Indian Wells Municipal Code Ch. 3.14 Admissions Tax

For purposes of this Chapter, certain words and phrases shall be construed as follows:

"Admission charge"

shall mean any compensation provided to the operator for the right or privilege to enter, occupy, or use a seat or space in any facility, or to participate as a patron in any event(s). Admission charge shall not include complimentary, promotional or otherwise free-of-charge tickets or passes given by any operator, provided such complimentary tickets do not include consideration paid to the operator. Admission charge excludes rental of the facility to an operator, rental to concessionaires and barter/trade for goods and services. Admission charges shall not be structured to intentionally avoid collecting or minimizing tax due under this ordinance.

"Director"

shall mean the Director of Finance of the City or his or her designee.

"Facility"

shall mean and include any building, structure, place or location wherein or at which any form of event is held, carried on or conducted.

"Event"

means any entertainment, amusement or recreational activity, for which an admission charge is made, and shall include, but shall not be limited to: shows of all kinds, all sporting contests and athletic events, exhibitions, concerts, lectures, theatrical and musical performances, fairs, and festivals.

"Operator"

means any person conducting, operating, or maintaining in whole or in part as principal, agent, officer, employee or independent contractor for any event, or facility, as defined in this Chapter, taxable under this Chapter. For purposes of collecting the tax provided for in this Chapter, there are two classes of operators, as follows: (a) one who conducts, operates, or maintains an established fixed facility, wherein events are held, carried on or conducted in the operator's normal course of business, hereinafter referred to as a "fixed operator"; and (b) any other operator, hereinafter referred to as a "nonfixed operator."

"Patron"

means any person who pays or on account of whom is paid any admission charge for the right or privilege of being admitted to any facility, as a spectator to any event.

"City"

means the City of Indian Wells.

There is imposed a tax ("admission tax") on each admission charge to any event. The admission tax is a debt owed by the patron to the City, which debt shall be extinguished only by payment to the operator or the City. The admission tax shall be in addition to all other taxes or fees imposed by law. The admission tax shall be a maximum of 10% of the admission charge to an event. Notwithstanding the maximum amount of the admission tax heretofore set forth, for calendar year 2006 the admission tax shall be 5% of the admission charge to an event, and for calendar year 2007 and for each calendar year thereafter, the City Council is authorized to decrease by ordinance or resolution the admission tax, or to increase by ordinance or resolution the admission tax up to a maximum of 10% of the admission charge to an event. In order to decrease or increase the admission tax for any calendar year as permitted hereunder, the City Council shall do so on or before January 1st to take effect the following January 1st.

(Ord. 480, 2000; Ord. 515 § 1, 2002; Ord. 580 § 1, 2005)

Each operator shall collect the tax imposed by this Chapter from any patron when he or she pays an admission charge or purchases an admission ticket or a multiple event ticket. All taxes collected by operators pursuant to this Chapter shall be held in a separate bank account in trust for the benefit of the City until payment thereof is made to the City.

An application shall be filed with the Director for exemption from the tax imposed by this Chapter if the charge paid for the event is one specified by this Section. The Director may require such information in the application for the certificate of exemption, or in addition hereto, as will enable the Director to determine whether the admission charge for which the exemption is sought is eligible therefor.

The following admission charges shall be exempt when approved by the Director:

(a) Admission charges for events by bona fide non-profit organizations such as country clubs, social clubs, tennis clubs, governmental entities and schools;

(b) Admission charges paid by event sponsors. "Event sponsors" means persons who contribute goods, services or money towards the event and who in return: receive a non-exclusive license to use the event logo in conjunction with that persons own name or products; or who receive the right to name recognition as an official sponsor in the venue where the event is held; or receive the right to identify itself as an official sponsor of the event in advertising and promotional materials; or who are identified by the event operator in promotional materials as a sponsor if approved by the Director. Prior to the event the operator shall submit to the Director a list of all sponsors. The list must be approved by the Director to receive an exemption.

Prior to conducting, operating, or maintaining any event which is subject to this Chapter, each operator shall register with the Director and obtain from him or her an "admission tax collection certificate" to be at all times posted in a conspicuous place on the premises, or on file with the manager of the facility.

(a) Upon registration, a non-fixed operator shall make an advance deposit with the Director equal to the estimated amount of the tax to be collected by the operator as determined by the Director. In lieu of a cash deposit, an operator may provide a letter of credit in accordance with the City's letter of credit standards as maintained by the Director.

The certificate issued pursuant to Section 3.14.050 shall include, among other things, the following:

(a) The name of the operator;

(b) The address of the facility;

(c) The date upon which the certificate was issued;

(d) If issued to a non-fixed operator, the period of time during which the event, or if successive events on consecutive days, the total period for all events;

(e) "This admission tax collection certificate signifies that the person named on the face hereof has fulfilled the requirements of the City's admission tax regulations by registering with the Director for the purpose of collecting from patrons the admission tax and remitting said tax to the City. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner. This certificate does not imply that the business is either lawful or lawfully conducted and it does not constitute a permit."

All certificates issued pursuant to Section 3.14.050 shall be valid for the following periods:

(a) Permits issued to fixed operators shall be valid for one year, and shall be renewed annually thereafter in accordance with Section 3.14.080.

(b) Permits issued to non-fixed operators shall be valid for the period of each specific event for which the certificate is issued. A separate certificate shall be required for each individual event, except events which are scheduled to occur on consecutive days, in which case a single certificate shall be valid for all successive occurrences of the event.

The Director shall issue or renew a certificate under this Chapter except on a finding that:

(a) The applicant for such certificate or renewal has willfully failed to remit or has expressed his or her intent to fail to remit the tax imposed by this Chapter; or

(b) The applicant for such certificate or renewal has failed to supply the Director with any information or records required to be submitted pursuant to this Chapter.

No admission tax collection certificate may be transferred or assigned.

Each operator shall, on the date or within the time hereafter prescribed, make a return to the Director, on forms provided by the Director, of the total admissions charges collected and received and the amount of tax collected from patrons. At the time the return is filed, the full amount of any tax collected and due shall be remitted to the Director. Those amounts not paid shall immediately become delinquent. The Director may establish special reporting periods for any operator if the Director deems it necessary to assure collection of the tax, and the Director may require further information to be included in the return. Returns and payments are due and payable immediately upon cessation of business by the operator for any reason.

The regular reporting and remittance period shall be as follows:

(a) For each fixed operator, on or before the last day of the month following the close of the prior month, or at the close of any shorter reporting period that may be established by the Director;

(b) For each non-fixed operator, not later than 10 days after the conclusion of the event, or within such shorter reporting period that may be established by the Director. The Director shall calculate any additional tax due that exceeds the amount of the nonfixed operator's deposit, and that amount shall be immediately paid by the operator to the City. If reconciliation of the deposit amount with the return indicates a refund is due, it will be refunded to the operator within 15 days.

The Director, whenever he or she deems it necessary to assure faithful compliance with this Chapter, may require any operator subject to the provisions of this Chapter to deposit with the Director security for payment of taxes. The amount of the security shall be fixed by the Director but shall not be greater than twice the estimated liability for the period for which accounting and return are required under Section 3.14.100 as chosen by the Director. Such security may be in the form of cash, cashiers' check made payable to the City, certified check made payable to the City, or a letter of credit (LC) inuring to the benefit of the City, which LC shall be executed in accordance with the City's letter of credit standards as maintained by the Director.

(a) Tax Returns and Remittance of Deficiency Determinations.

(1) Original Delinquency. Any operator who fails to file a tax return or pay a deficiency determination within the time required shall pay a penalty of 10% of the delinquent tax in addition to the amount of the tax.

(2) Continued Delinquency. Any operator who fails to file a tax return or pay a deficiency determination on or before a period of 30 days following the date on which it first became delinquent shall pay a second delinquency penalty of 15% of the amount of delinquent tax in addition to the amount of tax and the 10% penalty first imposed.

(3) Interest shall accrue as prescribed in subsection (c) below.

(b) Tax Returns and Deficiency Determinations.

(1) Negligence. If the Director determines that any tax found to be due under this Chapter or the delinquent filing of a tax return is due to negligence, a penalty of 15% of the amount of delinquent tax shall be added thereto in addition to any other penalties that may be imposed.

(2) Fraud. If the Director determines that any tax found to be due under this Chapter is due to fraud or intent to avoid or reduce the amount of tax collected, or the payment of tax, a penalty of 50% of the delinquent tax shall be added thereto in addition to any other penalties which may be imposed.

(3) Interest shall accrue as prescribed in subsection (c) below.

(c) 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 and one-half percent per month or fraction thereof on the amount of tax, exclusive of penalties, from the last day of the month following the monthly period for which the amount or any portion thereof should have been paid until the date of payment.

(d) Relief from Penalties and Interest.

(1) Excusable Delay. If the Director finds that an operator's failure to make a timely return or payment is due to reasonable cause and circumstances beyond the operator's control, and occurred, notwithstanding the exercise of ordinary care and the absence of willful neglect, the Director may waive the penalty provided for in subsection (1) above. Any person seeking to be relieved of the penalty shall file with the Director a Statement under penalty of perjury setting forth the facts upon which the claim for relief is based.

(e) Penalties Merged with Tax. Every penalty and such interest as accrues under the provisions of this Section shall become part of the tax herein required to be paid.

If any operator required to collect and remit the tax imposed by this Chapter fails to file and return a remittance, the Director 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 Director obtains such facts and information on 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 or she shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this Chapter.

If the Director has reasonable cause to believe the return or returns of the amount of tax required to be paid to the City by any operator are erroneous, he or she shall compute and determine the amount required to be paid upon the basis of (i) facts contained in the return or returns, (ii) other substantial evidence, or (iii) application of standard accounting techniques. A deficiency determination for one period shall not constitute a release or waiver for other deficiencies in the same or another period.

In making a determination pursuant to Sections 3.14.110 and 3.14.120, the Director may offset any overpayments for a period or periods, against penalties, and against interest on underpayments. Interest on overpayments (for purposes of offsetting as in this Section provided) and underpayments shall be computed in the manner set forth in Section 3.14.120.

(Ord. 480, 2000)

The Director shall give to the operator written notice of any determinations made pursuant to Section 3.14.110 and 3.14.120. This notice may be served personally or by depositing in the United States postal service, postage pre-paid, and addressed to the operator at his or her address as it appears in the records of the Director. In case of service made by mail of any notice required under this Chapter, the service is complete at the time of deposit of the notice.

Any operator served pursuant to Section 3.14.160 may within 15 days after service or mailing such notice, make application in writing to the Director for a hearing by the Director to review the amounts determined and assessed under Sections 3.14.110 and 3.14.120. 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 Director shall become final and conclusive and immediately due. Any operator against whom interest or penalties have been assessed pursuant to Section 3.14.120 may make an application in writing for a hearing with the Director to review the amounts of tax owing and accrued penalties and interest thereon within 30 days after notice of delinquency. If such application is made, the Director shall give not less than five days written notice in the manner prescribed by Section 3.14.160 to the operator to show cause at a time and place fixed in such notice why such amount specified therein should not be assessed including such tax interest and penalties, if any. 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 Director shall determine the proper tax together with interest and penalties thereon to be remitted and shall thereafter give written notice thereof to the operator in the manner prescribed in Section 3.14.160. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in Section 3.14.180.

Any operator aggrieved by any hearing decision of the Director may appeal to the City Council. Said appeal must be made within 15 days of the hearing decision. The decision of the City Council shall be final and conclusive. Any amounts determined shall be due and payable on the service of notice of the decision, which shall be served in the manner set forth in Section 3.14.160.

Every operator liable for the collection and payment to the City of any tax imposed by this Chapter shall keep and preserve all records sufficient in nature to determine the amount of such tax as the operator may have been liable for the collection of payment to the City. Records which shall be kept shall include, but are not limited to, records of admission on a daily/subscription basis by number and price and all cash register tapes and sales records. The Director may examine the books, papers, records and equipment of any operator liable for the tax imposed by this Chapter and may investigate the character of the business of the operator in order to verify the accuracy of any return made, or if no return is made by the operator, to ascertain and determine the amount required to be paid.

Any tax required to be paid by any patron under the provisions of this Chapter shall be deemed a debt owed by the patron 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.

Section 3.14.010 and 3.14.030 through 3.14.220 may be amended by the City Council to further the purposes of this Chapter. The City Council may adopt regulations to implement this ordinance. Neither Section 3.14.040, relating to tax exemptions, nor Section 3.14.020, except as specifically provided therein relating to a change in the amount of tax, may be amended by the City Council.

In addition, the following provisions within the definition of "admission charge" may not be amended:

(a) Shall not include complimentary, promotional or otherwise free-of-charge tickets or passes given by any operator, provided such complimentary tickets do not include consideration paid to the operator;

(b) Excludes rental of the facility to an operator, rental to concessionaires and barter/trade for goods and services.

(Ord. 480, 2000)