La Quinta Municipal Code Ch. 3.24 Transient Occupancy Tax

The short title of this chapter shall be the transient occupancy ordinance.

(Ord. 2 § 1, 1982)

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

A. "Hotel" means any structure, or any portion of any structure, which is occupied or intended or designed for use or occupancy by transients, including, but not limited to, 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, time-share project or facility, dormitory, public or private club, rental space for recreation vehicles, mobile home or house trailer at a fixed location, or other similar structure or portion thereof, duplex, triplex, single-family dwelling units, including a short-term vacation rental unit as defined in Chapter 3.25, except any private dwelling house or other individually owned single-family dwelling house unit rented only occasionally (infrequently) 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 a hotel as defined in this subsection shall be upon the owner or operator thereof who shall file with the tax administrator such information as the tax administrator may require, to establish and maintain such status.

B. "Occupancy" means the use or possession, or the right or entitlement to the use or possession, of any hotel, room, rooms or any portion thereof offered for rent to be used or occupied for dwelling, lodging or sleeping purposes regardless of the purpose for which the rooms are rented or provided.

C. "Operator" means the person who is proprietor of the hotel whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, time-share project or facility manager or operator, or in any other capacity. Where the operator performs his or her functions through a managing agent of any type or character, the managing agent shall also be deemed an operator for the purpose of this chapter, and shall have jointly and severally the same duties and liabilities as the 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.

D. "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.

E. "Rent" means the amount of the consideration charged or chargeable to the tenant or person entitled to occupancy, for the occupancy of space, valued in money whether received in money, goods, labor or otherwise, including the full value of receipts, cash, credits, property or services of any kind or nature, without any deductions whatsoever. Rent may have been, or may be in part, payable or paid prior to or following (in whole or in part) the occupancy to which it is attributable, and may have been paid in whole or in part in advance on a long-term basis, such as in a time-share project or similar arrangement. It is not the intent of this subsection to make the operator liable for the tax on uncollected rent. However, uncollected rent must be reported.

F. "Tax administrator" means the city manager or designated agent, whether a city employee or county officer or employee.

G. "Time-share occupancy" means occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times.

H. "Transient" means any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license, time-share arrangement or ownership or agreement, or other agreement of whatever nature, for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. Any person so occupying space in a hotel shall be deemed to be a transient if his or her actual total period of occupancy does not exceed thirty (30) days. Unless days of occupancy or entitlement to occupancy by one (1) person are consecutive without any break, then prior or subsequent periods of such occupancy or entitlement to occupancy shall not be counted when determining whether a period exceeds the stated thirty (30) calendar days.

I. "Group hotel" means any hotel which has each of the following characteristics:

1. One hundred twenty-five (125) or more rooms;

2. Group meeting space to accommodate fifty (50) or more people;

3. An on-site sales effort that solicits and/or serves group meetings.

(Ord. 501 § 2, 2012; Ord. 428 § 2, 2006; Ord. 254 § 1, 1994; Ord. 211 § 2, 1992; Ord. 2 § 1, 1982)

For the privilege of occupancy in any group hotel or hotel, each transient is subject to, and shall pay a tax in the amount of eleven percent (11%) of the rent charged by the operator or otherwise payable by the transient for group hotels and ten percent (10%) for all other hotel occupancy. Insofar as the transient is concerned, the tax constitutes a debt owed by the transient to the operator or to the city. For the purposes of this section, the rent deemed payable on account of time-share occupancy by a transient shall be the rental value of the unit or room(s) which accommodated the occupancy, which rental value shall be computed by determining the pro rata share of the total purchase price of the time-share right or entitlement (whether or not involving an estate or any ownership in real property), which share is allocable to the period of transient occupancy currently involved, and adding thereto the total applicable operating costs including, but not limited to, the applicable real and personal property taxes, plus the total amount of any and all fees, assessments, charges and expenses (not including the previously referred to taxes) charged by the operator as attributable to the time-share occupancy of the transient by whatever name the fees, assessments, charges or expenses may be denominated, whether occupying fee, maintenance or operations charge, per diem fee, management fee or like name or otherwise. In making the computation referred to above of the pro rata share of the total purchase price, in any case wherein the time-share right or entitlement is in perpetuity or for life or otherwise not for a definite or ascertainable term. Such pro ration shall be made upon an assumed term of forty (40) years.

(Ord. 428 § 2, 2006; Ord. 211 § 1, 1992; Ord. 191 § 1, 1991; Ord. 125 § 1, 1988; Ord. 2 § 1, 1982)

A. 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 provided in this chapter;

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

B. No exemptions shall be granted except upon a claim therefor made at the time the rent is collected and under penalty of perjury upon a form prescribed by the tax administrator.

(Ord. 2 § 1, 1982)

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 the tax shall be separately stated from the amount of the rent charged. 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.

B. 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 tax administrator, or in lieu of such separate bank account an operator may post a bond guaranteeing payment of such taxes, equal to two (2) months tax as determined by the tax administrator.

(Ord. 202 § 1, 1992; Ord. 2 § 1, 1982)

A. Except for short-term vacation rental units as defined in Chapter 3.25 and noted in subsection C of this section, every person desiring to engage in or conduct business as operator of a hotel renting to transients within the city shall file with the tax administrator an application for a transient occupancy registration permit for each place of business. Every application for such a permit shall be made upon a form prescribed by the tax administrator and shall set forth the name under which the applicant transacts or intends to transact business, the location of his or her place of business and such other information as the tax administrator may require. The application shall be signed by the owner if a natural person, by a member or partner, if an association or partnership, by an executive officer or some person specifically authorized by the corporation to sign the application in the case of a corporation. The transient occupancy registration permit must be in effect at all times while the business is in operation and shall be at all times posted in a conspicuous place on the premises. The permit shall, among other things, state the following:

1. Name of hotel;

2. Name of operator;

3. Hotel address;

4. The date upon which the permit was issued;

5. "This Transient Occupancy Registration Permit signifies that the person named on the face hereof has fulfilled the requirements of the Transient Occupancy Tax Chapter 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 Permit does not authorize any person to conduct any unlawful business in any unlawful manner, nor operate a hotel without strictly complying with all applicable laws, including, but not limited to, those requiring a permit from any board, commission, department or office of this City. This Permit does not apply in lieu of such other permits which are otherwise required."

B. At the time of making an application for a registration permit, the applicant shall pay a registration fee of five dollars ($5.00) for each permit issued.

C. Transient occupancy tax registration permits issued for the operation of short-term vacation rentals prior to the date of the ordinance codified in this chapter shall remain in effect until December 31, 2013. The registration of short-term vacation rentals shall be conducted in accordance with the provisions as set forth in Chapter 3.25.

(Ord. 501 § 2, 2012; Ord. 2 § 1, 1982)

The tax imposed under Section 3.24.030 is:

A. Due to the tax administrator at the time it is collected by the operator; and

B. Becomes delinquent and subject to penalties if not received by the tax administrator on or before the last working day of the month following the close of each calendar month.

(Ord. 2 § 1, 1982)

Each operator shall, on or before the last working day of the month following the close of each calendar month, file a return with the tax administrator on the forms provided by him or her, of the total rents charged or chargeable as provided in Section 3.24.030, whether or not received, including any rentals charged for occupancies exempt under the provisions of Sections 3.24.020G and 3.24.040 and the amount of tax collected for transient occupancies. Each such return shall contain a declaration under penalty of perjury, executed by the operator or authorized agent, that to the best of the signator's knowledge, the statements in the return are true, correct and complete. Amounts claimed on the return as exempt from the tax pursuant to Sections 3.24.020G, 3.24.040 and 3.24.150 shall be fully itemized and explained on the return or supporting schedule. In determining the amount of taxable receipts on the tax return, rent as defined in Section 3.24.020(E), may not be reduced by any business expenses including, but not limited to, the amount of service charges deducted by credit card companies or commissions paid to travel agencies. At the time the return is filed, the tax fixed at the prevailing transient occupancy tax rate for the amount of rentals charged or chargeable, which are not exempt from tax under Sections 3.24.020G, 3.24.040 and 3.24.150 shall be remitted to the tax administrator. The tax administrator may establish other reporting periods and may require a cash deposit or bond or a separate trust fund bank account for any permit holder if he or she deems it necessary in order to ensure collection of the tax and he or she may require further information in the return. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the city until remittance thereof is made to the tax administrator.

(Ord. 2 § 1, 1982)

Each operator shall notify the tax administrator, ten (10) days prior to the sale or cessation of business for any reason and returns and remittances are due immediately upon the sale or cessation of business.

(Ord. 2 § 1, 1982)

Any operator who fails to remit any tax to the city or any amount of tax required to be collected and remitted to the city including amounts based on determination made by the tax administrator under Section 3.24.120, within the time required, shall pay a penalty of ten percent (10%) of the tax or amount of the tax in addition to the tax or amount of tax plus interest at the rate of one-half percent (½%) per month, or fraction thereof, from the date on which the tax or the amount of tax required to be collected becomes delinquent until the date of remittance or payment. Any operator who fails to pay any penalty imposed under this section within ten (10) days after receipt of notice thereof shall pay interest thereon at the rate of one-half of one percent (½%) per month, or fraction thereof from the date on which the penalty becomes due and payable to the city until the date of payment.

(Ord. 2 § 1, 1982)

If the tax administrator determines that the failure to make any remittance or payment due under this chapter is due to fraud, a penalty of one hundred percent (100%) of the amount of the tax and penalties shall be added thereto in addition to the penalties stated in Section 3.24.100.

(Ord. 2 § 1, 1982)

If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter, 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 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 payable by any operator who has failed or refused to collect the tax and make such report and remittance, he shall proceed to determine and assess against the operator the tax, interest and penalties provided for by this chapter. In case the 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 address. The operator may within ten (10) days after the serving or mailing of the 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 the application is made, the tax administrator shall give not less than five (5) 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 the tax, interest and penalties. At the hearing, the operator may appear and offer evidence why the specified tax, interest and penalties should not be so fixed. After the 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 the determination and the amount of the tax, interest and penalties. The amount determined to be due shall be payable after fifteen (15) days unless an appeal is taken as provided in Section 3.24.130.

(Ord. 2 § 1, 1982)

Any operator aggrieved by any decision of the tax administrator with respect to the amount of any tax, interest, 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 serving of the assessment or determination of tax, interest, and penalties, if any, due. Payment of all taxes, interest, and penalties shall be required as a condition precedent to seeking review of any tax liability under this section. The city council shall fix a time and place for hearing the appeal, and the city clerk shall give notice in writing to the operator at his or her last known address. The findings of the city council shall be final and conclusive and shall be served upon the appellant in the manner prescribed in this chapter for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Ord. 478 § 1, 2010; Ord. 2 § 1, 1982)

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the city or an officer thereof to prevent or enjoin the collection of taxes sought to be collected pursuant to this chapter. Payment of all taxes, interest, and penalties shall be required as a condition precedent to seeking judicial review of any tax liability under this chapter.

(Ord. 478 § 2, 2010)

It shall be the duty of every operator liable for the collection and remittance to the city of any tax imposed by this chapter to keep and preserve, in the city, for a period of three (3) years, records in such form as the tax administrator may require to determine the amount of the tax. The tax administrator shall have the right to inspect such records at all reasonable times and may subpoena the records of any operator who refuses to make them available for examination.

(Ord. 2 § 1, 1982)

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, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within three (3) years of the date of payment. The claims 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 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 person or credited to rent subsequently payable by the person to the operator.

C. A transient may obtain a refund of taxes overpaid or paid more than once 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.

(Ord. 2 § 1, 1982)

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 upon hearing, after giving the operator ten (10) days' notice in writing specifying the time and place of hearing and requiring him to show cause why his permit or permits should not be revoked, may suspend or revoke any one (1) or more of the permits held by the operator. The tax administrator shall give to the operator written notice of the suspension or revocation of any of his permits. The notices required in this section may be served personally or by mail in the manner prescribed for service of notice of a deficiency determination. The tax administrator shall not issue a new permit after the revocation of a permit unless he is satisfied that the former holder of the permit will comply with the provisions of this chapter relating to the occupancy tax and regulations of the tax administrator.

(Ord. 2 § 1, 1982)

During any period of time during which a permit 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. 2 § 1, 1982)

If any amount required to be remitted or paid to the city under this chapter is not remitted or paid when due, the tax administrator may, within three (3) 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 remitted and paid. From the time of the filing for record, the amount required to be remitted 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 him. 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 the certificate unless sooner released or otherwise discharged.

(Ord. 2 § 1, 1982)

A. The amounts required to be remitted and/or 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 assets;

3. Whenever the estate of the person in the hands of executors, administrators, or heirs is insufficient to pay all the 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 law. This chapter does not give the city a preference over any recorded lien which attached prior to the date when the amounts required to be paid became a lien.

B. The preference given to the city by this section shall be subordinate to the preferences given to claims for personal services by Sections 1204 and 1206 of the Code of Civil Procedure.

(Ord. 2 § 1, 1982)

At any time within three (3) years after any operator is delinquent in the remittance or payment of any amount required in this chapter to be remitted or paid or within three (3) years after the last recording of a certificate under Section 3.24.160, 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 sheriff, 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 with the same effect as a writ of execution. The tax administrator may pay or advance to the sheriff, marshal, or constable the same fees, commissions and expenses for his 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.

(Ord. 2 § 1, 1982)

At any time within three (3) years after any operator is delinquent in the remittance or payment of any amount, the tax administrator may forthwith collect the amount in the following manner. The tax administrator shall seize any property, real or personal, of the operator and sell the property, or a sufficient part of it, at public auction to pay the amount due together with any penalties and interest imposed for the delinquency and any costs incurred on account of the seizure and sale. Any seizure made to collect occupancy taxes due shall be only of property of the operator not exempt from execution under the provisions of the Code of Civil Procedure.

(Ord. 2 § 1, 1982)

If any operator liable for any amount under this chapter sells out his business or quits the business, his successor or assigns shall withhold sufficient of the purchase price to cover such amount until the former owner produces a receipt from the tax administrator showing that it has been paid or a certificate stating that no amount is due.

(Ord. 2 § 1, 1982)

If the purchaser of a hotel fails to withhold purchase price as required, he shall become personally liable for the payment of the amount required to be withheld by him to the extent of the purchase price, valued in money. Within sixty (60) days after receiving a written request from the purchaser for a certificate, or within sixty (60) 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 (90) days after receiving the request, the tax administrator shall either issue the certificate or mail notice to the purchaser at his 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. Failure of the tax administrator to mail the notice will release the purchaser from any further obligation to withhold purchase price as provided in this section. The time within which the obligation of the successor may be enforced shall start to run at the time the operator sells his business or at the time that the determination against the operator becomes final, whichever occurs the later.

(Ord. 2 § 1, 1982)

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 remitted to the city is a fiduciary obligation of the operator to the city and collectible in the same manner as a debt. 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.

(Ord. 2 § 1, 1982)

If any person or operator is delinquent in the remittance or payment of the amount required to be remitted or paid by him or in the event a determination has been made against him for the remittance of tax and payment of the penalty, the city may, within three (3) 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 sixty (60) days elapse after the receipt of the notice, whichever expires earlier. All persons, upon receipt of the 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 the 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 the bank at which the deposit is carried or at which the credits or personal property is held. If any person so notified makes transfer or disposition of the property or debts required to be held under this section during the effective period of the notice to withhold, he or she 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. 2 § 1, 1982)

A. Except for failure of an operator to pay to the tax administrator taxes collected under this chapter which is punishable as a felony pursuant to Section 424 of the Penal Code, every violation of this chapter is a misdemeanor and punishable by a fine not exceeding five hundred dollars ($500.00) or imprisonment in the County Jail for not more than six (6) months or by both such fine and imprisonment.

B. If the offense is not otherwise punishable as mentioned in subsection A of this section, any person wilfully failing to comply with, or knowingly violating, any of the provisions of this chapter shall be guilty of a misdemeanor.

C. Any operator or other person who wilfully 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 is guilty of a misdemeanor. Any person required to make, render, sign or verify any report or claim who wilfully 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.

(Ord. 2 § 1, 1982)

The tax administrator, for good cause, may extend for not to exceed one (1) month the time for making any return or paying any amount required to be paid under this chapter. The extension may be granted at any time, provided a request therefor is filed with the tax administrator within or prior to the period for which the extension may be granted. Any person to whom an extension is granted shall pay, in addition to the tax, interest at the rate of one percent (1%) per month or fraction thereof, from the date on which the tax would have been due without the extension until the date of payment.

(Ord. 2 § 1, 1982)

It is unlawful for any person having an administrative duty under this chapter to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of the records of any operator or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any return, or to knowingly permit any return or copy thereof or any abstract or particulars thereof to be seen or examined by any person. Successors, receivers, trustees, executors, administrators, assignees and guarantors, if directly interested, may be given information as to the items included in the amounts of any unpaid tax or amounts of tax, penalties and interest required to be collected.

(Ord. 2 § 1, 1982)

The city is empowered to enter into a joint powers agreement with other cities and the county, and if the agreement or agreements can be made wherein central collection for the county is provided, then it shall be done upon approval by the city council.

(Ord. 2 § 1, 1982)