Menifee Municipal Code Ch. 3.28 Transient Occupancy Tax

The short title of this chapter shall be “Transient Occupancy Tax”.

(Ord. 2008-02, passed 10-1-2008)

The following words and phrases shall, for the purposes of this chapter, be defined as follows, unless it is clearly apparent from the context that another meaning is intended.

HOTEL. 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, public campsite or recreational vehicle site, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, time-share project or facility offered for public use, dormitory, public or private club, mobile home or house trailer at a fixed located, or other similar structure or portion thereof, duplex, triplex, single-family dwelling units 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 herein, shall be upon the owner or operator thereof who shall file with the Tax Administrator the information as the Tax Administrator may require, to establish and maintain that status.

OCCUPANCY. 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.

OPERATOR. The person who is proprietor of the hotel whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or in any other capacity. Where the OPERATOR performs his, her or its 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.

PERSON. 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. 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 deduction 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 definition to make the operator liable for the tax on uncollected rent. However, uncollected rent must be reported.

TAX ADMINISTRATOR. The City Manager or his or her designated agent, whether a city employee or county officer or employee.

TRANSIENT. Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement of whatever nature, for a period of 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 30 days, unless there is a written agreement between the operator and occupant providing for a longer period of occupancy. Unless days of occupancy or entitlement to occupancy by one person are consecutive without any break, then prior to subsequent periods of the occupancy or entitlement to occupancy shall not be counted when determining whether a period exceeds the stated 30 calendar days.

(Ord. 2008-02, passed 10-1-2008)

For the privilege of occupancy in any hotel, each transient is subject to, and shall pay a tax in the amount of 10% of the rent charged by the operator or otherwise payable by the transient. Insofar as the transient is concerned, the tax constitutes a debt owed by the transient to the operator or to the city. 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 the tax is not paid to the hotel operator, the Tax Administrator may require payment directly to him or her.

(Ord. 2008-02, passed 10-1-2008)

No tax shall be imposed upon any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. No exemptions shall be granted, except upon written claim therefore made under penalty of perjury at the time the rent is paid, upon a form prescribed by the Tax Administrator. Federal, state and local officers and employees are not exempt.

(Ord. 2008-02, passed 10-1-2008)

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 the tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt of 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. 2008-02, passed 10-1-2008)

(A) Within 30 days after commencing business or by 1-1-1991, 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 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 other information as the Tax Administrator may require. The application shall be signed by the owner if a natural person, if 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; and

(5) This transient occupancy registration permit signifies that the person named on the face hereof has fulfilled the requirements of this chapter by registering with the Tax Administrator for the purpose of collecting from transients the transient occupancy tax and remitting the tax to the Tax Administrator. This permit does not authorize any person to conduct any unlawful business in an 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 the city. This permit does not apply in lieu of 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 in an amount determined by the Council for each permit issued.

(Ord. 2008-02, passed 10-1-2008)

The tax imposed under § 3.28.030 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. 2008-02, passed 10-1-2008)

Each operator shall, on or about 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 § 3.28.030, whether or not received, including any rentals charged for occupancies exempt under the provisions of § 3.28.040 and the amount of tax collected for transient occupancies. Each return shall contain a declaration under penalty of perjury, executed by the operator or his or her 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 §§ 3.28.040 and 3.28.150 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 § 3.28.020, 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 § 3.28.040 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. 2008-02, passed 10-1-2008)

Each operator shall notify the Tax Administrator, ten 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. 2008-02, passed 10-1-2008)

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 § 3.28.120, within the time required, shall pay a penalty of 10% of the amount of the tax in addition to the amount of tax, plus interest at the rate of 0.5% 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 days after receipt of notice thereof shall pay interest thereon at the rate of 0.5% 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. 2008-02, passed 10-1-2008)

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 100% of the amount of the tax and penalties shall be added thereto in addition to the penalties stated in § 3.28.100.

(Ord. 2008-02, passed 10-1-2008)

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 a manner as he or she may deem best to obtain facts and information on which to base his or her estimate on the tax due. As soon as the Tax Administrator procures the facts and information as he or she is able to obtain upon which to base the assessment of any tax imposed by the chapter payable by any operator who has failed or refused to collect the same and make the report and remittance, he or she 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 prepared, addressed to the operator so assessed at his or her last known address. The operator may within ten 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 days’ written notice in the manner prescribed herein 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 herein of the determination and the amount of the tax, interest and penalties. The amount determined to be due shall be payable within 15 days unless an appeal is taken as provided in § 3.28.130.

(Ord. 2008-02, passed 10-1-2008)

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 15 days of serving of the assessment or determination of tax and penalties, if any, due. 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 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. 2008-02, passed 10-1-2008)

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 years, records in a form as the Tax Administrator may require to determine the amount of the tax. The Tax Administrator shall have the right to inspect the records at all reasonable times and may subpoena the records of any operator who refuses to make them available for examination.

(Ord. 2008-02, passed 10-1-2008)

(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 divisions (B) and (C) below, provided a claim in writing therefore, stating under penalty of perjury the specified grounds upon which the claim is founded, is filed with the Tax Administrator within three 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 division (A) above, 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 or her right thereto by written records.

(Ord. 2008-02, passed 10-1-2008)

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-days’ notice in writing specifying the time and place of hearing and requiring him or her to show cause why his or her permit or permits should not be revoked, may suspend or revoke any one 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 or her permits. The notices herein required may be served personally or by mail in the manner prescribed or service of notice of a deficiency determination. The Tax Administrator shall not issue a new permit after the revocation of a permit unless he or she 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. 2008-02, passed 10-1-2008)

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. 2008-02, passed 10-1-2008)

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 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 shall constitute a lien upon all real property in the county owned by the operator or afterwards and before the lien expires acquired by him or her. The lien has the force, effect and priority of a judgment lien and shall continue for ten years from the time of filing of the certificate unless sooner released or otherwise discharged.

(Ord. 2008-02, passed 10-1-2008)

(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 or her 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; and

(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 Cal. Code of Civil Procedure §§ 1204 and 1206.

(Ord. 2008-02, passed 10-1-2008)

At any time within three years after any operator is delinquent in the remittance or payment of any amount herein required to be remitted or paid or within three years after the last recording of a certificate under § 3.28.160, 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 levy of and a sale pursuant to 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 or her 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. 2008-02, passed 10-1-2008)

At any time within three 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. 2008-02, passed 10-1-2008)

If any operator liable for any amount under this chapter sells out his or her business or quits the business, his or her successor or assigns shall withhold sufficient of the purchase price to cover the 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. 2008-02, passed 10-1-2008)

If the purchaser of a hotel fails to withhold purchase price as required, he or she shall become personally liable for the payment of the amount required to be withheld by him or her to the extent of the purchase price, valued in money. Within 60 days after receiving a written request from the purchaser for a certificate, or within 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 90 days after receiving the request, the Tax Administrator shall either issue the certificate or mail notice to the purchaser at his or her 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 above provided. The time within which the obligation of the successor may be enforced shall start to run at the time the operator sells his or her business or at the time that the determination against the operator becomes final, whichever event occurs the later.

(Ord. 2008-02, passed 10-1-2008)

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 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 of Menifee for the recovery of the amount.

(Ord. 2008-02, passed 10-1-2008)

If any person or operator is delinquent in the remittance or payment of the amount required to be remitted or paid by him or her or in the event a determination has been made against him or her for the remittance of tax and payment of the penalty, the city may, within three 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 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 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 hereunder 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. 2008-02, passed 10-1-2008)

(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 Cal. Penal Code § 424, every violation of this chapter is a misdemeanor and punishable by a fine not exceeding $500 or imprisonment in the county jail for not more than six months or by both the fine and imprisonment.

(B) If the offense is not otherwise punishable as mentioned in division (A) above, any person willfully 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 willfully 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 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 willfully 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. 2008-02, passed 10-1-2008)

The Tax Administrator, for good cause, may extend for not to exceed one 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 therefore 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 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. 2008-02, passed 10-1-2008)

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. 2008-02, passed 10-1-2008)

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. 2008-02, passed 10-1-2008)