San Clemente Municipal Code Art. II Hotels

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 operator or operator's agent shall collect the transient occupancy tax and hold the funds solely as a trustee for the City, and has a fiduciary duty to hold those funds in the name of the City and only use those funds for the purposes of paying to the City the applicable transient occupancy tax. 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. The operator shall maintain, for a period of four (4) years, not including the present year, copies of all receipts generated pursuant to this section. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the transient occupancy tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner provided in this chapter.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

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 (4) years, not including the present 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 Finance and Administrative Services Director shall have the right to inspect at all reasonable times. The records maintained by the operator under this section shall include, but not limited to, the following:

A. A written report that includes daily records of all of the following: (i) name of person occupying the room; (ii) room number occupied; (iii) room rate; (iv) amount charged, if any, for occupancy; (v) amount of transient occupancy tax collected; and (vi) method of payment.

B. A written record of each occupancy charge for which an exemption is claimed, including the name of the person occupying the room, dates of occupancy, and reason(s) for exemption, and the written exemption claim form.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

A. .....Prior to commencing business or becoming an operator, each operator of any hotel wishing to rent occupancy to transients shall register such hotel with the Finance and Administrative Services Director.

B. .....The City shall issue a Transient Occupancy Registration Permit to an operator of a new hotel or transfer an existing Transient Occupancy Registration Permit from the prior operator of a hotel to the proposed operator of the hotel unless any of the following are found to exist:

1. The application is found to contain any false or misleading information.

2. The proposed operator has had a Transient Occupancy Registration Permit revoked by the City within the past three (3) years.

3. The hotel does not comply with the City's zoning ordinance. Issuance of the Transient Occupancy Registration Permit shall be in addition to and not in place of any and all required land use approvals. Issuance of the Transient Occupancy Registration Permit shall not be evidence that all land use approvals have been obtained and shall not stop the City to require that all necessary permits be obtained prior to any future or continued operation of the hotel.

4. The hotel has an outstanding financial obligation owing to the City including but not limited to any delinquent transient occupancy tax, business license tax, or any penalties associated with either of the above. No Transient Occupancy Registration Permit shall be transferred until all outstanding financial obligations have been satisfied.

C. .....The Transient Occupancy Registration Permit shall, among other things, state the following:

1. The name of the operator;

2. The address of the hotel;

3. The address of the operator, if different from the address of the hotel;

4. The date upon which the permit was issued;

5. The following notice: "This Transient Occupancy Registration Permit signifies that the person named on the face hereof has fulfilled the requirements of the San Clemente Municipal Code, Chapter 3.24, by registering with the Finance and Administrative Services Director for the purpose of collecting from transients the transient occupancy tax and remitting said tax to the Finance and Administrative Services Director. This permit 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 applicable laws, including but not limited to those requiring a permit from any board, commission, department or office of this City."

D. .....The operator shall at all times display the Transient Occupancy Registration Permit in a conspicuous place on the premises.

Notwithstanding anything herein to the contrary, any changes in management of the hotel, regardless of whether such change constitutes a change in the operator of the hotel which would require a new Transient Occupancy Registration Permit, must be reported, in writing, to the Finance and Administrative Services Director within seven (7) days after such change is implemented.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

A. Transfer of Hotel; Audit. .....An operator who is transferring, selling, terminating, or otherwise disposing of a hotel shall notify the Finance and Administrative Services Director, in writing, of such sale, transfer, termination, or disposition, and the name and address of the purchaser or transferee at least thirty (30) days in advance of the date of transfer, sale, termination, or disposition, unless the decision to sell, transfer, terminate, or otherwise dispose was made within less than a thirty-day period prior to the transfer, sale, termination, or disposition, in which case the operator shall immediately notify the Finance and Administrative Services Director. The operator shall, at the same time, notify in writing the purchaser or transferee of their responsibility for unpaid collected taxes as set forth in this chapter and further submit to the Finance and Administrative Services Director a written acknowledgement from the purchaser or transferee of the requirements of this chapter regarding its responsibility for unpaid collected taxes.

Prior to conclusion of the sale, transfer, termination, or disposition, the Finance and Administrative Services Director shall have the right, but not the obligation to cause an audit to be performed of the hotel's records. The Finance and Administrative Services Director shall thereafter notify the operator and the proposed purchaser or transferee (if the Finance and Administrative Services Director has a means of notifying said person) of (i) any outstanding transient occupancy tax that has been collected by the existing operator but not yet paid to the City; (ii) any transient occupancy tax which should have been collected by the operator and is owed to the City; and (iii) any reporting violations and/or any other violations of this chapter that are revealed by said audit.

B. Cessation of Business. .....Each operator upon cessation of business for any reason 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 Finance and Administrative Services Director on approved forms of the total taxable rents charged, the amount of tax collected for the reporting period, remittances made, if any, and the balance of the tax due. At the time the return is filed, the full amount of the balance of the tax due, if any, shall be remitted to the Finance and Administrative Services Director. After filing the final return and remitting the balance due, the operator shall make his or her prior records of account available for a closeout audit by the Finance and Administrative Services Director. Returns filed and taxes remitted and actually received by the Finance and Administrative Services Director 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 calendar day exists, shall be deemed timely filed and remitted. All returns filed and taxes remitted after such date shall be deemed delinquent and subject to the penalties imposed by this article.

C. Successor Liability. .....If any party acquires an interest in a hotel from an operator who is liable for any tax or penalties under this article, regardless of whether such acquisition results from the sale transfer, or other disposition, the acquiring party shall notify the Finance and Administrative Services Director of the impending date of acquisition at least thirty (30) days before the acquisition becomes complete, or, if the acquiring party discovers or decides to acquire the interest in the hotel less than thirty (30) days prior to the actual date of acquisition, the acquiring party shall immediately so notify Finance and Administrative Services Director of the impending acquisition and the date such acquisition is to be completed. When the acquisition is being accomplished through an escrow, and the acquiring party has knowledge that any tax or penalties are due to the City, the acquiring party shall notify the escrow officer of the estimated amount owed, and the terms of said escrow shall be modified to provide that a portion of the purchase price equal to the amount of the tax and/or penalty owed to the City is withheld from the operator unless, prior to the close of escrow, the operator produces either a receipt from the Finance and Administrative Services Director showing that the tax or penalty has been paid or a letter from the Finance and Administrative Services Director stating that no tax or penalty is due. If such receipt is not presented prior to the close of escrow, the funds withheld pursuant to this paragraph shall be deposited with the Finance and Administrative Services Director pending settlement of the account of the seller. In the event the acquiring party has knowledge that any tax or penalties are due to the City, and the sale, transfer, or otherwise disposition of the hotel is being accomplished through other than an escrow, the acquiring party shall withhold a portion of the purchase price that is equal to the amount of such tax or penalty. If the seller does not present a receipt or letter prior to the date of acquisition, the acquiring party, shall immediately deposit the withheld amount with the Finance and Administrative Services Director pending settlement of the account of the seller. Any monies withheld pursuant to this section shall not be released to the selling operator until the selling operator produces either a receipt from the Finance and Administrative Services Director showing that the tax or penalty has been paid or a letter from the Finance and Administrative Services Director stating that no tax or penalty is due. For the purposes of this paragraph, the "date of acquisition" shall be the date and time the transfer of the interest in the hotel becomes complete, regardless of whether such action occurred by the close of an escrow or any other method.

If the acquiring party fails to withhold a portion of the purchase price and to deposit such amount with the City, as required, the acquiring party shall be liable to the City for the payment of the amount required to be withheld pursuant to this paragraph. Within thirty (30) days after receiving a written request from the successor for a letter stating that no tax or penalty is due, the Finance and Administrative Services Director shall either issue the letter or mail notice to the successor, at that person's address as it appears on the records of the Finance and Administrative Services Director, of the estimated amount of the tax, penalty, and interest that is owed to the City. Nothing in this paragraph shall be interpreted from relieving the operator of any obligation to pay any taxes or penalties that became due prior to the acquiring party's acquisition. Accordingly, the operator and acquiring party shall be jointly and severally liable for any amounts that should have been withheld pursuant to this section.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

A. Violations of Transient Occupancy Tax Requirements. .....Any operator who fails to remit the transient occupancy tax in the time and manner required by Section 3.24.070 shall be subject to the following penalties:

1. In the event the report and/or transient occupancy tax required to be submitted pursuant to this chapter is/are not received on the date on which such report and tax are due, the operator shall pay a penalty of ten (10) percent of the amount of the tax actually due in addition to the amount of the tax itself. If the date on which a report and transient occupancy tax are due is not a business day, or is a day on which the City is closed, said penalty shall be assessed on the next business day on which the City is open.

2. In the event the report and/or transient occupancy tax required to be submitted pursuant to this chapter is/are not received within thirty (30) days after the date on which such report and transient occupancy tax are due, the operator shall pay a second delinquency penalty of ten (10) percent of the amount of the tax actually due in addition to the amount of the tax itself as well as the ten (10) percent penalty first imposed pursuant to subsection (1) of this section.

3. In the event the report and/or transient occupancy tax required to be submitted pursuant to this chapter is/are not received within forty-five (45) days after the date on which such report and transient occupancy tax are due, and in addition to the above penalties, the operator shall establish a trust account, naming the City as beneficiary, and shall thereafter deposit directly into such trust account the transient occupancy tax collected at the hotel within twenty-four (24) hours after its collection, as such collection is required under Section 3.24.020. Payment of the transient occupancy tax through trust account deposit shall continue for one (1) full year from the date on which such account is established.

4. In the event the report and/or transient occupancy tax required to be submitted pursuant to this chapter is/are not received within sixty (60) days after the date on which such report and transient occupancy tax are due, in addition to the other penalties that may be assessed in accordance with this section, the operator shall be required to enter into an agreement with the City providing for the operator's (1) repayment of all delinquent amounts, including all fines and penalties; (2) preparation and remittance of all delinquent reports; and (3) continued compliance with this chapter. All attorney fees incurred by the City to prepare such agreement and to enforce the same shall be the responsibility of the operator and shall be added to the amount owed.

5. In the event (i) the report and/or transient occupancy tax required to be submitted pursuant to this chapter is/are not received within ninety (90) days after the date on which such report and transient occupancy tax are due, and (ii) the operator has not entered into an agreement with the City, as described in subsection (4) of this section, the Transient Occupancy Registration Permit for said operator/hotel shall be suspended until such time that the City determines that the operator is in compliance with all provisions of this chapter.

6. In the event the Finance and Administrative Services Director determines that the nonpayment of any transient occupancy tax remittance due under this chapter is due to fraud, and in addition to all other penalties available under the law, the operator shall pay a penalty of twenty-five (25) percent of the amount of the tax in addition to the penalties stated in subsections (1) and (2) of this section, and shall establish a trust account, in accordance with subsection (3) of this section.

7. In the event the full amount of transient occupancy tax is not timely remitted to the City, the operator shall pay interest at the rate of one and one-half (1½) percent per month or fraction thereof on the amount of the tax, in addition to any penalties imposed pursuant to subsections (1) through (6) of this section, from the date on which the remittance first became delinquent until paid.

B. Record Keeping Violations.

1. In the event an annual (or otherwise regularly conducted) audit ("initial audit") of an operator's records reveals that the operator has not maintained the records required to be maintained pursuant to Section 3.24.080 and/or Section 3.24.090, said operator shall receive written notification regarding the record keeping violation from the City. The City shall thereafter conduct subsequent audits, with each subsequent audit occurring no less than fifteen (15) days after the previously conducted audit. Any operator found to be in violation in any such subsequent audit shall be subject to the following penalties:

a. In the event the first such subsequent audit ("second audit") reveals that the operator has not instituted a record keeping procedure to ensure compliance with the requirements of Section 3.24.080 and Section 3.24.090, the operator shall be subject to an administrative fine in an amount established by an ordinance adopted by the City Council, and shall thereafter be required to file with the City weekly reports containing the information set forth in Section 3.24.090(a) until such time as the operator has demonstrated to the City that it has an adequate record keeping procedure in place.

b. In the event the second such subsequent audit ("third audit") reveals that the operator has not instituted a record keeping procedure to ensure compliance with the requirements of Section 3.24.080 and Section 3.24.090, the operator shall be subject to a fine in an administrative amount established by an ordinance adopted by the City Council.

c. In the event the third such subsequent audit ("fourth audit") reveals that the operator has not instituted a record keeping procedure to ensure compliance with the requirements of Section 3.24.080 and Section 3.24.090, the operator shall be subject to an administrative fine in an amount established by an ordinance adopted by the City Council, and shall be required to establish a trust account, in accordance with subsection (A)(3) of this section.

d. In the event the fourth such subsequent audit ("fifth audit") reveals that the operator has not instituted a record keeping procedure to ensure compliance with the requirements of Section 3.24.080 and Section 3.24.090 and has not established a trust account, the Transient Occupancy Registration Permit for said operator/hotel shall be suspended until such time that the City determines that the operator is in compliance with the provisions of this chapter.

2. In the event an audit performed by the City requires additional time to conduct as a result of inadequate record keeping by the operator, the operator shall pay to the City all costs incurred in conducting the audit that exceed the costs that would have been incurred had the operator maintained adequate records, as required by this chapter. The operator shall pay to the City all costs incurred in conducting any subsequent audit pursuant to subsection (B)(1) of this section.

C. Other Violations. .....Any operator found to have violated any provision other than those contained within this chapter shall be subject to an administrative fine in an amount established by an ordinance adopted by the City Council. The provisions of this section notwithstanding, the Finance and Administrative Services Director shall have the right to suspend or revoke the Transient Occupancy Registration Permit for any violation of federal, or state law or local ordinance. Any person aggrieved by a decision of the Finance and Administrative Services Director may appeal the decision in accordance with the provisions of Chapter 1.20 of this code. 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.

The penalties and remedies set forth in this section are not exclusive. These remedies include, but are not limited to, the right to pursue any remedy available to it under law, including but not limited to the right to pursue civil action with remedies which include but are not limited to injunction relief and/or criminal action.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

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 Finance and Administrative Services Director within three (3) years after the date of payment.

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 Finance and Administrative Services Director that the person from whom the tax has been collected was not a transient; provided, 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, when the transient, having paid the tax to the operator, establishes to the satisfaction of the Finance and Administrative Services Director 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. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

Funds derived through the levying of the transient occupancy tax shall be expended for the promotion of the tourist business and the maintenance, improvement or acquisition of facilities which the City Council may determine are of a direct benefit to the tourist in the City.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the transient to the City. Any such tax collected by an operator which has not been paid to the City shall be deemed a debt owed by the operator to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)

No person shall fail or refuse to register as required in this chapter, or to furnish any return required to be made, or fail or refuse to furnish a supplemental return or other data required by the Finance and Administrative Services Director, or render a false or fraudulent return or claim. No person required to make, render, sign or verify any report or claim shall make 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.

(Ord. 1264 § 1(part), 2002)

(Ord. No. 1508, § 1, 7-20-2010)