San Benito County Municipal Code Art. III Transient Occupancy Tax

This article shall be known as the “Uniform Transient Occupancy Tax Law” of the County of San Benito.

(1966 Code, § 17A-1) (Ord. 499, § 1)

Unless otherwise apparent from the context, certain words and phrases used in this article are defined as follows.

HOTEL. 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 shall include 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 at a fixed location, campground or other similar structure, or portion thereof.

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

OPERATOR.

(1) Any person:

(a) Possessing or having an ownership interest in a hotel, or who is the proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity;

(b) Engaged in the business of operating a hotel; or

(c) Receiving any consideration for the rental of a hotel room for sleeping accommodations, including, without limitation, any broker, service provider, or other intermediary:

1. With which a hotel has contracted to arrange for the rental of a hotel room for sleeping accommodations; or

2. That has acquired any hotel room for subsequent rental from the hotel for sleeping accommodations.

(2) 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 article and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this article by either the principal or the managing agent, however, shall be considered to be compliance by both.

PERSON. 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. 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, property and services of any kind or nature, without any deduction therefrom whatsoever.

TAX ADMINISTRATOR. The Auditor of San Benito County.

TRANSIENT. Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license, time-share arrangement or other agreement of whatever nature, for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days. Any person so occupying space in a hotel shall be deemed to be a transient until a period of 30 consecutive calendar days has expired, unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. Unless days of occupancy or entitlement to occupancy by one person are consecutive without any break, then prior or subsequent periods of the occupancy or entitlement to occupancy shall not be counted when determining whether a period exceeds 30 calendar days.

(1966 Code, § 17A-2) (Ord. 499, § 2; Measure B Initiative, adopted 2018)

A tax of 12% is levied and imposed on all rent paid to the operator of any hotel in the unincorporated area of the county, by any transient for renting, using, or occupying a room or rooms in those hotels, to be paid and collected as provided in this article. The tax shall constitute a debt owed by the transient and the operator to the county, which debt shall be extinguished only by payment to the operator, and then to the county. 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 the tax be paid directly to the Tax Administrator.

(1966 Code, § 17A-3) (Ord. 499, § 3; Measure B Initiative, adopted 2018)

(A) No tax shall be imposed upon:

(1) Any person as to whom, or any occupancy as to which, it is beyond the power of the county to impose the tax provided for in this article;

(2) Any federal or state officer or employee when on official business; or

(3) Any officer or employee of a foreign government, which officer or employee is exempt by reason of express provisions of federal law or international treaty.

(B) No exemption shall be granted except upon a claim therefor made at the time the rent is collected and under penalty of perjury upon a form prescribed by the Tax Administrator.

(1966 Code, § 17A-4) (Ord. 499, § 4)

Each operator shall collect the tax imposed by the provisions of this article to the same extent and at the same time as the rent is collected from every transient. The amount of the 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 article.

(1966 Code, § 17A-5) (Ord. 499, § 5)

Within 30 days after the effective date of this article, or within 30 days after commencing business, whichever shall first occur, each operator of any hotel renting an occupancy to transients shall register the hotel with the Tax Administrator and obtain from him or her a transient occupancy registration certificate, which shall at all times be posted in a conspicuous place on the premises. The certificate, among other things, shall set forth the following information:

(A) The name of the operator;

(B) The address of the hotel;

(C) The date upon which the certificate was issued; and

(D) A statement as follows:

“This transient occupancy registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the uniform transient occupancy tax law by registering with the Tax Administrator for the purpose of collecting from transients the transient occupancy tax and remitting the tax to the Tax Administrator. This certificate shall not authorize any person to conduct any lawful 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 the County of San Benito. This certificate shall not constitute a permit.”

(1966 Code, § 17A-6) (Ord. 499, § 6)

(A) The tax imposed by § 5.03.052 of this article shall:

(1) Be due to the Tax Administrator at the time it is collected by the operator; and

(2) Become delinquent and subject to penalties if not received by the tax administration on or before the last working day of the month following the close of each calendar quarter.

(B) Each operator, on or before the last working day of the month following the close of each calendar quarter, shall file a return with the Tax Administrator on the forms provided by him or her of the total rents charged or chargeable as provided in § 5.03.052, whether or not received, including any rentals charged for occupancies exempt under the provisions of § 5.03.053 of this article, and the amount of tax collected for transient occupancies. Each such return shall contain a declaration under penalty of perjury, executed by the operator or his or her authorized agent, that to the best of the signer’s knowledge, the statements in the return are true, correct and complete. Amounts claimed on the return as exempt from the tax pursuant to §§ 5.03.053 and 5.03.062 of this article shall be fully itemized and explained on the return or supporting schedule. In determining the amount of “taxable receipts” on the tax return, “rent,” as defined in § 5.03.051 of this article, may not be reduced by any business expense, including, but not limited to, the amount of service charges deducted by credit card companies or commissions paid to travel agencies. At the time the return is filed, the tax fixed at the prevailing transient occupancy tax rate for the amount of rentals charged or chargeable, which are not exempt from tax pursuant to §§ 5.03.053 and 5.03.062, shall be remitted to the Tax Administrator. The Tax Administrator may establish other reporting periods and may require a cash deposit or bond or a separate trust fund bank account for any permit holder if the Tax Administrator deems it necessary in order to insure the collection of the tax, and he or she may require further information on the return. All taxes collected by operators pursuant to this article shall be held in trust for the account of the county until remittance thereof is made to the Tax Administrator.

(1966 Code, § 17A-7) (Ord. 499, § 7)

(A) Original delinquencies. Any operator who shall fail to remit any tax imposed by the provisions of this article within the time required shall pay a penalty in the amount of 10% of the tax, in addition to the amount of the tax.

(B) Continued delinquencies. Any operator who shall fail 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 in the amount of 10% of the tax, in addition to the amount of the tax and the 10% penalty first imposed.

(C) Fraud. If the Tax Administrator shall determine that the non-payment of any remittance due pursuant to the provisions of this article is due to fraud, a penalty in the amount of 100% of the amount of the tax shall be added thereto, in addition to the penalties set forth in divisions (A) and (B) of this section.

(D) Interest. In addition to the penalties imposed, any operator who shall fail to remit any tax imposed by the provisions of this article shall pay interest at the rate of 1% 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 and interest merged with tax. Every penalty imposed and such interest as accrues, pursuant to the provisions of this section, shall become a part of the tax required to be paid by the provisions of this article.

(1966 Code, § 17A-8) (Ord. 499, § 8)

If any operator shall fail or refuse to collect the tax and to make, within the time provided in this article, any report and remittance of the tax, or any portion thereof, required by the provisions of this article, the Tax Administrator shall proceed in such manner as he or she may deem best to obtain the facts and information on which to base his or her estimate of the tax due. As soon as the Tax Administrator shall procure the facts and information as he or she is able to obtain upon which to base the assessment of any the tax imposed by the provisions of this article and payable by any operator who has failed or refused to collect the tax and to make the report and remittance, the Tax Administrator shall proceed to determine and assess against the operator the tax, interest and penalties provided for by the provisions of this article. In the event the determination is made, the Tax Administrator shall give 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 address as it appears in the records of the Tax Administrator. The operator, within ten days after the service or mailing of the notice, may make an application in writing to the Tax Administrator for a hearing on the amount assessed. If an 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 an 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 in such notice why the amount specified therein should not be fixed for the tax, interest and penalties. At such hearing, the operator may appear and offer evidence why the specified tax, interest and penalties should not be so fixed. After the 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 the determination and the amount of the tax, interest and penalties. The amount determined to be due shall be payable after 15 days, unless an appeal is filed as provided in § 5.03.059.

(1966 Code, § 17A-9) (Ord. 499, § 9)

Any operator aggrieved by any decision of the Tax Administrator with respect to the amount of the tax, interest and penalties, if any, may appeal to the Board of Supervisors by filing a notice of appeal with the county’s Clerk within 15 days after the service or mailing of the determination of the tax due. The Board of Supervisors shall fix a time and place for hearing the appeal, and the county’s Clerk shall give notice in writing to the operator at his or her last known place of address. The findings of the Board of Supervisors shall be final and conclusive and shall be served upon the appellant in the manner prescribed in this article for the service of a notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(1966 Code, § 17A-10) (Ord. 499, § 10)

Each operator shall notify the Tax Administrator ten days prior to the sale or cessation of business for any reason, and returns and remittances shall be due immediately upon the sale or cessation of business.

(1966 Code, § 17A-11) (Ord. 499, § 11)

It shall be the duty of every operator liable for the collection and payment to the county of any tax imposed by the provisions of this article to keep and preserve, for a period of three years after the date any the tax is due and payable, all records as may be necessary to determine the amount of the tax as he or she may have been liable for the collection of, and payment to, the county, which records the Tax Administrator shall have the right to inspect at all reasonable times during regular business hours.

(1966 Code, § 17A-12) (Ord. 499, § 12)

(A) Whenever the amount of any tax, interest or penalty has been overpaid, or paid more than once, or erroneously or illegally collected or received by the county, pursuant to the provisions of this article, the amount may be refunded as provided in divisions (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 after the date of payment. The claim shall be on forms furnished by the Tax Administrator.

(B) Any 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, 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, paid more than once, or erroneously or illegally collected or received by the county, by filing a claim in the manner provided in division (A) of this section, but only 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 pursuant to the provisions of this section unless the claimant establishes his or her right thereto by written records showing entitlement thereto.

(1966 Code, § 17A-13) (Ord. 499, § 13)

Whenever any operator fails to comply with any provision of this article relating to the transient occupancy tax or any rule or regulations of the Tax Administrator relating to the tax prescribed and adopted by this article, the Tax Administrator, upon a hearing, after giving the operator ten days written notice, specifying the time and place of the hearing and requiring him or her to show cause why his or her permit or permits should not be revoked, may suspend or revoke any one or more of the permits held by the operator. The Tax Administrator shall give to the operator written notice of the suspension or revocation of any of his or her permits. The notices required by this section may be served personally or by mail in the manner prescribed for the service of a notice of a deficiency determination. The Tax Administrator shall not issue a new permit after the revocation of a permit, unless he or she is satisfied that the former holder of the permit will comply with the provisions of this article relating to the transient occupancy tax and the regulations of the Tax Administrator.

(1966 Code, § 17A-14) (Ord. 499, § 14)

During any period of time during which a permit has not been issued, or is suspended, revoked or otherwise not validly in effect, the Tax Administrator may require that the hotel be closed.

(1966 Code, § 17A-15) (Ord. 499, § 15)

If any amount required to be remitted or paid to the county pursuant to this article is not remitted or paid when due, the Tax Administrator, within three years after the amount is due, may file for record in the office of the county’s Recorder, a certificate specifying the amount of tax, penalties and interest due, the name and address as they appear in the records of the Tax Administrator of the operator liable for the same, and the fact that the Tax Administrator has complied with all the provisions of this article in the determination of the amount required to be remitted and paid. From the time of the filing for record, the amount required to be remitted, together with penalties and interest, shall constitute a lien upon all real property in the county owned by the operator or afterwards and before the lien expires acquired by him or her. The lien shall have the force, effect and priority of a judgment lien and shall continue for ten years after the time of filing the certificate, unless sooner released or otherwise discharged.

(1966 Code, § 17A-16) (Ord. 499, § 16)

(A) The amounts required to be remitted and/or paid by any operator pursuant to this article, with penalties and interest, shall be satisfied first in any of the following cases:

(1) Whenever the person becomes insolvent;

(2) Whenever the person makes a voluntary assignment of his or her assets;

(3) Whenever the estate of the person is in the hands of executors, administrators or heirs, is insufficient to pay all of the debts due from the deceased; and

(4) Whenever the estate and effects of an absconding, concealed or absent person required to pay any amount pursuant to this article is levied upon by process of law. This article shall not give the county a preference over any recorded lien which attached prior to the date when the amounts required to be paid become a lien.

(B) The preference given to the county by this section shall be subordinate to the preferences given to claims for personal services by Cal. Code of Civil Procedure §§ 1204 through 1208.

(1966 Code, § 17A-17) (Ord. 499, § 17)

At any time within three years after any operator is delinquent in the remittance or payment of any amount required by this article to be remitted or paid, or within three years after the last recording of a certificate pursuant to § 5.03.065 of this article, the Tax Administrator may issue a warrant for the enforcement of any lien and for the collection of any amount required to be paid to the county pursuant to this article. The warrant shall be directed to any sheriff or marshal or constable and shall have the same effect as a writ of execution. The warrant shall be levied and the sale made pursuant to it, in the same manner and with the same effect as a writ of execution. The Tax Administrator, and not the court, shall approve the fees for publication in a newspaper.

(1966 Code, § 17A-18) (Ord. 499, § 18)

At any time within three years after any operator is delinquent in the remittance or payment of any amount due pursuant to this article, the Tax Administrator may forthwith collect the amount by seizing any property, real or personal, of the operator and sell the property, or a sufficient part of it, at a 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 transient occupancy taxes due shall be only of property of the operator not exempt from execution under the provisions of the California Code of Civil Procedure.

(1966 Code, § 17A-19) (Ord. 499, § 19)

If any operator liable for any amount pursuant to this article sells his or her business or quits the business, his or her successors or assigns shall withhold a sufficient amount from the purchase price to cover the amount owing until the former owner produces a receipt from the Tax Administrator showing that the amount has been paid or a certificate stating that no amount is due.

(1966 Code, § 17A-20) (Ord. 499, § 20)

If the purchaser of a hotel fails to withhold from the purchase price as required, he or she shall become personally liable for the payment of the amount required to be withheld by him or her to the extent of the purchase price, valued in money. Within 60 days after receiving a written request from the purchaser for a certificate, or within 60 days after the date the records of the former owner are made available for audit, whichever period expires last, but in any event not later than 90 days after receiving the request, the Tax Administrator shall either issue the certificate or mail a notice to the purchaser at his or her address as it appears in the records of the Tax Administrator of the amount which shall be paid as a condition of issuing the certificate. Failure of the Tax Administrator to mail the notice will release the purchaser from any further obligation to withhold the purchase price as provided in this article. The time within which the obligation of the successor may be enforced shall start to run at the time the operator sells his or her business or at the time the determination against the operator becomes final, whichever shall last occur.

(1966 Code, § 17A-21) (Ord. 499, § 21)

If any operator is delinquent in the remittance or payment of the amount required to be remitted or paid by him or her pursuant to this article, or in the event a determination has been made against him or her for the remittance of the tax and the payment of the penalty, the county, within three years after the tax obligation becomes due, may give notice thereof by personal delivery or by registered mail to the operator and any persons, including the state or any political subdivision thereof, 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 operator’s credits, other personal property or debts, until the county consents to a transfer or disposition or until 60 days elapse after the receipt of the notice, whichever expires earlier. All persons, upon the receipt of the notice, whichever expires earlier. All persons, upon the receipt of the notice, shall advise the county immediately of all such credits, other personal property or debts in their possessions, under their control or owing by them. If the notice seeks to prevent the transfer or other disposition of a deposit in a bank or other credits or personal property in the possession or under the control of the bank, to be effective the notice shall be delivered or mailed to the branch or office of the bank at which the deposit is carried or at which the credits or personal property is held. If any person so notified makes a transfer or disposition of the property or debts required to be held pursuant to this section during the effective period of the notice to withhold, he or she shall be liable to the county to the extent of the value of the release up to the amount of the indebtedness owed by the taxpayer to the county.

(1966 Code, § 17A-22) (Ord. 499, § 22)

The Tax Administrator, for good cause, may extent for not to exceed 30 days the time for making any return or paying any amount required to be paid pursuant to this article. The extension may be granted at any time, provided a request therefor is filed with the Tax Administrator within or prior to the period for which the extension may be granted. Any person to whom an extension is granted shall pay, in addition to the tax, interest at the rate of 1% per month, or fraction thereof, from the date on which the tax would have been due without the extension, until the date of payment.

(1966 Code, § 17A-23) (Ord. 499, § 23)

It shall be unlawful for any person having an administrative duty pursuant to this article to make known in any manner whatever the business affairs, operation or information obtained by an investigation of the records of any operator or any other person visited or examined in the discharge of his or her official duty, or the amount or source of income, profits, losses or 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 amount of any unpaid tax or amounts of tax, penalties and interest required to be collected.

(1966 Code, § 17A-24) (Ord. 499, § 24)

(A) Except for the failure of an operator to pay to the Tax Administrator taxes due pursuant to this article, which failure to pay shall be punishable as a felony, pursuant to Cal. Penal Code § 424, every violation of this article shall be a misdemeanor and punishable by a fine not exceeding $500, or by imprisonment in the county jail for not more than six months, or by both the fine and imprisonment.

(B) If the offense is not otherwise punishable as set forth in division (A) of this section, any person wilfully failing to comply with, or knowingly violating any of the provisions of this article shall be guilty of a misdemeanor, punishable as provided in division (A) of this section.

(C) Any operator or other person who wilfully fails or refuses to register as required by this article, 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, shall be guilty of a misdemeanor. Any person required to make, render, sign or verify any report or claim, who willfully makes any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due required by this article to be made shall be guilty of a misdemeanor, punishable as provided in division (A) of this section.

(1966 Code, § 17A-25) (Ord. 499, § 25)