Vernon Municipal Code Ch. 3.22 Transient Occupancy Tax

For the purposes of this chapter, certain words and terms are defined and shall be construed as herein set forth unless otherwise expressly stated, or unless the context clearly indicates a different intention. Words defined herein may have different definitions in different chapters of this Code.

"Block Reservation"

means an arrangement whereby a person reserves, whether on an exclusive or non-exclusive basis, a room or block/group of rooms, for a defined period of time under a written or oral agreement with an operator, intending for such room(s) to be occupied by that person's employees or agents on an intermittent, periodic, or "as needed" basis during that defined period of time. A block reservation arrangement shall not constitute a qualifying rental agreement.

"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, hostel, bed and breakfast, time-share project rental unit, dormitory, public or private club, mobile home or house trailer at a fixed location, duplex, triplex, single-family dwelling, or other similar structure or portion thereof.

"Occupancy"

means the use or possession, or the right to use or possess, 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, time-share project owners' association licensee, or any other capacity. Where the operator performs his 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 principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall 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 Finance Director of the City, or appointed designee; provided, however, that if such official position of the City is eliminated, then "Tax Administrator" means the officer of the City with substantially similar duties and responsibilities, or appointed designee.

"Time-Share Project"

means a structure or real property (including airspace) in which either a time-share estate or a time-share use (as those terms are defined in California Business and Professions Code Section 11212) and any similar form of ownership involving a right in perpetuity, for life, or for a term of years, to occupy any room, place or area has been sold.

"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 30 consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying or entitled to occupy space in a hotel shall be deemed to be a transient until the period of 30 consecutive and uninterrupted days of occupancy has expired, unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. Any break or interruption in occupancy shall start a new 30-day period subject to the tax.

(Ord. 1294, 5/7/2024)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of 10% of the rent charged by the operator. The tax constitutes a debt owed by the transient to the City which is extinguished only by payment to the operator or to the City. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel.

(Ord. 1294, 5/7/2024)

No tax shall be imposed upon:

A. Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided.

B. Any Federal or State of California officer or employee when on official business.

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

D. The occupancy of an owner of a timeshare estate in a room or rooms in a timeshare project, or the guest of an owner.

E. The occupancy by right of an owner of a membership-camping contract in a camping site at a privately-owned campground, or the guest of an owner.

F. The occupancy of facilities operated by a local governmental entity.

G. The occupancy by a transient exempt from payment of transient occupancy tax by treaty or Federal or State law.

(Ord. 1294, 5/7/2024)

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 each 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. If an operator collects the rent but fails to collect the tax imposed by this chapter for any reason, the operator shall be required to pay the tax.

(Ord. 1294, 5/7/2042)

A. Prior to the commencement of business, every person engaging in or conducting business as an operator of a hotel renting to transients within the City shall file with the Tax Administrator an application for a transient occupancy registration permit (the "permit") for each place of business. Every application for a permit shall be made upon a form prescribed by the Tax Administrator.

B. At the time of making an application for a permit, the applicant shall pay a registration fee equal to an amount established by a resolution of the City Council.

C. The permit shall, among other things, state the following:

1. The name, address, and contact information for the operator;

2. The hotel address;

3. The date upon which the permit was issued; and

4. The following statement: "This transient occupancy registration permit signifies that the person named on the face hereof has fulfilled the requirements of the transient occupancy tax chapter 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 permit does not authorize any person to conduct any unlawful business in any unlawful manner, nor 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. This permit does not apply in lieu of such other permits which are otherwise required."

(Ord. 1294, 5/7/2024)

No hotel subject to the provisions of this chapter shall operate without a valid transient occupancy tax permit.

(Ord. 1294, 5/7/2024)

During the effective duration of the transient occupancy registration permit, the operator shall promptly update, correct or supplement the information contained in the application on file with the City when necessary to keep the information contained therein current and accurate.

(Ord. 1294, 5/7/2024)

Operators required to obtain a transient occupancy registration permit under this chapter shall not be relieved from obtaining any other permits for the privilege of carrying on any similar or related activity required under any other regulation of the City and shall remain subject to the regulatory provisions of all chapters of the municipal code.

(Ord. 1294, 5/7/2024)

Each operator shall, on or before the last day of the month following the close of each calendar quarter or of such different reporting period a return as may be established by the Tax Administrator, make a return to the Tax Administrator, on forms provided by him, of the total rents charged and received, the amount of tax collected for transient occupancies, and such other information as may be reasonably required. 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 either shorter or longer reporting periods for any individual certificate holder or category of certificate holders if he deems it necessary or desirable in order to ensure collection of the tax or to increase the efficiency of its administration. 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.

(Ord. 1294, 5/7/2024)

Original Delinquency - Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax.

Continued Delinquency - Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquent penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

Fraud - If the Tax Administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the above stated penalties.

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 1% per month for each month or portion of a month that the tax shall be delinquent on the amount of the tax, exclusive of penalties, from the date on which the tax first became delinquent until paid. The interest shall be computed on a monthly basis and shall not be subject to proration for any portion of a month.

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. 1294, 5/7/2024)

If any operator shall fail or refuse to collect the tax and to make, within the time provided in this chapter, any report and remittance of the tax or any portion thereof required by this chapter, the Tax Administrator shall proceed in such manner as may deemed best to obtain facts and information on which to base his estimate of the tax due. As soon as the Tax Administrator procures such facts and information 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, the Tax Administrator 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 last known place of address. Such operator may within 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 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 operator of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken.

(Ord. 1294, 5/7/2024)

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 Administrator by filing a notice of appeal with the City Clerk within 15 days of the serving or mailing of the determination of tax due. The City Administrator shall fix a time and place for hearing such appeal, and the City Clerk shall give notice in writing to such operator at the last known place of address. The findings of the City Administrator 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. 1294, 5/7/2024)

Each operator shall maintain its financial and accounting records in accordance with established accounting practices acceptable to the Tax Administrator. 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 operator may have been liable for the collection and payment of to the City, which records the Tax Administrator shall have the right to inspect at all reasonable times.

(Ord. 1294, 5/7/2024)

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 of Vernon for the recovery of such amount.

(Ord. 1294, 5/7/2024)

Any operator or other person who fails or refuses to furnish any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the Tax Administrator, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, and is 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.

(Ord. 1294, 5/7/2024)

A. Whenever the amount of any tax or penalty has been overpaid, paid more than once or has been erroneously or illegally collected or erroneously received by the City under this chapter, the overpayment may be refunded as provided in subsections B and C of this section, provided a claim in writing under penalty of perjury stating 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 available from the Tax Administrator.

B. An operator may claim a refund or take as a 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 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. An operator who has remitted an amount in excess of the amount required to be paid by this chapter may receive a credit to the extent of the excess. If the excess is discovered as a result of an audit by the City, no claim need be filed by the operator. Such credit, if approved by the Tax Administrator shall be applied to any deficiency found or any further tax payments due under the rules prescribed by the Tax Administrator.

E. No refund shall be paid under the provisions of this section unless the claimant establishes their right thereto by written records.

(Ord. 1294, 5/7/2024)

A. Any violation of this chapter by the holder of a transient occupancy registration permit or any business license validly issued pursuant to this or any other chapter of the municipal code shall constitute grounds for modification, suspension and/or revocation of said permit and/or license.

B. Nothing in this chapter shall preclude the City from pursuing other remedies provided by the City of Vernon Municipal Code, including, but not limited to, administrative fines or citations, denial or revocation of certificates of occupancy, issuance of stop work orders, and injunctive relief.

(Ord. 1294, 5/7/2024)