Morro Bay Municipal Code Ch. 3.24 Transient Occupancy Tax

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Note— For statutory provisions regarding the authority of cities to impose a tax on transients who occupy room space within the city limits, see Rev. and Tax. Code §§ 7280 and 7281.

This chapter shall be known as the "Uniform Transient Occupancy Tax Ordinance of the city of Morro Bay."

(Ord. 18 § 1 (part), 1965: prior code § 2800)

Except where the context otherwise requires, the definitions given in this section 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 occupancy by transients for dwelling, lodging, or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobilehome or house trailer at a fixed location or other similar structure or portion thereof; and shall further include any space, lot, area or site in any trailer court, recreational vehicle park, mobilehome park, camp, park or lot where a trailer, tent, recreational vehicle, mobile home, motorhome, or other similar conveyance is occupied or intended or designed for occupancy by transients dwelling, lodging or sleeping purposes.

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

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 function through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.

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 city clerk of the city of Morro Bay.

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 is deemed to be a transient until the period of thirty days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of the ordinance codified herein may be considered.

(Ord. 260 § 1, 1984; Ord. 18 § 1 (part),1965: prior code § 2801)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten percent 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 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 tax administrator.

(Ord. 455 § 4, 1996: Ord. 410 § 4, 1991; Ord. 245, 1983: Ord. 158 § 1, 1978: Ord. 70 § 1, 1968: Ord. 18 § 1 (part), 1965: prior code § 2802)

No tax shall be imposed upon:

A. Any person as to whom, or any occupancy as to which, it is beyond the power of the city to impose the tax herein provided;

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

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. 48 § 1, 1966: Ord. 18 § 1 (part), 1965: prior code § 2803)

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 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. 18 § 1 (part), 1965: prior code § 2804)

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

(Ord. 18 § 1 (part), 1965: prior code § 2805 (part))

The transient occupancy registration 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. "This transient occupancy registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the uniform transient occupancy tax ordinance by registering with the tax administrator for the purpose of collecting from transients the transient occupancy tax and remitting said tax to the tax administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a hotel without strictly complying with all local 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. 18 § 1 (part), 1965: prior code § 2805 (part))

Each operator shall, 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, make a return to the tax administrator, on forms provided by him, 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 deems it necessary in order to insure collection of the tax and he may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the city until payment thereof is made to the tax administrator.

(Ord. 18 § 1 (part), 1965: prior code § 2806)

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

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

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

D. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one-half of one percent per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

E. Penalties Merged With Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be paid.

(Ord. 18 § 1 (part), 1965: prior code § 2807)

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 said tax or any portion thereof required by this chapter, the tax administrator (or designee) shall proceed in such manner as she/he may deem best to obtain facts and information on which to base her/his estimate of the tax due. As soon as the tax administrator (or designee) shall procure such facts and information as she/he is able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any operator who has failed or refused to collect the same and to make such report and remittance, she/he shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the tax administrator (or designee) 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 her/his last known place of address. If the operator fails to file, pursuant to Section 3.24.110 below, a timely appeal (in part or in whole) of that assessment, then the assessed tax, interest and/or penalties not appealed shall become final and conclusive and immediately due and payable.

(Ord. 18 § 1 (part), 1965: prior code § 2808; Ord. No. 660, § 2A, 9-26-23)

A. An operator may within fifteen days after the service or mailing of a final determination from the tax administrator (or designee), sent pursuant to Section 3.24.100 above, submit a notice of appeal to the tax administrator.

B. An appeal must be submitted in writing to the tax administrator signed by the person making the appeal or their legal representative. The appeal must be accompanied by an appeal fee in accordance with below subsection C. Any appeal submitted to the city based upon this chapter shall be supported by evidence and contain the following:

1. Name, address and telephone number of operator/appellant;

2. Specify the decision(s), action(s), or particular part(s) of the assessment that are the subject of the appeal;

3. Whether all or only specified tax, interest and/or penalties are being appealed;

4. Include a true and correct copy of the notice issued by the tax administrator (or designee) for which the operator is appealing;

5. State with specificity the reasons and grounds for making the appeal, including, but not limited to, both:

a. Why the assessment (in whole or part) should be revoked, modified, or otherwise set aside; and

b. A statement of facts upon which the appeal is based in sufficient detail to enable the hearing officer to understand the nature of the controversy, basis of the appeal and relief requested;

6. All documents or other evidence pertinent to the appeal that the appellant requests the hearing officer consider at the hearing (documents and evidence not presented at the time of filing the appeal shall not be considered at the hearing except upon a showing of good cause);

7. A statement that all of the matters alleged in the appeal are true, followed by the signature(s) of each appellant(s), and one official mailing address (if different than address in no. 1 above) for the appellant(s) to receive further notices from city relating to the appeal.

C. The appeal fee for filing an appeal based upon this chapter is the full amount (i.e., full cost recovery) of the current fiscal year non-discounted fee provided for in the city's adopted fee schedule for appeals for non-land use administrative decisions. The appeal fee is refundable in its entirety if the appeal prevails in its entirety. The appeal fee is refundable in part, if the appeal prevails on some of its claims, on a pro rata basis calculated by the amount of the assessment reduction compared to the assessment amount appealed. The city manager may provide an appeal fee hardship waiver, in whole or in part, for good cause.

D. Operators who file a timely written notice of appeal in compliance with this chapter will be entitled to an administrative hearing before an appointed independent hearing officer. The city manager shall designate the hearing officer for the administrative hearing. The hearing officer shall not be a city of Morro Bay employee. Compensation for the hearing officer shall not be determined by the outcome of the appeal. The tax administrator shall forward all timely filed appeals to the hearing officer who shall schedule a hearing within ninety days of the filing of the appeal. For good cause the hearing date may be reasonably postponed. The operator/appellant listed in the notice of appeal shall be notified in writing of the date, time and location of the hearing at least ten days before the date of the hearing.

E. The appeal hearing is informal and formal rules of evidence and discovery do not apply. The hearing officer may consider all relevant evidence, and may exclude repetitive or irrelevant evidence. However, rules of privilege shall be applicable to the extent they are permitted and/or required by law. The hearing officer may accept and consider late evidence or documents not presented at the time of filing the appeal only upon a showing of good cause. The hearing officer shall determine on a case-by-case basis whether good cause exists for acceptance and consideration of any evidence or documents submitted late.

F. The appellant bears the burden of proof at the hearing to establish by a preponderance of the evidence that the appealed assessment of tax, interest and/or penalties as set forth in the final determination from the tax administrator (or designee) is not due and payable.

G. The city may, at its discretion, record the hearing by stenographer or court reporter, audio recording or video recording. If the appellant requests from the city that a court reporter, stenographer or videographer be used, appellant shall bear the cost of the same and shall deposit such fees prior to commencement of the administrative hearing.

H. If the appellant, or their legal representative, fails to appear at the appeal hearing, the hearing officer may cancel the appeal hearing and send notice thereof to the appellant by certified, first class mail to the address stated on the notice of appeal. A cancellation of a hearing due to a non-appearance of the appellant, or legal representative, shall constitute the appellant's waiver of the right to appeal and failure to exhaust administrative remedies.

I. After consideration of all testimony and evidence submitted, the hearing officer shall issue a written decision to uphold or cancel the appealed assessment of tax, penalties and/or interest (in part or in whole) within twenty days specifying the reasons for the decision. The written decision of the hearing officer is final and conclusive and subject to the time limits set forth in California Code of Civil Procedure §§ 1094.5 and 1094.6 for judicial review. A copy of the written decision shall be served by certified, first class mail on the appellant. Any tax, penalty and/or interest determined to be owed and payable by the hearing officer's decision is immediately due and payable.

(Ord. 18 § 1 (part), 1965: prior code § 2809; Ord. No. 660, § 2B, 9-26-23)

It shall be the duty of every operator liable for the collection and payment to the city of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and payment to the city, which records the tax administrator shall have the right to inspect at all reasonable times.

(Ord. 18 § 1 (part), 1965: prior code § 2810)

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 Sections 3.24.140 and 3.24.150 provided a claim in writing therefor is filed with the city. The claim shall conform in all respects to the requirements set forth for claims against the city in Chapter 3.12.

(Ord. 451 § 7, 1996: Ord. 18 § 1 (part), 1965: prior code § 2811A)

An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the tax administrator that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the transient or credited to rent subsequently payable by the transient to the operator.

(Ord. 18 § 1 (part), 1965: prior code § 2811B)

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 Section 3.24.130, 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.

(Ord. 18 § 1 (part), 1965: prior code § 2811C)

No refund shall be paid under the provisions of Sections 3.24.130 through 3.24.150 unless the claimant establishes his right thereto by written records showing entitlement thereto.

(Ord. 18 § 1 (part), 1965: prior code § 2811D)

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. 18 § 1 (part), 1965: prior code § 2812)

Any person violating any of the provisions of this chapter is guilty of a misdemeanor and shall be punishable therefor by a fine of not more than five hundred dollars or by imprisonment for a period of not more than six months or by both such fine and imprisonment.

Any operator or other person who 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, and is punishable as aforesaid. Any person required to make, render, sign or verify any report or claim who 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 and is punishable as aforesaid.

(Ord. 18 § 1 (part), 1965: prior code § 2813)