National City Municipal Code Ch. 4.32 Transient Occupancy Tax

This chapter shall be known as the transient occupancy tax ordinance of the city.

(Ord. 1100 § 1, 1964)

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 temporary occupancy by guests for dwelling, lodging or sleeping purposes, and includes any inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, any mobile home, house trailer or recreational vehicle located at a fixed location, or any other similar structure or portion thereof used for temporary occupancy.

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 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 purpose 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 treasurer or finance director.

G. "Transient" means any person who exercises temporary occupancy or is entitled to temporary occupancy in a hotel, as defined, by reason of concession, permit, right of access, license or other agreement that is subject to the provisions of Civil Code Section 1940(b).

(Ord. 2195 § 1 (part); Ord. 1100 § 2, 1964)

A. 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 for each day of the first thirty days of occupancy. In determining whether a person is a transient subject to tax, uninterrupted periods of time extending both prior and subsequent to the effective date of the ordinance codified in this chapter may be considered. The tax is due for each full or partial consecutive period of occupancy by that transient. Said 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 tax administrator.

B. Any tax collected shall be refunded to a transient guest after his or her occupancy exceeds thirty continuous days. Refund of tax shall not alter the transient status of the guest under Civil Code Section 1940(b).

(Ord. 2195 § 1 (part); Ord. 2032 § 1, 1992: Ord. 1656 § 1, 1978; Ord. 1629 § 4, 1978; Ord. 1212 § 1, 1968: Ord. 1100 § 3, 1964)

A. No tax shall be imposed:

1. When hotel rents are directly paid by the United States government or its agencies or instrumentalities, or by a transient while he or she is on official business as an employee of the United States government or a federal agency or instrumentality. This exemption does not exempt a transient who is employed by a business entity that is under contract to a federal entity from payment of the tax for a room rented by that transient even though the payment is later to be reimbursed by the federal entity;

2. When hotel rents are directly paid by the state of California or a state agency. This exemption does not exempt a transient who is employed by the state from payment of the tax for a room rented by that transient even though the payment is later to be reimbursed to the transient by the state.

3. When the transient is by treaty or federal or state law exempt from payment of transient occupancy taxes.

B. No exemption shall be granted under subsections (A)(1), (A)(2) or (A)(3) except upon a claim therefore made at the time rent is collected and under penalty of perjury upon a form prescribed by the tax administrator. Documentation in support of the claim for exemption, such as copies of government issued contracts, official travel orders, government credit card payment vouchers, purchase orders or checks, shall be presented with the exemption form. Completed exemption forms along with supporting documentation shall be returned to the tax administrator with the corresponding tax remittance.

(Ord. 2195 § 1 (part); Ord. 2056 § 1, 1993: Ord. 1100 § 4, 1964)

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 hereinafter provided.

(Ord. 1100 § 5, 1964)

Within thirty days after the effective date of this chapter, or within thirty days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register the hotel with the tax administrator and obtain from him a "Transient Occupancy Registration Certificate" to beat 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. "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. 1100 § 6, 1964)

Each operator shall, on or before the last day of the month following the close of each calendar month, 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 the tax administrator, 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, with any exemption forms and supporting documentation applying to the reporting period. The return is filed as of the date of the receipt issued by the tax administrator or if mailed as of the date of postmark, provided payment is actually received by the tax administrator. The tax administrator may establish shorter reporting periods for any certificate holder when 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.

(Ord. 2195 § 1 (part); Ord. 2056 § 2, 1993: Ord. 1100 § 7, 1964)

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 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 and one-half 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 to be paid.

F. Exemptions Disallowed. Any exemption deducted from total rents without proper documentation or submission of the exemption form shall be disallowed by the tax administrator. The operator shall have thirty days from notice by the tax administrator or his/her delegate to submit forms and documentation before the tax and a penalty assessed on the disallowed exemption amount is due.

(Ord. 2234 § 3, 2003; Ord. 2056 § 3, 1993; Ord. 1100 § 8, 1964)

If any operator fails or refuses to collect said 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 shall proceed in such manner as he deems 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 and payable by any operator who has failed or refused to collect the same and to make such report and remittance, 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 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 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 herein to the operator to show cause at a time and place fixed in said notice why said 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 herein 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 4.32.100.

(Ord. 1100 § 9, 1964)

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 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 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. 1100 § 10, 1964)

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 calendar years, excluding the then current year, all records as may be necessary to determine the amount of such tax as the operator 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. 2195 § 1 (part); Ord. 1100 § 11, 1964)

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 years of the date of payment. The claim 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 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 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 showing entitlement thereto.

(Ord. 1100 § 12, 1964)

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 is liable to an action brought in the name of the city for the recovery of such amount.

(Ord. 1100 § 13, 1964)

A. Any person violating any of the provisions of this chapter is guilty of an infraction and punishable as prescribed in Section 1.20.010.

B. 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 an infraction and is punishable as aforesaid.

C. 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 an infraction and is punishable as aforesaid.

(Ord. 1621, 1978; Ord. 1358 § 2 (part), 1973; Ord. 1100 § 14, 1964)