King City Municipal Code Ch. 3.12 Transient Occupancy Tax

Note: Prior ordinance history: Ords. 276, 281, 311, 473, 495, 553 and 635.

This chapter shall be known as the “Uniform Transient Occupancy Tax Ordinance of the City of King.”

(Ord. 678 § 1 (Attach. A ), 2008)

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, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.

“Occupancy”

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, sub-lessee, mortgagee in possession, licensee, or any other capacity. Where the operator performs his functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this 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.

“Person”

means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.

“Rent”

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 of the manager’s 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 thirty consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty 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 herein may be considered.

(Ord. 678 § 1 (Attach. A ), 2008)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amounts stated below for the periods of time stated below, expressed as a percentage of the rent charged by the operator:

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 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. 678 § 1 (Attach. A ), 2008)

No tax shall be imposed 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 officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.

(3) Occupancy charge incurred by government employees, which are billed directly to, and paid directly by, a unit of the state or federal government. The employee must provide valid photo identification proving his or her government employment.

(4) A service charge collected by an operator and paid by the operator to employees of the hotel in lieu of tips or gratuities. To qualify for this exemption, this service charge shall not be paid to employees in lieu of all or part of the salary employees receive from the hotel.

The officer or employee claiming the exemption shall sign a standard form to claim the exemption under penalty of perjury. The standard form shall be set by resolution of the city council and shall contain a requirement that the officer or employee claiming the exemption provide the operator conclusive evidence that his or her occupancy is for the official business of his or her employer, by providing: (a) travel orders from his or her government employer, (b) a governmental warrant issued by his or her employer to pay for the occupancy, or (c) a government credit card issued by the employer to pay for the occupancy.

(Ord. 678 § 1 (Attach. A ), 2008)

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.

(Ord. 678 § 1 (Attach. A ), 2008)

Within thirty days after the effective date of the ordinance codified herein, or within thirty days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the tax administrator and obtain from him a “transient occupancy registration certificate” to be at all times posted in a conspicuous place on the premises. 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 and 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.”

(Ord. 678 § 1 (Attach. A ), 2008)

Each operator shall, on or before the last day of the month following the close of each calendar month, or at the close of any shorter reporting period which may be established by the tax administrator, make a return to the tax administrator, on forms provided by him, of the reporting month, name of the hotel, total rooms available for rent, total rooms occupied, percentage of rooms occupied in month, gross receipts from occupancy, less gross receipts from monthly rentals, less transient exemptions claimed, equals taxable transients, and interest penalty if applicable. At the time the return is filed, the full amount of the tax collected shall be remitted to the tax administrator. The tax administrator 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 administrator.

(Ord. 678 § 1 (Attach. A ), 2008)

(a) 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 of the amount of the tax in addition to the amount of the tax.

(b) Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the tax in addition to the amount of the tax and the ten percent penalty first imposed.

(c) Fraud. If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (a) and (b) of this section.

(d) Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this 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.

(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.

(Ord. 678 § 1 (Attach. A ), 2008)

If any operator fails or refuses 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 tax administrator shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the tax administrator procures such facts and information as he 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 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 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 last known place of address. Such operator may within ten days after the serving 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 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 tax administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen days unless an appeal is taken as provided in Section 3.12.100.

(Ord. 678 § 1 (Attach. A ), 2008)

Any operator aggrieved by any decision of the tax administrator with respect to the amount of such tax, interest and penalties, if any, may appeal to the council by filing a notice of appeal with the city clerk within fifteen days of the serving or mailing of the determination of tax due. The council shall fix a time and place for hearing such appeal, and the city clerk shall give notice in writing to such operator at his last known place of address. The findings of the council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Ord. 678 § 1 (Attach. A ), 2008)

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 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.

(Ord. 678 § 1 (Attach. A ), 2008)

(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 subsections (b) and (c) of this section provided a claim in writing therefor is filed with the city. The claim shall conform in all respects to the requirements set forth for claims against the city in Chapter 2.50 of Title 2 of the King City Municipal Code.

(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 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 overpaid or paid more than once or erroneously or illegally collected or received by the city by filing a claim in the manner provided in subsection (a) of this section, but only when the tax was paid by the transient directly to the 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 right thereto by written records showing entitlement thereto.

(Ord. 678 § 1 (Attach. A ), 2008)

(a) 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 of the amount of the tax in addition to the amount of the tax.

(b) Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the tax in addition to the amount of the tax and the ten percent penalty first imposed.

(c) Willful Failure to Pay. If the financial officer or his or her designee determines that the nonpayment of any remittance due under this chapter is willful, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (a) and (b) of this section.

(d) Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one and one-half percent per month 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.

(f) Waiver. The city, in its sole discretion, may waive the penalty and interest provided for in subsections (a) and (d) of this section not more than once every five years per hotel, based upon good cause shown, provided the tax due is not delinquent more than twenty-nine days following the date on which the remittance first became due. The operator shall apply in writing to the city for waiver of the penalty, on such forms as the finance officer or his or her designee may designate. In the event the hotel is sold and no waiver has been applied for by the predecessor operator of the hotel, the successor operator of the hotel may apply for the waiver. Nothing in this subsection shall relieve the operator from liability for the tax imposed by this chapter.

(Ord. 678 § 1 (Attach. A ), 2008)

(a) Liability of Successor. If any operator liable for any amount under this chapter sells the hotel or terminates operation of the hotel for any reason, his or her successor or assigns shall withhold a sufficient portion of the purchase price for the hotel to cover the amount owed under this chapter, until the former operator produces a receipt from the finance department showing that it has been paid in addition to a tax clearance certificate.

(b) Liability of Purchaser. If the purchaser of a hotel fails to withhold money from the purchase price, as required in subsection (a) of this section, he or she shall become personally liable to the city for the payment of the amount required to be withheld by him to the extent of the purchase price, valued in money. Within sixty days after receiving a written request from the purchaser for the certificate set forth in subsection (a) of this section, or within sixty days from the date the former owner’s records are made available for audit, whichever period expires the later, but in any event not later than ninety days after receiving the request, the finance department shall either issue the certificate or mail notice to the purchaser at his address as it appears on the records of the city of the amount that must be paid as a condition of issuing the certificate.

(Ord. 678 § 1 (Attach. A ), 2008)