Rocklin Municipal Code Ch. 5.24 Transient Occupancy Tax

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

(Ord. 879 Exh. A (part), 2003).

Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:

"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, mobile home or house trailer, or campground at a fixed location or other similar structure or portion thereof.

"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.

"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.

"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 city finance manager, or his or her designee.

"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 this chapter may be considered.

(Ord. 879 Exh. A (part), 2003).

(Ord. No. 1152, § 1, 6-28-2022)

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. Such 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 be paid directly to the tax administrator.

The tax administrator may make rules and regulations not inconsistent with the provisions of this chapter as may be necessary or desirable to aid in the enforcement and administration of this chapter. Any such rule or regulation that may affect the amount of tax owed the city shall be subject to approval of the city council. The rules and regulations shall be filed in the office of the tax administrator and maintained in an orderly and readily accessible manner. Taxes are considered paid only upon receipt of the return, and penalty, interest, and completed exemption certificate when appropriate. The burden to secure and comply with the rules and regulations shall be upon the operator.

(Ord. 879 Exh. A (part), 2003).

(Ord. No. 1152, § 2, 6-28-2022)

No tax shall be imposed upon any person if the imposition is beyond the power of the city as herein provided. Without limitation, the following are specifically exempt:

Any federal or state employee when on official business.

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

Any of the exclusions and/or exemptions set forth in California Revenue and Tax Code section 7280 et seq., as may be amended from time to time.

No exemption shall be granted except upon a claim made at the time rent is collected and under penalty of perjury upon a form prescribed by the tax administrator. When a claim of exemption is defective, the operator:

1. Shall be responsible for all taxes due with respect to the purposed exempt transient, and;

2. The tax administrator shall give notice to the operator of all taxes due as a result of rejection of the exemption claims. The operator shall pay all sums due within ten working days of notification.

(Ord. 879 Exh. A (part), 2003).

(Ord. No. 1152, § 3, 6-28-2022)

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 of the tax 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. 879 Exh. A (part), 2003).

Within thirty days after commencing business each operator of any hotel renting occupancy to transients shall register such hotel with the tax administrator and obtain from him or her a "transient occupancy registration certificate" to be at all times posted in a conspicuous place on the premises. Such 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 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. 879 Exh. A (part), 2003).

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 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 he or she deems it necessary in order to insure collection of the tax and he or she 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.

No reports or statements of an operator shall be conclusive as to any matter affected by this chapter, nor shall the city be precluded from collecting any sum actually due and payable. Each report or statement and each of the items therein are subject to audit and verification pursuant to the provisions of this chapter.

(Ord. 879 Exh. A (part), 2003).

An operator is relieved from liability for the remission to the city of the tax imposed under this chapter insofar as the measure of the tax is represented by accounts which have been found to be worthless and charged off for income tax purposes. If the operator has previously remitted the tax, he or she may, pursuant to procedures prescribed by the tax administrator, take as a deduction the amount of tax previously remitted for the worthless and charged off account. If any such accounts are thereafter in whole or in part collected by the operator, the amount so collected shall be included in the first return filed after such collection and the tax on such amount paid with the return.

(Ord. 879 Exh. A (part), 2003).

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 (including accrued and unpaid penalties and interest) 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 (including accrued and unpaid penalties and interest) 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, and in addition to any other remedy available to the city in law or in equity, and in addition to any criminal liability.

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. 879 Exh. A (part), 2003).

If any operator shall fail or refuse to collect the tax under this chapter 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 as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the tax administrator shall procure such facts and information as he or she 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 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 his or her 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 such notice why such 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 5.24.110 of this chapter.

(Ord. 879 Exh. A (part), 2003).

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 city 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 city 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. 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. 879 Exh. A (part), 2003).

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 may require any operator, upon reasonable written notice, to provide the tax administrator with access to all of the operator's books and records relating to the operator's operation of the hotel, including rents charged by such operator that are subject to a tax pursuant to this chapter. If, as a result of any such audit, it is determined that a return required to be filed by such operator pursuant to Section 5.24.070 hereof is inaccurate and did not include and report the correct amount of tax due pursuant to this chapter, the operator shall forthwith pay to the city all taxes that are shown to be due as a result of such audit, regardless of whether the operator collected such taxes.

If an audit conducted pursuant to the provisions of this section reflects that in any calendar month there was under-reporting of taxes due by five percent or more, which under-reporting was not corrected by the operator prior to the commencement of the audit, all costs associated with the audit shall be borne by the operator, and the cost thereof shall be subject to collection as a civil debt by the city. For this purpose, costs shall include all consultant costs, all staff costs, and other expenses incurred by the city.

(Ord. 879 Exh. A (part), 2003).

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, that 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 or her right thereto by written records showing entitlement thereto.

(Ord. 879 Exh. A (part), 2003).

In addition to and cumulative with the penalties and interest specified in Section 5.24.090, the city shall have available to it any remedy specified in federal, state, or local law, including but not limited to those specified in this section.

A. Civil Action.

1. 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. Nothing in this section, or in any other section of this chapter, shall alter or otherwise affect the operator's status as a trustee of public funds in the operator's hands with respect to taxes collected by the operator under the provisions of this chapter, or its liability as a trustee. The city shall have the discretion to bring civil action on the basis that the tax collected is a debt of the operator, or on the basis that the operator has violated its fiduciary duty as trustee, or on both of those bases, or on any other basis available under this ordinance or otherwise.

2. If a civil action is required to enforce the collection of a tax from any person, and a recovery of such tax in any amount is granted in such a civil judicial proceeding, the city shall be entitled to recover its reasonable attorney fees, court costs, and its costs of the administrative process under this chapter, including, but not limited to other direct and indirect costs incurred by the city with reference to such litigation.

3. An action to collect the transient occupancy tax must be commenced within three years of the date the transient occupancy tax becomes delinquent. An action to collect the penalty for nonpayment of the transient occupancy tax must be commenced within three years of the date the penalty accrues.

B. Criminal Enforcement.

1. Unless provided otherwise, any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable as provided in Title 1 of this code.

2. 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, or who refuses to provide the tax administrator with access to the written records required to be kept by this chapter, is guilty of a misdemeanor.

3. 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.

4. Pursuant to the provisions of California Penal Code Section 836.5, any officer or employee of the administrative services department of the city holding the position of finance manager or senior administrative analyst may enforce the provisions of this chapter by requesting that the Rocklin Police Department issue a criminal citation to a person or arrest a person without a warrant whenever that officer or employee has reasonable cause to believe that the person to be arrested has committed a misdemeanor in his or her presence which is a violation of any of the provisions of this chapter. The police officer acting under the authority of this section shall follow the citation-release procedures prescribed in Chapter 5C, Title 3, Part 2 of the California Penal Code (sections 853.5, et seq.) or such procedure hereafter enacted by the state of California.

C. Security.

The tax administrator, whenever he or she deems it necessary to insure compliance with this chapter, may require any operator to post such security as the tax administrator, in his or her sole discretion, may determine to be reasonable. The amount of the security shall be fixed by the tax administrator, but, except as noted below, shall not be greater than twice the estimated average liability of operators filing returns pursuant to Section 5.24.070 or fifty thousand dollars, whichever amount is the lesser. The limitations provided in this chapter apply regardless of the type of security placed with the tax administrator, which shall be determined in the sole and exclusive discretion of the tax administrator. The amount of the security may be increased or decreased by the tax administrator subject to the limitations provided in this chapter. The tax administrator may sell the security at public auction if it becomes necessary to do so to recover any tax or amount required to be collected, or interest, or penalty due. Notice of the sale may be served upon the person who placed the security personally or by mail; if by mail, service shall be addressed to the person at his or her address as it appears in the records of the tax administrator. Security in the form of a bearer bond issued by the United States or the state, and which has a prevailing market price may, however, be sold by the tax administrator at private sale at a price not lower than the prevailing market price thereof. Upon any sale any surplus above the amounts due shall be returned to the person who placed the security.

D. Lien.

1. If any tax is not paid when due, the tax administrator may, within three years after the amount is due, record in the office of the county recorder of such counties as the tax administrator may determine, a certificate of lien which specifies the amount of tax due and the name and address of the operator owning the tax. The certificate shall include a statement that the tax administrator has complied with all legal requirements in the determination of the tax owed, and a legal description of the property of the owner. Upon recording the certificate, the tax, together with any accumulated penalties and interest, constitutes a lien upon all real property owned or thereafter acquired by the operator. The lien has the force, effect, and priority of a judgment lien, and shall continue for ten years from the time of filling of the certificate unless sooner released or otherwise discharged.

2. At any time after the recording of a certificate of lien, the tax administrator may issue a check or warrant directed to any sheriff or marshal for the enforcement of the lien and the collection of the tax. The warrant shall have the same effect as a writ of execution, and be executed in the same manner and with the same effect as a levy and sale pursuant to writ of execution. The tax administrator may pay or advance to the sheriff or marshal such fees, commissions, and expenses for services as are provided by law.

3. Priority of Lien. 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: (i) whenever the operator is insolvent; (ii) whenever the operator makes a voluntary assignment of his or her assets; (iii) whenever the estate of the operator in the hands of executors, administrators, or heirs is insufficient to pay all the debts due from the deceased; and (iv) 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. This chapter does not give the city a preference over any recorded lien that is filed prior to the date when the amounts required to be paid became a lien. The preference given to the city by this section shall be subordinate to the preferences given to claims for personal services by Sections 1204 and 1206 of the California Code of Civil Procedure.

E. Seizure and Sale. At any time within three years after any operator is delinquent in the payment of any amount, the tax administrator may 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 shall be only of property of the operator not exempt from execution under the provisions of the California Code of Civil Procedure.

F. Successor Liability.

1. If any operator liable for any amount under this chapter sells his or her business or quits the business, a successor or assignee shall withhold sufficient funds from the purchase price to cover such amount until the former owner produces a receipt from the tax administrator showing that the tax has been paid or a certificate stating that no amount is due.

2. If a purchaser of a hotel fails to withhold funds from the purchase price as required, he or she shall become personally liable for the payment of the amount required to be withheld to the extent of the purchase price, valued in money. Within sixty days after receiving a written request from the purchaser for a certificate, or within sixty 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 ninety 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 shall release the purchaser from any further obligation to withhold the 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 the business or at the time that the determination against the operator becomes final, whichever event occurs the later.

3. Sale of a hotel, dismissal of the operator, or other termination of the operator's rights to operate the facility shall not relieve him or her from liability for taxes due or owing under this chapter.

G. Withhold Notice. If any operator is delinquent in the remittance or payment of the amount required to be remitted or paid by him or her when a tax, penalty, and interest determination has been made by the tax administrator as provided in this chapter, the city may, within three years after the tax obligation became due, deliver a withholding notice personally or by registered mail to any or all persons, including the state or any local government or agency, 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 sixty 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 such credits, other personal property, or debts in their possession, under their control, or owning by them. If such notices seek to prevent the transfer or other disposition of a deposit in a bank or other credits or personal property or under the control of the bank, to be effective the notice shall be delivered or mailed to the branch or office of such bank at which the deposit is carried or at which such 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 amount transferred or disposed up to the amount of the indebtedness owed by the taxpayer to the city.

(Ord. 879 Exh. A (part), 2003).

The tax administrator shall pay into the treasury all moneys, including taxes and penalties, collected by him or her pursuant to this chapter for deposit to the city general fund, to be used for general municipal purposes.

(Ord. 879 Exh. A (part), 2003).

It is unlawful for any person having an administrative duty relating to the tax 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 particular 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. An operator may, by request made to the tax administrator, designate a person to whom information specified in this section may be released. The request shall be in writing and shall specify the information that the tax administrator shall be authorized to release.

(Ord. 879 Exh. A (part), 2003).