St. Helena Municipal Code Ch. 3.28 Transient Occupancy Tax

TRANSIENT OCCUPANCY TAX

Sections:

• 3.28.010 Definitions. 3.28.020 Tax imposed. 3.28.025 Affordable and workforce housing special fund. 3.28.030 Exemptions. 3.28.040 Operator’s duties. 3.28.050 Registration of hotels. 3.28.060 Reporting and remitting. 3.28.070 Penalties and interest. 3.28.080 Failure to collect and report tax—Determination of tax by tax administrator. 3.28.090 Appeals. 3.28.100 Records required—Right to inspect. 3.28.110 Refunds.

• 3.28.120 Actions to collect.

• 3.28.130 Violations—Penalties.

As used in this chapter:

“Affordable and workforce households” shall mean a household with an annual household income of up to one hundred twenty percent (120%) of area median income, and specifically includes a “moderate income household” (up to one hundred twenty percent (120%) of area median income), a “median income household” (up to one hundred percent (100%) of area median income), a “low income household” or “lower income household” (up to eighty percent (80%) of area median income), a “very low income household” (up to fifty percent (50%) of area median income), or an “extremely low income household” (up to thirty percent (30%) of area median income).

“Affordable and workforce housing” shall mean each dwelling unit that is required to be rented or sold to an affordable and workforce household, including any of the following:

1. A dwelling unit for sale to an affordable and workforce household at an affordable sales price.

2. A dwelling unit for rent to an affordable and workforce household at an affordable rent.

“Affordable and workforce housing services and programs” shall mean the provision of financing and other services and programs provided by the city to prospective and current tenants, owners and/or developers which the city council determines assist in increasing, improving and preserving the city’s supply of rental and for sale affordable and workforce housing available to and occupied by affordable and workforce households, including, but not limited to:

1. Construction of new affordable and workforce housing;

2. Conversion of existing market rate dwelling units to affordable and workforce housing;

3. Preservation, rehabilitation, or maintenance of affordable and workforce housing; and

4. Acquisition of real property to achieve any of the purposes set forth above.

“Affordable rent” shall mean monthly rent (including an allowance for tenant paid utilities as determined on an annual basis by the city manager, or his or her designee, and all mandatory tenant paid fees for housing services) that does not exceed (1) thirty percent (30%) of one hundred ten percent (110%) of area median monthly income for moderate income households or median income households, (2) thirty percent (30%) of sixty percent (60%) of area median monthly income for low income households or lower income households, (3) thirty percent (30%) of fifty percent (50%) of area median monthly income for very low income households, and (4) thirty percent (30%) of thirty percent (30%) of area median monthly income for extremely low income households. Affordable rent shall be based on presumed occupancy levels of one person in a studio unit, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter, or such other standard that applies pursuant to federal rules applicable to project financing.

“Affordable sales price” means the maximum purchase price that will be affordable to households of the specified target income level. A maximum purchase price shall be considered affordable only if each monthly owneroccupied housing payment (including mortgage, taxes, insurance, utilities, and maintenance reserve) is equal to or less than (1) one-twelfth of thirty-five percent (35%) of the annual household income for a moderate income household or a median income household, and (2) one-twelfth of thirty percent (30%) of the annual household income level for a low income household, lower income household, very low income household, and extremely low income household. The assumptions used to set the affordable sales price, including utilities, maintenance reserve, down payment, mortgage interest rate and loan term, shall be determined on an annual basis by the city manager, or his or her designee. Affordable sales price shall be based upon presumed occupancy levels of one person in a studio unit, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter.

“Annual household income” means the combined gross income for all adult persons living in a dwelling unit as calculated for the purpose of the Section 8 program under the United States Housing Act of 1937, as amended, or its successor.

“Area median income” means the median income, adjusted for family size appropriate to the unit, applicable to Napa County, as determined annually by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations, or successor provision published pursuant to California Health and Safety Code Section 50093(c).

“Hotel” means any structure, or improved land areas or any portion thereof, which are 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, lodginghouse, roominghouse, apartment house, dormitory, public or private club, campgrounds space, recreational vehicle use space, mobilehome or house trailer at a fixed location, or other similar structure or improved land areas or portions thereof.

“Occupancy” means the use or possession, or the right to the use or possession, of any room or rooms or improved land areas, or portions thereof, in any hotel for dwelling, lodging or sleeping purposes.

“Operator” means the person who is the proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other capacity. Where the operator forms 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 in 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.

“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 (30) 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 (30) 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. 19-11 § 3; prior code § 14A.1—14A.7)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of thirteen percent (13%) of the rent charged by the operator. This 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.

The first twelve percent (12%) of the tax levied and imposed by this section shall be paid into the city’s general fund for unrestricted general revenue purposes. The next one percent of the tax levied and imposed by this section shall be accounted for and paid into the affordable and workforce housing special fund established pursuant to Section 3.28.025 and designated for the use for the provision of affordable and workforce housing services and programs. (Ord. 19-11 § 1; prior code § 14A.8)

There is hereby created the affordable and workforce housing special fund into which the taxes identified in Section 3.28.020 shall be deposited and thereafter used for the sole purpose of affordable and workforce housing services and programs.

The finance director shall file an annual report with the city council that contains the amount of such tax proceeds levied, collected and deposited into the affordable and workforce housing special fund for affordable and workforce housing services and programs, how such proceeds were expended and the status of any project required or authorized to be funded with said proceeds, all in accordance with California Government Code Section 50075.3. (Ord. 19-11 § 2)

No tax hereunder 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 herein provided;

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

No exemption shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the tax administrator. (Prior code § 14A.9)

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of the rent charged and each transient shall receive a receipt for payment from the operator. No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided. (Prior code § 14A.10)

Within thirty (30) days after the effective date of this chapter or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register the hotel with the tax administrator and obtain from him or her a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises. The certificate shall, among other things, state the following:

• A. The name of the operator;

• B. The address of the hotel;

• C. The date upon which the certificate was issued;

D. “This transient occupancy registration certificate signifies that the person named on the face hereof has fulfilled the requirements of the municipal code of the city of St. Helena pertaining to 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.” (Prior code § 14A.11)

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. (Prior code § 14A.12)

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 (10%) of the amount of the tax in addition to the amount of the tax.

B. Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) 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 remittance due under this chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of 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 delinquency penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of 1.67 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.

E. Penalties and Interest 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. (Prior code § 14A.13)

If any operator fails or refuses to collect said tax and to make, within the time provided in this chapter, any report and remittance of the 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 (10) 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 the notice why the 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 (15) days unless an appeal is taken as provided in Section 3.28.090. (Prior code § 14A.14)

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 (15) 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. (Prior code § 14A.15)

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, which records the tax administrator shall have the right to inspect at all reasonable times. If the records are deemed to be inadequate by the tax administrator or through inspection or audit, the operator shall have sixty (60) days after notice given by the tax administrator to install adequate recordkeeping procedures. If, after that time, records or recordkeeping procedures are not improved sufficiently to be audited successfully, the operator shall be liable to the city for the cost of all subsequent audits of the hotel by the city or its representatives until the records and recordkeeping are sufficient to be audited in accordance with generally accepted auditing practices. (Ord. 10-1; prior code § 14A.16)

A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subsections B and C of this section, provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within three years of the date of payment. The claim shall be on forms furnished by the tax administrator.

B. An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the tax administrator that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the transient or credited to rent subsequently payable by the transient to the operator.

C. A transient may obtain a refund of taxes overpaid or paid more than once or erroneously or illegally collected or received by the city by filing a claim in the manner provided in subsection A of this section, but only when the tax was paid by the transient directly to the tax administrator, or when the transient, having paid the tax to the operator, establishes to the satisfaction of the tax administrator that the transient has been unable to obtain a refund from the operator who collected the tax.

D. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records showing entitlement thereto. (Prior code § 14A.17)

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. (Prior code § 14A.18)

Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor.

Any operator or other person who fails or refuses to register as required herein, or to furnish any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the tax administrator, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor. 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. (Prior code § 14A.19)