Morgan Hill Municipal Code Ch. 3.24 Transient Occupancy Tax

Footnotes:

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Editor's note— Ord. No. 2179 N.S., § 1, adopted Dec. 2, 2015, amended Chapter 3.24 in its entirety to read as herein set out. Former Ch. 3.24, §§ 3.24.010—3.24.180, pertained to transient occupancy tax. See Code Comparative Table for a detailed history of derivation.

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" 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, lodginghouse, roominghouse, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location located outside a mobile home park and not occupied by employees, operator or owner of said mobile home park, or other similar structure or portion thereof.

B. "Occupancy" means the use or possession, or the right to the use or possession of any room or rooms or portions thereof, in any hotel for dwelling, lodging or sleeping purposes.

C. "Operator" means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the operator performs his or her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.

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 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.

F. "Tax administrator" means the assistant city manager for administrative services, or designee, to be charged with administration of the tax.

G. "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 in this chapter may be considered.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten percent, effective April 20, 1991, of the rent charged by the operator. The tax constitutes a debt owed by the transient to the city, which is extinguished only by payment to the operator or to the city. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the tax administrator may require that such tax shall be paid directly to the city.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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 exemption shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the tax administrator.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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 provided in this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

Within thirty days after the effective date of the ordinance codified in this chapter or within thirty days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register such hotel with the tax administrator and obtain 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:

A. The name of the operator;

B. The address of the hotel;

C. The date upon which the certificate was issued;

D. The following statement:

This transient occupancy registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the 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 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. No. 2179 N.S., § 1, 12-2-2015)

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 or she may have been liable for the collection of and payment to the city. The tax administrator shall have the right to inspect said records at all reasonable times.

The records maintained by the operator under this section shall include, but not be limited to, the following:

(a) Daily record of room occupancies.

(b) A written record of each occupancy charge for which an initial exemption is claimed, on a form to be provided by the city pursuant to Section 3.24.030 of this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

Each operator shall, on or before the last day of the month following the month the tax was received, 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 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 deemed necessary in order to insure collection of the tax and the tax administrator 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 and the use of taxes collected for any other purpose is a violation of this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

The city may audit those records kept by the operator as required by this chapter at any time upon reasonable notice to the operator. If the audit reveals an underpayment of taxes in excess of ten percent of the total amount owed to the city for any consecutive three-month period during the audit period, the operator shall pay the city actual costs to perform the audit as well as the full amounts, plus penalties and interest of tax, that the audit reveals should have been remitted to city pursuant to this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

If any operator fails or refuses to collect such tax and to make, within the time provided in this chapter, any report and remittance of such tax or any portion thereof required by this chapter, the tax administrator shall proceed in such manner deemed best to obtain facts and information on which to base the estimate of the tax due. As soon as the tax administrator procures such facts and information 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 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 the 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 in this chapter to the operator to show cause at a time and place fixed in said 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 chapter 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 3.24.150 of this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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 Sections 3.24.090 and 3.24.100 of this chapter.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

Every penalty imposed and such interest as accrues under the provisions of Sections 3.24.090 through 3.24.130 of this chapter shall become a part of the tax required by this chapter to be paid.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

A. 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 or her last known place of address.

B. The findings of the 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. No. 2179 N.S., § 1, 12-2-2015)

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 therefore, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within three years of the date of payment.

B. An operator may claim a refund of 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 a refund shall not 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 city, 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 showing entitlement thereto.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

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, and payment of all tax, interest, and penalties shall be required as a condition precedent to seeking judicial review of any tax liability.

(Ord. No. 2179 N.S., § 1, 12-2-2015)

A. It is unlawful for any operator or other person to do any of the following:

1. Fail or refuse to register as required in this chapter;

2. Fail to furnish any return required to be made;

3. Fail or refuse to furnish a supplemental return or other data required by the tax administrator;

4. Render a false or fraudulent return or claim; or

5. Fail to remit the full amount of tax collected.

B. It is unlawful for any person required to make, render, sign, or verify any report or claim as required by this chapter to make any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due.

(Ord. No. 2179 N.S., § 1, 12-2-2015; Ord. No. 2276 N.S., § 5, 5-2-2018)

Any person violating any of the provisions of this chapter is guilty of a misdemeanor punishable upon conviction by a fine not exceeding one thousand dollars or by imprisonment in the county jail not to exceed six months; or by both such fine and imprisonment.

(Ord. No. 2179 N.S., § 1, 12-2-2015)