Los Altos Municipal Code Ch. 3.36 Transient Occupancy Tax

For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:

A.

"Hotel" shall mean 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 shall include any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobilehome, or house trailer at a fixed location or other similar structure, or portion thereof.

B.

"Occupancy" shall mean the use or possession, or the right to the use or possession, of any room, or portion thereof, in any hotel for dwelling, lodging, or sleeping purposes.

C.

"Operator" shall mean the person who is the 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 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, however, shall be considered to be compliance by both.

D.

"Person" shall mean 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" shall mean 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, property, and services of any kind or nature, without any deduction therefrom whatsoever.

F.

"Tax administrator" shall mean the finance director.

G.

"Transient" shall mean 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 (30) consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty (30) days has expired.

H.

"Rental agent" shall mean any person other than an operator who collects rent from a transient for the transient's occupancy of a hotel.

(Ord. 01-399 § 1; prior code § 8-6.01)

(Ord. No. 2018-453, § 1, 11-6-2018)

All revenues generated by this tax shall be deposited into the city's general fund and may be spent for unrestricted general revenue purposes.

(Ord. No. 2018-453, § 1, 11-6-2018)

For the privilege of occupancy in any hotel each transient shall be subject to, and shall pay, a tax in the amount not to exceed fourteen (14) percent of the rent payable by the transient in consideration of the transient's occupancy, whether paid to an operator or to a rental agent. The tax shall constitute a debt owed by the transient to the city which tax shall be extinguished only by payment to the operator, rental agent or to the city. The transient shall pay the tax to the operator of the hotel or to the rental agent, at the time the rent is paid. If the rent is paid in installments, the 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 or to the rental agent, the tax administrator may require that such tax shall be paid directly to the tax administrator.

Determination of Amount to be Raised. Each year following adoption of the city's annual budget, the city council will determine the rate to be charged for the transient occupancy tax and shall set that rate in an amount not to exceed the rate authorized by the ordinance codified in this section or any lesser rate as the council shall determine by resolution.

(Ord. 01-403 §§ 1,2: prior code § 8-6.02)

(Ord. No. 2018-453, § 1, 11-6-2018)

This chapter authorizes a maximum transient occupancy tax rate of fourteen (14) percent. The city council may, by ordinance, upwardly or downwardly adjust the rate of the tax imposed by this chapter and may otherwise repeal or amend this chapter without a vote of the people. However, as required by California Constitution Article XIIIC (Proposition 218), voter approval is required for any amendment that would increase the fourteen (14) percent maximum rate or methodology of the tax levied pursuant to this chapter. The people of the city of Los Altos affirm that the following actions shall not constitute an increase of the maximum rate or methodology of the tax requiring subsequent voter approval:

A.

The upward adjustment of the tax rate, provided the rate does not exceed the fourteen (14) percent maximum set forth by this voter-approved chapter;

B.

The restoration of the rate of the tax to a rate that is no higher than the fourteen (14) percent maximum set by this voter-approved chapter, if the city council has previously acted to reduce the rate of the tax;

C.

An action that interprets or clarifies the methodology of the tax, or any definition applicable to the tax, so long as interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the language of this chapter;

D.

The establishment of a class of person or service that is exempt or excepted from the tax or the discontinuation of any such exemption or exception; and

E.

Resuming collection of the tax imposed by this chapter, even if the city had, for some period of time, either suspended collection of the tax or otherwise failed to collect the tax, in whole or in part.

(Ord. No. 2018-453, § 1, 11-6-2018)

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 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 provided in this chapter.

(Ord. 05-273 § 1: Ord. 01-399 § 2: prior code § 8-6.03)

A.

Any transient who pays rent to a rental agent shall, at the time the rent is paid, pay the tax to the rental agent in the manner required by Section 3.36.020. If for any reason the tax is not paid to the rental agent, it shall be paid to the operator before the transient has ceased occupancy in the hotel or paid directly to the tax administrator pursuant to Section 3.36.020. Any transient seeking a refund under Section 3.36.100 of taxes paid to a rental agent must establish that the transient has been unable to obtain a refund from the rental agent who collected the tax.

B.

Any rental agent who collects rent shall comply with all obligations of the operator set forth in Sections 3.36.030 and 3.36.090 of this chapter. The rental agent shall remit all collected taxes to the operator before the deadline for the operator to remit the taxes to the tax administrator under Section 3.36.050, and the rental agent shall provide the operator with copies of all records required to be maintained by the operator

pursuant to Section 3.36.090 of this chapter, including records necessary for the operator to comply with its obligations under this chapter.

C.

If the tax administrator determines that a rental agent has failed to collect, remit, or report any tax, the tax administrator may take any action against the rental agent that he or she may take against an operator under Sections 3.36.060 and 3.36.070 of this chapter subject to the requirements of those sections. If the tax administrator assesses unremitted taxes and penalties against the rental agent, the rental agent shall be subject to Sections 3.36.070, 3.36.080, 3.36.100 and 3.36.110 of this chapter as if it were an operator. Nothing in this section shall prohibit the tax administrator from assessing the full amount of any unremitted taxes and penalties solely against the operator in lieu of assessing some or all of those taxes and penalties against the rental agent.

(Ord. No. 2018-453, § 1, 11-6-2018)

On or before July 22, 1978, or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancies to transients shall register the hotel with the tax administrator and obtain from him or her a "Transient Occupancy Registration Certificate" to be at all times posted in a conspicuous place on the premises. The certificate, among other things, shall state the following:

A.

The name of the operator;

B.

The address of the hotel;

C.

The date upon which the certificate was issued; and

D.

A statement as follows: "This transient occupancy registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Law 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 any 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 the city. This certificate does not constitute a permit."

(Prior code § 8-6.04)

A.

Each operator, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the tax administrator, shall make a return to the tax administrator, on forms provided by him or her, 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 tax administrator. The tax administrator may establish shorter reporting periods for any certificate 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. Returns and payments shall be 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.

B.

Any operator may enter into an agreement, at the sole discretion of the city manager, to pay in full at a time or times during any calendar or fiscal year to be agreed, an amount agreed between the parties as the estimated tax due for the period in question. Upon receipt of said payment, operator shall have no further duty to collect or remit taxes for said period. An operator's duty to maintain full and accurate books of account as provided in this chapter, shall continue.

(Ord. 01-399 § 3: prior code § 8-6.05)

A.

Original delinquencies. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten (10) percent of the amount of the tax in addition to the amount of the tax.

B.

Continued delinquencies. Any operator who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten (10) percent of the amount of the tax in addition to the amount of the tax and the ten (10) 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 (25) percent of the amount of the tax shall be added thereto in addition to the penalties set forth 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 required by this chapter to be paid.

(Prior code § 8-6.06)

If any operator shall fail 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 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 tax administrator procures 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 tax administrator shall give 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, within ten (10) days after the serving or mailing of such notice, may make an application in writing to the tax administrator for a hearing on the amount assessed. If the application by the operator for a hearing is not made within the time prescribed, the tax, interest, and penalties, if any, determined by the tax administrator shall become final and conclusive and immediately due and payable. If such application is made, the tax administrator shall give not less than five days' written notice in the manner prescribed in this section to the operator to show cause at a time and place fixed in the notice why the amount specified therein should not be fixed for such tax, interest, and penalties. At such hearing, the operator may appear and offer evidence why such specified tax, interest, and penalties should not be so fixed. After such hearing, the tax administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the person, in the manner prescribed in this section, of such determination and the amount of such tax, interest, and penalties. The amount determined to be due shall be payable after fifteen (15) days, unless an appeal is filed as provided in Section 3.36.080 of this chapter.

(Prior code § 8-6.07)

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 (15) days after the serving or mailing of the determination of the 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 for service of the notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.

(Prior code § 8-6.08)

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.

(Prior code § 8-6.09)

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 tax aministrator within three years after the date of payment. The claim shall be on forms furnished by the tax adminstrator.

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, 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, paid more than once, or erroneously or illegally collected or received by the city by filing a claim in the manner provided by 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 tax administrator, 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.

(Prior code § 8-6.10)

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the transient to the city. Any such tax collected by an operator which has not been paid to the city shall be deemed a debt owed by the operator to the city. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount.

(Prior code § 8-6.11)