Irvine Municipal Code Ch. 4 Transient Occupancy

The definitions given in this section govern the construction of this chapter. 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: 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.

"Hotel" does not mean any of the following: Any hospital, sanitarium, medical clinic, convalescent home, rest home, home for aged people, foster home, or other similar facility operated for the care or treatment of human beings; any asylum, jail, prison, orphanage or other facility in which human beings are detained and housed under legal restraint; and housing owned or controlled by an educational institution and used exclusively to house students, faculty or other employees, and any fraternity or sorority house or similar facility occupied exclusively by students and employees of such educational institution, and officially recognized or approved by it; any housing operated or used exclusively for religious, charitable or educational purposes by any organization having qualifications for exemption from property taxes under the laws of the State; any housing owned by a governmental agency and used to house its employees or for governmental purposes; any camp as defined in the Labor Code or other housing furnished by an employer exclusively for employees; any private dwelling house or other individually-owned single-family dwelling unit rented only occasionally and incidentally to the normal occupancy by the owner or his or her family; provided that the burden of establishing that the housing or facility is not a hotel as defined herein shall be upon the operator thereof, who shall file with the tax collector such information as the tax collector may require to establish and maintain such status.

Occupancy: 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: 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 agency 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: The consideration charged, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise. The rent will be determined based upon the consideration charged, inclusive of receipts, cash, credits, property and services of any kind or nature, without any deduction therefrom whatsoever. Rooms provided at a reduced rent or on a free ("complimentary") basis to employees shall be taxed based upon the amount the employee is charged for the room.

Transient: 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. A transient may be exempt from the transient occupancy tax ("tax") for stays exceeding 30 days if the operator provides the City with a copy of written agreements between the operator and the transient documenting the periods of occupancy exceeding 30 days. No occupant shall be exempt from the tax for the initial 30 days of his or her stay. Occupancies which exceed one year in length must be reported to the City and identified as being exempt (beyond the initial 30 days) from the tax. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this chapter may be considered. When a written contractual agreement between an operator and an occupant provides that a set number of rooms shall be occupied on a continuous basis, and the actual number of rooms so occupied varies by less than 20 percent of the agreed-upon number, then the occupants shall not be deemed "transient" and subjected to an additional transient occupancy tax by virtue of the variance.

(Code 1976, § II.L-501; Ord. No. 8, § 2, 1-5-72; Ord. No. 87-6, § 1, 4-28-87; Ord. No. 91-21, 12-17-91)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of eight percent of the rent charged by the operator, effective July 1, 1983. Said 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 Director of Administrative Services may require that such tax shall be paid directly to the Director of Administrative Services.

(Code 1976, § II.L-502; Ord. No. 8, § 3, 1-5-72; Ord. No. 82-18, § 1, 12-14-82; Ord. No. 83-6, § 1, 6-28-83; Ord. No. 84-7, § 1, 1-24-84)

A. No tax shall be imposed under the provisions of this chapter 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 herein provided;

2. Any federal or State 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;

4. Complimentary rooms wherein there is no compensation paid to the hotel in conjunction with the occupancy.

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 Director of Administrative Services. Said form shall contain a requirement that any person claiming an exemption under Subsection A, Part 2 or 3 of this section provide, to the property owner, proof of his or her governmental employment as an employee or officer, and one of the following, as conclusive evidence that his or her occupancy is for the official business of his or her employer:

1. Travel orders from his or her government employer.

2. A government warrant issued by his or her employer to pay for the occupancy.

3. A government credit card issued by his or her employer to pay for the occupancy.

C. There shall be a rebuttable presumption that a property owner is not liable for the tax imposed pursuant to this chapter with respect to any government employee or officer described in Subsection A, Part 2 or 3 above, for whom the property owner retains a signed and dated copy of the form described above.

(Code 1976, § II.L-503; Ord. No. 8, § 4, 1-5-72; Ord. No. 91-21, 12-17-91; Ord. No. 05-07, § 1, 4-12-05)

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.

(Code 1976, § II.L-504; Ord. No. 8, § 5, 1-5-72)

Within 30 days after commencing business, each operator of any hotel renting occupancy to transients shall register said hotel with the Director of Administrative Services and obtain from him or her a "transient occupancy registration certificate" to be at all times posted in a conspicuous place on the premises. Said 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 Director of Administrative Services for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Director of Administrative Services. 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 1976, § II.L-505; Ord. No. 8, § 6, 1-5-7)

A. Generally. Each operator shall, on or before the last day of the month following the close of each calendar month, or at the close of a shorter reporting period which may be established by the Director of Administrative Services, make a return to the Director of Administrative Services, on forms provided by the Director of Administrative Services, 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 Director of Administrative Services. The Director of Administrative Services may establish shorter reporting periods for any certificate holder if the Director of Administrative Services deems it necessary in order to ensure collection of the tax, and the Director of Administrative Services may require further information in the return. All taxes collected by operators pursuant to this chapter shall be segregated in the operator's accounting records until payment thereof is made to the Director of Administrative Services.

B. Reporting and remitting requirements upon cessation of business. Any operator who transfers, sells or terminates its business shall give written notice to the Director of Administrative Services of the date of transfer, sale or termination and the name and address of the transferee or purchaser, if any, at least 30 days prior to the date of transfer, sale or termination or, if the decision to transfer, sell or terminate the business was made less than 30 days prior to the date of transfer, sale, or termination, then the operator shall give such written notice to the Director of Administrative Services immediately. The operator shall, at the same time, notify the transferee or purchaser, if any, of the responsibility of such transferee or purchaser for any unpaid collected taxes or penalties as set forth in Section 2-9-416, and shall further certify in writing to the Director of Administrative Services that such transferee or purchaser was notified of the requirements of this chapter regarding such transferee or purchaser's responsibility for unpaid collected taxes and penalties. Upon cessation of business, for any reason whatsoever, an operator shall immediately submit to the Director of Administrative Services all returns and payments due to the City. The liability of a transferee or purchased for transient occupancy taxes collected by the transferring or selling operator and any penalties owed by such operator shall be as set forth in section 2-9-416.

(Code 1976, § II.L-506; Ord. No. 8, § 7, 1-5-72; Ord. No. 91-12, § 1, 6-25-91; Ord. No. 96-15, § 2(II.L-506), 10-8-96)

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 percent 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 on which the remittance first became delinquent shall pay a second delinquency penalty of 10 percent of the amount of the tax in addition to the amount of the tax and the 10 percent penalty first imposed.

C. Fraud. If the Director of Administrative Services 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 Subparagraphs A and B of this section.

D. PDI interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at a rate equal to the prime rate plus two percent per annum 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 1976, § II.L-507; Ord. No. 8, § 8, 1-5-72; Ord. No. 87-6, § 1, 4-28-87)

If any operator shall fail or refuse to collect said tax and to make, within the time provided in this chapter, any report and remittance of said tax or any portion thereof required by this chapter, the Director of Administrative Services 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 of Administrative Services 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 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. In case such determination is made, the Director of Administrative Services 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 serving or mailing of such notice make application in writing to the Director of Administrative Services 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 Director of Administrative Services shall become final and conclusive and immediately due and payable. If such application is made, the Director of Administrative Services shall give not less than five days written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said 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 finance office 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 15 days unless an appeal is taken.

(Code 1976, § II.L-508; Ord. No. 8, § 9, 1-5-72)

Any operator aggrieved by any decision of the Director of Administrative Services 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 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 or her 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 1976, § II.L-509; Ord. No. 8, § 10, 1-5-72)

It shall be the duty of every operator liable for the collection and payment of any tax imposed by this chapter to keep and preserve for a period of four 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 Director of Administrative Services shall have the right to inspect at all reasonable times. This section shall not be construed to limit the ability of the City to institute an action to collect unpaid occupancy taxes more than four years after the date on which such taxes were due where permissible under State law.

(Code 1976, § II.L-510; Ord. No. 8, § 11, 1-5-72; Ord. No. 05-07, § 2, 4-12-05)

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 Subparagraphs 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 Director of Administrative Services within three years of the date of payment. The claim shall be on forms furnished by the Director of Administrative Services.

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 Director of Administrative Services 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 Director of Administrative Services, or when the transient having paid the tax to the operator, establishes to the satisfaction of the Director of Administrative Services 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.

(Code 1976, § II.L-511; Ord. No. 8, § 12, 1-5-72)

A. Actions to collect. 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 funds held in trust for the account of the City and shall constitute 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 of a certificate of lien. If any amount required to be paid to the City under this chapter is not paid when due, the Director of Administrative Services may record in the Office(s) of the County Recorder(s) of such counties as the Director of Administrative Services may deem appropriate, a certificate which specifies the amount of tax and penalties due, the name and address of the operator liable for the same, a statement that the Director of Administrative Services has complied with all provisions of this chapter in determination of the amount required to be paid and a legal description of the real property owned by the operator. Upon recordation of the certificate, the amount required to be paid, together with penalties, shall constitute a lien upon all real property owned or thereafter acquired by the operator. The lien shall have the force, effect and priority of a tax lien and shall continue in effect for 10 years from the recording of the certificate unless sooner released or otherwise discharged.

C. Warrant for collection of tax. At any time after a certificate of lien is recorded under Subsection B above, the Director of Administrative Services may issue a warrant directed to any sheriff or marshal for the enforcement of the lien and the collection of any tax and penalties required to be paid to the City under this chapter. The warrant shall have the same effect as a writ of execution, and be executed in the same manner and with the same effect as a levy and sale pursuant to a writ of execution. The Director of Administrative Services may pay or advance to the sheriff or marshal such fees, commissions and expenses for services as are provided by law for similar services pursuant to a writ of execution.

D. Seizure and sale. In lieu of issuing a warrant under Subsection C above, at any time after an assessment is issued or a certificate of lien is recorded under Subsection B above, the Director of Administrative Services may collect the delinquent amount by seizing or causing to be seized any property, real or personal, of the operator and selling any noncash or nonnegotiable property at a public auction to pay the amount of tax due, together with any penalties and any costs incurred on account of the seizure and sale. Any seizure made to collect taxes due shall only be of property of the operator not exempt from execution under the provisions of the Civil Procedure Code.

(Code 1976, § II.L-512; Ord. No. 8, § 13, 1-5-72; Ord. No. 96-15, § 3(II.L-512), 10-8-96)

A. Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punished as provided in Title 4, Division 13.

B. Any operator or other person who fails or refuses to register as required herein, 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 Director of Administrative Services, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, and is punishable as aforesaid. 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 aforesaid.

(Code 1976, § II.L-513; Ord. No. 8, § 14, 1-5-72)

A. Duty of successor of operator. If an operator who is liable for any tax or penalties under this chapter sells or otherwise disposes of the operator's hotel, then the successor of such operator shall give written notice to the Director of Administrative Services of the date of sale at least 30 days prior to the date of sale or, if the agreement to sell or otherwise dispose of the hotel was made less than 30 days prior to the actual sale, then the successor shall give such written notice to the Director of Administrative Services immediately. The successor shall withhold from the selling operator, for the account of the City, sufficient funds in the escrow account to satisfy the transient tax liability. The successor and/or the selling operator may request a tax clearance certificate from the City as set forth in Section 2-9-417. If the selling operator fails to present a transient occupancy tax clearance certificate showing that no tax or penalty is due from the operator through the date of sale to the operator's successor within 30 days after such successor commences operation of the hotel, then the successor shall immediately deposit the amount withheld from the purchase price with the Director of Administrative Services pending settlement of the account of the selling operator.

B. Liability of successor for failure to withhold. If a successor fails to obtain a tax clearance certificate, or obtains a tax clearance certificate that indicates that tax is due and fails to withhold, for the benefit of the City, sufficient funds in the escrow account to satisfy the transient occupancy tax liability, then the successor shall be held liable for the amount of the tax due and owing on the property.

C. Appeal by selling operator. Any selling operator from whom a successor has withheld and paid to the City a portion of the purchase price, pursuant to Subsection A above, may challenge the determination of the Director of Administrative Services with respect to the amount of taxes or penalties owed by such selling operator by filing a notice of appeal with the City Clerk within 10 days of the date of mailing of the determination notice by the Director of Administrative Services. Following receipt of a timely notice of appeal, the provisions of Section 2-9-410 with respect to hearings shall apply.

(Ord. No. 96-15, § 1(II.L-514), 10-8-96; Ord. No. 05-07, § 3, 4-12-05)

A. Request for transient occupancy tax clearance certificate. A purchaser, transferee, or other person or entity attempting to obtain ownership of a property, the owner of which is required to collect the tax imposed pursuant to this chapter, and/or the selling operator of the property may request the City to issue a tax clearance certificate. Within 90 days of receiving such a request, the City shall do either of the following:

1. Issue the tax clearance certificate.

2. Request the current owner of the property to make available that owner's transient occupancy tax records for the purpose of conducting an audit regarding transient occupancy taxes that may be due and owing from the owner of the property.

B. If an audit is conducted pursuant to this section, it must be completed on or before 90 days after the date that the current or former owner's records are made available to the City. Within 30 days after completing the audit the City must either:

1. Issue a tax clearance certificate; or

2. If, after completing the audit, the City makes a determination that the current owner's records are insufficient to make a determination of whether transient occupancy taxes may be due and owing, notify the person or other entity that made the request that it will not issue a tax clearance certificate due to the insufficiency of the prior owner's records.

C. For a tax clearance certificate issued under this section all of the following apply:

1. The certificate shall state the amount of tax due and owing for the subject property, if any;

2. The certificate shall state the period of time of which it is valid;

3. The purchaser, transferee, or other person or entity who obtains ownership of the property 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.

(Ord. No. 05-07, § 4, 4-12-05)