrator may pay or advance to the chief of law enforcement, marshal or constable, the same fees, commissions and expenses for their services as are provided by law for similar services pursuant to a writ of execution. The Tax Administrator, and not the court, shall approve the fees for publication in a newspaper.

E. Successor's Liability—Withholding by Purchaser. If any operator liable for any amount under this chapter sells or otherwise disposes of his or her business or quits the business, his or her successor or assignee shall notify the Tax Administrator of the date of sale and withhold a sufficient portion of the purchase price equal to the amount of such tax or penalty until the former owner or selling operator produces a receipt from the Tax Administrator showing that the tax or penalty has been paid or produces a tax clearance certificate stating that no amount is due.

If the selling operator does not present a receipt or tax clearance certificate within 30 days after such successor commences to conduct business, the successor shall deposit the withheld amount with the Tax Administrator pending settlement of the accounting of the seller.

F. Liability of Purchaser—Release. If the purchaser of a hotel fails to withhold from the purchase price as required, he or she shall become personally liable for the payment of the amount required to be withheld by him or her to the extent of the purchase price, valued in money. Within 30 days after receiving a written request from the purchaser for a tax clearance certificate, the Tax Administrator shall either issue the certificate or mail notice to the purchaser at his or her address as it appears on the records of the Tax Administrator of the amount that must be paid as a condition of issuing the certificate.

(Prior code § 1923; prior code Am. No. 35, 1965; Ord. 2001-963 § 6)

A. Any operator who fails to remit any tax collected pursuant to this chapter shall be subject to prosecution under Section 424 of the Penal Code of the State of California.

B. Any operator or other person who fails or refuses to register as required in this chapter, or to furnish any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the Tax Administrator, or who renders a false or fraudulent return or claim, or who violates any of the other provisions of this chapter shall be guilty of a misdemeanor, and is punishable as provided in Chapter 1.12 of this code.

C. 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 Chapter 1.12 of this code.

(Prior code § 1924; prior code Am. No. 35, 1965; amended during 1991 republication; Ord. 2001-963 § 7)

A. Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% 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 30 days following the date in which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

C. Audit Deficiency. If, upon audit by the City, an operator is found to be deficient in its return or remittance, or both, the Tax Administrator shall immediately invoice the operator for the amount of the net deficiency plus a penalty of 10% of the net deficiency. If the operator fails or refuses to pay the deficient amount and applicable penalties within 14 days of the date of the invoice, an additional penalty shall be imposed at the rate of one percent per day of the net deficiency, not to exceed 10%.

D. Fraud. If the Tax Administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections A and B 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-half of one percent 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.

F. 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 required to be paid under this chapter.

(Prior code § 1918; prior code Am. No. 35, 1965; Ord. 2001-963 § 8)

The Tax Administrator or any authorized agent of the City may conduct periodic audits of the books and records of any operator to determine compliance with this chapter. The audit shall be conducted upon the premises of the operator's place of business within the City, during normal business hours, and shall be conducted by a firm of independent public accountants selected by the Tax Administrator. The City Council shall from time to time approve, by resolution, standard hourly fees to be charged by such public accountants. In the event the independent public accountants determine that the questioned report understated the tax due by more than 10%, the cost of such audit shall be borne by the operator and paid to the City within 10 days of the Tax Administrator billing the operator for such audit expense. Such audit expense shall be a debt owed to the City and subject to the provisions of Section 3.24.120. A finding that the report understated the tax due by more than 10% shall constitute a conclusive finding of fraud pursuant to Section 3.24.140(D), and the operator shall be liable for the penalty provided for by said Section 3.24.140(D). The determination made by the independent public accountant shall be subject to an appeal by the operator pursuant to Section 3.24.100.

(Ord. 2010-1102 § 1)

A. Whenever any operator fails to comply with any provision of this chapter relating to occupancy tax or any rule or regulation of the Tax Administrator relating to occupancy tax prescribed and adopted under this chapter, the Tax Administrator may suspend or revoke the registration certificate held by the operator.

B. In case such a decision is made to suspend or revoke the certificate, the Tax Administrator shall give notice of such suspension or revocation by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator at the last known address for the operator. The operator may within 10 days after the service or mailing of such notice make application in writing to the Tax Administrator for a hearing on the suspension or revocation. If application by the operator for a hearing is not made within the time prescribed, the suspension or revocation shall become final and conclusive. If such application is made, the Tax Administrator shall give not less than five days' written notice to the operator in the manner prescribed in this section as to the time and place fixed for the hearing.

C. At such hearing, the operator may appear and offer evidence why such suspension or revocation should not occur. After such hearing, the Tax Administrator shall determine whether suspension or revocation shall occur and provide written notice of such determination to the operator within 10 days of the hearing.

D. The Tax Administrator shall not issue a new certificate after a revocation unless the Tax Administrator is satisfied that the former holder of the certificate will comply with the provisions of this chapter relating to the occupancy tax and regulations of the Tax Administrator.

(Ord. 2001-963 § 9)

During any period of time during which a registration certificate has not been issued or is suspended, revoked or otherwise not validly in effect, the Tax Administrator may require that the hotel be closed.

(Ord. 2001-963 § 10)

If any person or operator is delinquent in the remittance or payment of the amount required to be remitted or paid to the City or in the event a determination has been made against the person or operator for the remittance of tax and payment of the penalty, the City may, within three years after the tax obligation became due, give notice thereof personally or by registered mail to all persons, including the State or any political subdivision thereof, having in their possession or under their control any credits or other personal property belonging to the taxpayer. After receiving the withholding notice, the person so notified shall make no disposition of the taxpayer's credits, other personal property or debts until the City consents to a transfer or disposition or until 60 days elapse after the receipt of the notice, whichever expires earlier. All persons, upon receipt of said notice, shall advise the City immediately of all such credits, other personal property or debts in their possession, under their control or owing by them. If such notice seeks to prevent the transfer or other disposition of a deposit in a bank or other credits or personal property in the possession or under the control of the bank, to be effective the notice shall be delivered or mailed to the branch or office of such bank at which such deposit is carried or at which such credits or personal property is held. If any person so notified makes transfer or disposition of the property or debts required to be held hereunder during the effective period of the notice to withhold, that person shall be liable to the City to the extent of the value of the release up to the amount of the indebtedness owed by the taxpayer to the City.

(Ord. 2001-963 § 12)