Rancho Palos Verdes Municipal Code Ch. 3.16 Transient Occupancy Tax

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

(Code 1981, § 3.16.010; Ord. No. 7, § 1(part), 1973)

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

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.

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

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 their 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 their 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 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.

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.

Tax administrator means the director of finance of the city or other person designated by the city manager.

Temporary means a period of 30 consecutive calendar days or less, counting portions of calendar days as full days. In the event that any person rents a hotel room for more than 30 consecutive calendar days, the determination of whether the use was temporary, for purposes of applying this chapter, shall be based on the time period of actual occupancy of the room by a natural person and not the duration of the room reservation, lease or rental agreement. In determining whether the use is temporary, uninterrupted periods of time, extending both prior and subsequent to the effective date of the ordinance from which this chapter is derived, may be considered by the tax administrator.

Transient means any person who exercises temporary occupancy or is entitled to temporary occupancy. Any person who exercises temporary occupancy or is entitled to temporary occupancy shall be deemed to be a transient until 30 consecutive calendar days of actual occupancy have elapsed unless there is an agreement in writing between the operator and the occupant obliging the occupant to pay market rate for the occupancy for a period of at least 31 consecutive days. The tax administrator may develop and promulgate standard forms setting forth the minimum substance of such agreements and may require submission of such forms with the returns required by section 3.16.070 of this chapter.

(Code 1981, § 3.16.020; Ord. No. 7, § 1(part), 1973; Ord. No. 369, § 1, 2001; Ord. No. 424, § 1, 2005)

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. 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 tax administrator.

B. In the event that an agreement between the hotel and any person for occupancy, as defined in this chapter, for a period in excess of 30 days, and in the event that such person allows occupancy by another person for 30 days or less as a subtenant, guest, licensee or permittee, the person who has made the agreement with the hotel shall be subject to and shall pay the tax required by this chapter.

(Code 1981, § 3.16.030; Ord. No. 7, § 1(part), 1973; Ord. No. 270, § 1, 1991; Ord. No. 424, § 2, 2005)

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 provided in this chapter;

B. Any federal or state officer or employee, including an employee of a federal or state credit union, when on official business;

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

D. Any officer or employee of an insurer when on official business for the insurer. For the purposes of this exemption, the term "insurer" shall have the meaning set forth in Calif. Const. art. XIII, § 28.

No exemption shall be granted except upon a written claim therefor made at the time rent is collected upon a form complying with Revenue and Taxation Code § 7280(e), or any successor statute. Such form shall be signed under penalty of perjury. The tax administrator may require submission of copies of such forms with the returns required by section 3.16.070.

(Code 1981, § 3.16.040; Ord. No. 7, § 1(part), 1973; Ord. No. 424, § 3, 2005)

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.

(Code 1981, § 3.16.050; Ord. No. 7, § 1(part), 1973)

Within 30 days after the effective date of this chapter, or within 30 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 them a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises. Said 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.

(Code 1981, § 3.16.060; Ord. No. 7, § 1(part), 1973)

A. 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 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 if 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 the tax administrator deems it 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.

B. In accordance with Revenue and Taxation Code § 7056, all tax returns and information furnished by any operator pursuant to this chapter are confidential and shall not be disclosed for public inspection except as otherwise required by Revenue and Taxation Code § 7056 or any successor statute.

(Code 1981, § 3.16.070; Ord. No. 7, § 1(part), 1973; Ord. No. 424, § 4, 2005)

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 30 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 25 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 in this chapter required to be paid.

(Code 1981, § 3.16.080; Ord. No. 7, § 1(part), 1973)

A. 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 such manner as they may deem best to obtain facts and information on which to base their estimate of the tax due.

B. As soon as the tax administrator procures such facts and information as they are 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, they 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 their 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 section to the operator to show cause at a time and place 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 15 days unless an appeal is taken as provided in this section.

(Code 1981, § 3.16.090; Ord. No. 7, § 1(part), 1973)

Any operator aggrieved by any decisions of the tax administrator with respect to the amount of such 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 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 their 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 in section 3.16.090 for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Code 1981, § 3.16.100; Ord. No. 7, § 1(part), 1973)

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 four years, all records as may be necessary to determine the amount of such tax as they 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.

(Code 1981, § 3.16.110; Ord. No. 7, § 1(part), 1973; Ord. No. 424, § 5, 2005)

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 one year of the date of payment. Any action brought against the city pursuant to this section shall be subject to the provisions of Government Code §§ 945.6 and 946. Compliance with this section shall be a prerequisite to a suit thereon. The claim shall be on forms furnished by the tax administrator, shall be presented in accordance with the requirements of section 3.24.030 and shall clearly establish the claimant's right to the refund by written records demonstrating entitlement thereto. It is the intent of the city that the one-year claim requirement of this subsection be given retroactive effect; provided, however, that any claims that arose prior to the enactment date of the one-year claims period set forth in the subsection, which are not otherwise barred by the then-applicable statute of limitations or claim procedure, must be filed with the tax administrator as provided in this title within 90 days following the effective date of the ordinance from which this section is derived.

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 their right thereto by written records showing entitlement thereto.

(Code 1981, § 3.16.120; Ord. No. 7, § 1(part), 1973; Ord. No. 403, § 1, 2004)

A. 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.

B. Failure of an operator to collect tax required to be paid by any transient shall not excuse the operator's obligation under this chapter. An operator must pay to the city any tax required to be paid by any transient, whether or not the operator collects such tax from that transient.

C. If any amount required to be paid to the city under this chapter is not paid when due, the tax administrator may, within ten years after the amount is confirmed according to the procedure set forth in section 3.16.090 of this chapter, file for record in the office of the Los Angeles County recorder a certificate specifying the amount of tax, penalties, and interest due; the name and address, as it appears on the tax administrator's records, of the operator liable for the tax, penalties, and interest; and the fact that the tax administrator has complied with all provisions of this chapter in the determination of the amount required to be paid. From the time of filing for record, the amount of the tax, penalties, and interest constitutes a lien upon any real property in the county owned by the operator or acquired by the operator thereafter. This 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, or unless renewed for subsequent periods in the manner prescribed by law. This chapter does not give the city a preference over any recorded lien that was attached before the date when the amounts required to be paid became a lien.

D. The amounts required to be paid by any operator under this chapter, together with all penalties and interest accrued thereon, shall be satisfied first in any of the following cases:

1. Whenever the operator is insolvent;

2. Whenever the operator makes a voluntary assignment of its assets;

3. Whenever the estate of the operator in the hands of executors, administrators, heirs, or receivers is insufficient to pay all debts;

4. Whenever the estate and effects of an absconding, concealed, or absent operator required to pay any amount under this chapter are levied upon by process of law.

(Code 1981, § 3.16.130; Ord. No. 7, § 1(part), 1973; Ord. No. 424, § 6, 2005)

A. Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and is punishable by a fine not exceeding $1,000.00 or by not more than six months imprisonment in the county jail or by both such fine and imprisonment.

B. Any operator or other person who fails or refuses to register as required in this chapter, 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 set forth in subsection A of this section. 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 and required by this chapter to be made, is guilty of a misdemeanor and is punishable as set forth in subsection A of this section.

(Code 1981, § 3.16.140; Ord. No. 7, § 1(part), 1973; Ord. No. 369, § 2, 2001)

A. Each operator who is transferring, selling, or terminating its business shall notify the tax administrator in writing at least 30 days in advance of the date of transfer, sale, or termination. If the decision to sell, transfer, or terminate the business is made fewer than 30 days before the transfer, sale, or termination occurs, the operator shall notify the tax administrator immediately upon making that decision and in no event later than the date of transfer, sale, or termination. The operator shall concurrently notify any purchaser or transferee of its hotel in writing of the purchaser's or transferee's potential responsibility for unpaid collected taxes, if any, as set forth in this chapter and Revenue and Taxation Code § 7283.5, or any successor statute.

B. Upon cessation of business, whether by sale, transfer, or termination, an operator shall, on or before the same day of the next month following the cessation of business, or on the last day of that month if no corresponding day exists, make a return to the tax administrator on forms approved by the tax administrator of the total taxable rents charged, the amount of tax collected for the reporting period ending on the cessation date, remittances made, if any, and the balance of the tax due. The balance of tax due, if any, shall be remitted to the tax administrator at the time the final return is filed. After filing the final return and remitting the balance due, the operator shall make its records of account available for a closeout audit by the tax administrator or their designee. Returns filed and taxes remitted and actually received by the tax administrator on or before the same day of the next month following cessation of business, or on the last day of that month if no corresponding day exists, shall be timely filed and remitted; otherwise, the taxes are delinquent and subject to the penalties imposed by this chapter.

C. Any person purchasing an ongoing hotel business may apply to the tax administrator for a tax clearance certificate showing the tax due, if any, from the selling operator as of a date specified in the tax clearance certificate request. For purposes of this section, successive hotel businesses conducted without substantial interruption at the same hotel shall constitute an ongoing hotel business:

1. The issuance and effect of such certificates shall be as set forth in Revenue and Taxation Code § 7283.5, or any successor statute.

2. Before requesting records and conducting the audit permitted by Revenue and Taxation Code § 7283.5(b), or any successor statute, the tax administrator shall proceed in such manner as they may deem best to obtain facts and information on which to base an estimate of the tax due. The tax administrator shall notify the selling operator of this estimate when requesting records for audit. If the selling operator fails to provide records in response to the request within 30 days after the serving or mailing of the estimate and record request, the tax administrator may issue a tax certificate in the amount of the estimate.

3. The city council may, by resolution, set an administrative fee for issuance of any such certificate.

(Code 1981, § 3.16.150; Ord. No. 424, § 8, 2005)

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter or any part thereof. The city council declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases is declared unconstitutional.

(Code 1981, § 3.16.160; Ord. No. 7, § 1(part), 1973; Ord. No. 424, § 7, 2005)