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Home My WebLink AboutORD 3704' • ORDINANCE NO. 3704 -~~=:----=-::'::::' ORDINANCE OF THE COUNCIL OF THE CITY OF. PALO ALTO AMENDING CHAPTER 2 ~ 33 . OF TITLE 2 OF THE PALO ALTO MUNICIPAL COOE RELATING TO THE TRANSIEki' OCCUPANCY TAX The Council Of the City of Palo Alto does ordain as follows: Section 1. Ch '"pter 2. 33 of the Palo Alto Municipal Code is hereby amended to read as follows: Sections: 2.33.010 2~33.020 2.3:L030 2.33.040 2.33.050 2 .. 33.060 2.33.070 2.33.080 2.33.090 2.33.100 2.33.110 2.33.120 2.33.130 Chapter 2.33 TRANSIENT OCCUPANCY TAX Definitions. Tax imposed. Exemptions. Operator's duties. Registration. Reporting and remitting. Penalties. Failure to collect and report tax; determination of tax. Appea 1. Records. Refunds; credits. Actions to collect. Violations; misdemeanor. 2.33.0!0 1 Definitions. 2xccpt where the context otherwise requires, the definitions given in this section govern the construction of this chapter: (a) PERSON. •Person • means any individual, firm, par:- nership, 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. (b) HOTEL. "Hotel• means any .structure, ·or, _any portfon ... of any structure, which is occupied or intended 6r designed for occupancy by transients for dwelling, lodging or sleep~ng p~rposes, and includes any hotel, inn, tourist home or house, mqtel, studio hotel, bach~lol:' hotel, lodginghouse, rooming-. house, ~partment house, dOrmitory, public or private ClUb, mobilehome or hous·e ~railer at a f:i.xed location,_ or other similar structut:.~ or· pqrtion thereof~ ( c} OCCUPANCY. "Occupancy" meaos the use or posses sion, or the right to the use or possession, of any room or rooms· or portion· thereof in any hotel for dwelling, lodging or sleeping purposes~ 1. ----------------------·~ -- • (d) TRANSIENT. ~Transient• means any person who exer cises occupancy or is entitled to occupancy by reason of con cession, permit, right of access, license or other agreemerit for a period of thirty consecutive 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 agre~ment in writin·(~ between the operator and the occupant providing for a longer period of occupancy. (e) RENT. • Rent~ means the consideration charged, whether or not received, for the occupancy of space in , a hotel valued in money, whether to be rec~ived in money, goods, l~bor or otherwise, including all receipts, cash, CL'edits and property and services of any kind or nature, without any deduction therefrom whatsoever. (f) OPERATOR. "Operatoru means the person who is pro prietor of the hotel, whether in the capacity of owner, les see, sublessee, mortgagee in possession, 1 icensee, or any other capacity. Where the operator performs his or her functions through a managing agent of any type or character other-than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both. 2.33.020 Tax i•posed. For the privilege of occupancy in any hotel each transient is subject to and shall pay a tax in the amount of ten percent (lO%) of the rent charged by the operator. Said tax constitutes a debt owed by the transient .t.o the City!' which is extinguished only by payment to the operator or to the City. The ~tran~ient 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 made with each installment~ Any unpaid tax shall be due upon the transient's ceasirtg occupancy in th~ · hotel. If for any .reason the t·~,·~ !=}ue is not paid to the operator of the hotel, the Superv';':' --c of· Revenue Collecti.ons •ay riquire that such tax shall.· be paid directly to the Supervisor of Revenue Collections. 2.33.030 Bxeaptiona. No tax shall be imposed upon: {a) Any person as to ~hom, or any occupancy as to which, it is b~yond the. power of the City to -impose the tax herein provided7 , (b) Any officer· or. ~mployee of a foreign govern m·1rit who is e"<empt by reason o'f express -provision· of federai law , -international treaty; · 2 •. ,' ''I'; '. ; .. ·. (c) Any, federal or State of C,~lifornia officer or employee on official business who shall pay re~t by warrant or check drawn on the treasucy of the United States or i:.he State of California or provides written ~,,;ti~n.-:-~ of such ofticial ousiness on a form approved in advance by the Supervisor of Revenue Collections. Copies of thE! dOcumenta tiort for each exemption claimed must be submitted to the Supervisor of Revenue Collections with each return made pur suant to Section 2.33.060. No exemption shall be granted under this Section except upon a claim therefor made at the time rent is collected and under penalty of ~erjury upon a form prescribed by the Supervisor of Revenue Collections. ,o\.dditionally, a copy ..:>f such warrant or check and a copy of such claim form shall be submit ted ioii th each t'etuz:-n made pur::-suant to Sect ion 2.33.060. 2.33.040 Operator's duties. Each operator shall collect the tax imposed by this ordinance to the same extent and at the same time as the rent is collect0d from every transient. The amount of tax shall be separately stated from the amount of tn~ rent char~ed, and each transient shall receive a ~( ce ipt for payrnen t from the opera tor. No qpera tor of a hotel shall advertise or state in any manner, whether dir:ectly or indirectly, that the tax or any pact thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, OL' that, 1f added, any part will be refunded except in the manner hereinafter provided. 2. 33.050 Registration~ Within ten ( 10) days after commencing ousi ness, each new or unregi.stered opera tor of any hotel renting occupancy to transients shall present a valid certificate of occupancy issued by the Build~ng Official pur suant to Title 16 and apply for registration of said hotel with the Supervisor of Revenue Collection~ ~ho will issue a •Transient Occupancy Registration Certificate~ to be at· all times posted in a conspicuous place on the premises by such registrant or any operator previously registered~ The appli~ cation shall. require· such information as the Supervisor of Revenue Collections deems necessary or convenient to ~he col lection of the tax imposed by this chapter.· The Supervisor of Revenue Collections may require updating of application information from time to time as he or she deems necessary or advisable. Registration under this section shall lapse \.with the certificate of occupancy upon which it was issued. Said certificate shall, among other things; stat~ the folio~ing: sued: (l) Tht: name of the operator; (2) the address of the hotel~ ( 3) the date upon which the certificate was·· is- 3. l'p ·.I. • ' .. ,I·',., . J' . . ·.· I '. ( 4) •This Tr-ansient Occupancy Registca tion Ce rti ficate signifies that the person naaed on the face hereof has fulfilled the requice•ents of Chapter 2.33 of the Palo Alto Municipal Code 'Transient Occupancy Tax' by registering with the Supervisor of Revenue Collections for the purpose of col lercting fro• transients the Transient Occupancy Tax and re aitting said tax to the Supervisor of Revenue Collections. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an un lawful Manner, or to o~rate a hotel without strictly co~aply ing with all local applicable laws, incl~ding but not li~ited to those requiring a pec~it froM any boa~d, commission, depart~ent or off1ce of this Citt• This certificate does not constitute a permit and is not transferable to a different opet:'ator."' 2.33.060 Reportiag and ReaittiDge Each operator shall, on oc before the last day of the month following the close of the pcevious calendar ~onth, or at the close of any reporting period which rna)-be established by the Supervisor of Revenue Collections, ~aake a return to the Supervisor of Revenue Collections on forGs provided by him oc her of the total rents charged and received and the a~ount of tax col lected for transient occupancies. If no tax was due or col lected ducing the previous reporting period, the operator shall file a retucn so stating under penalty of perjury. At the tiMe the return is filed, the full amount of the tax col lected shall be remitted to the Supervisor of Revenue Collec tjo;-!':3. The Supet·visor of Revenue Collections aay establish shorter reporting periods for any certificate holder if he or she deems it necessary in order to ensure collection ot the tax, and he or she .ay require further information in the re turn. Returns and payaents are due huaedia tely upon cessa tion of business for ariy reason. All taxes collecte~ by operatots pu.rsuant to tllis chapter shall be held in trust for the account of the Cit;/. until pa)'llent thereof is 11ade to the Supervisor of Revenue Collections. l.lJ.I71 P ... ltiea. (a) ORIGINAL DELINQUENCX.; Any operator who fails to J:e•it any tax i•posed by this chapter within the tiae requir:-ed shall pay a penalty of ten percent (10\) of the asount of the tax which penalty a•ount shall be added to the aaount of the tax. for purposes of calculating additional penalties. (b) CONTINOBO DELIHQUENC:i. A.!'lY operator who fails to re•it any delinquent re•ittance on or before a period of thirty (30) days following the date on which the reaittance first beca•e delinquent shall pay a se.cond delinquency penal ty of ten percent (10\) of the aaount of the tax including the ten percent (10\) penalty first i•posed. 4. j ~ i' i' ·,' '; ; -. ~ i : ,:;, :: ·.,',\ . . ..,, • (c) FRAUD OR MISREPRESENTATION. If th~ Director of Finance, in his or her judg•ent, deter•ines that the non pay.ent of any reeittanee due under this chapter is due to intentional conduct, •isrepresentation oc fraud, a penalty of twenty-five percent ( 25\) of the aaount of the tax shall be added thereto in addition to the penalties stated in subsec tions (a} and (b) of this section. (d) ADDITIONAL P&NAL1't. In addition .t:'7· the penal- ties i•posed under sub$ections (a) and {b), a~y oper~tor who fails .to r--eili t any tax i•posed t)y this chapter shall. pay a penalty of one percent ( 1\) per <11onth or ft'actioo .·t:hereof, whichever is less, on the am~unt of the tax fro~ the date on which the remittance first beca~e d~linquent until paid~ \e) PENALTI !!:S MERGED WITH fAX. t;ve'Cy penalty im- pos~d and such additional penalties as accrue under the provil3ions of this sect.ion shall become a part of the tax herein required to be paid. 2.33.080 Failure to collect and report t&Sf deteraina tion of tax by Supervisor of le't'eDH Collections. If any operator fails or refuses to collect $aid tax and to make, within the ti~e provided in this chapter, any report and re ~ittance of said tax or any portion thereof required by this chapter, '!:he Supervisor of Revenue Collections shall proceed in such manner as he or she may dee~ best to obtain facts and infor~ation on which to base his or her estimate of the tax due. As soon as the Supervisor of Revenue Collections shall procure such facts and infor•ation as he or she is able to obtain upon which to base the assessaent of any tax i~posed by this chapter and payable by any opecator who h~s f~lled or refused to collect the sa•e and to •ake such report and re mi ttancf>!, he Qr shl9 shall proceed to deterMine and assess against s.uch operator Ute tax and penalties pcovided by this chapter.. In case such deter•ination is ude, the Supervisor of Rev~nue Collections shall give a notice of the aaount so assessed by serving it personally or by depo,:dting it. in. the United· States Mail, postage prepaid, addresr·:f.i to the opera tor so ass'$s~ed at ·his or hec last known place of address. Such operator 11ay within fourteen (14) days after serving or 11ailing · of such notice r..ake application ·in writing to the Supervisor of Revenue Collections for a hearing on the amount assessed. If application by an operator is not made within the t:itne prea;cribed, the tax and penalties, if any, deter mined by the Supervisor of Revenue Collections . to b~ due shall becosae final and conclusive and i-ediately due· and payable. lf such appli,cation ·is ~aade, the Supervisor·· of Revenue Co.l],.ections shall give not less than ten. { 10) days written notice in the 11anner prescribed herein to the opera tor to .. show cause at a tiae and pla.ce fixed in said notice 5. . I ... :·.1 .... ' -.. . . ' • • why said al'llount specified therein should not be fixed for such tax: and penalties. At such hearin~, th.e operator may appear and offer evidence 'illhy such specified tax and penal-_ ties should not be so fixed. After such hearing, the Super visor of Revenue Collecti()ns shall detec~ine the proper tax to be remitted and shall thec-eafter give vritten notice t.Q the person in the aanner prescribed herein of such deteraina tion and the amount of such tax and penalties. The amount deter~;inod to be due shall be payable after twenty (20) days of the Becving or mailing of such detecAiirta t ion unless an appeal i3 taken as provided in Section 2.33.090~ 2. 33.090 Appeal. Any operator: aggrieved by ar.y dec i sion of the Superviso~ of Revenue Collections ~ith respect to the amount of such tax and penalties, if any, •ay appeal to the Director of Finance or his or her designee by f!.J.ing a Notice of Appeal with the City ClerK ~ithin twenty (20) days of the se~ving or mailing of the detet·:nination of the tax due.. The Director of Finance or the designee shall filt a tim.~ 1nd place for: hearing such ap;>eal, and give notice in writing to such operator at his or her last known place of address. The findings of the Director of Finance or the designee shall be final and conclusive and shall be served upou the appellant in the manner p~escribed above for service of notice of hearing. Any amount found to be aue shall be immediately due and payable upon the service of notice. 2.33.100 Recorda. It shall be the duty of every oper ator liable for the collection and payaent to the City of any tax imposed by this chapter to keep and presarve all reco~ds as may be necessary to determine the a11ount of such tax as he ox:-. she .may have been liable foe the collection of and pafilent to the City. Said recocds shall be kept or •ade available at lltie location w-ithin the liaits of the City of Palo Alto for a period .. of three years. Supervisor of Revenue Collections and/oJ: City Auditor or their designee shall have the right at any and all ·reasonable ti~tes, to. exa•ine and audit said records for the purpose of detereining the accuracy thereof • .. 2 .. 33.110 :lef1UICiaJ credit•• (a) CLA.IK REQUIRED.. When- ~ver the a11ount of any tax or penalty has been overpaid or ,paid taore tl~an once or has been erroneously or illegally collected or received by the City under this chapter, it •ay be. refunded or credited·. as provided in subsections {bl and (c) of ·~his section .provided a cla_ia in .writing therefor, stating under penalty, of per jur~·-the specific grounds upon which the clai11 is tounded, is fil.ed with the Sul(IE!rvisor of R$venue Collections within ~ighteen Months of the date of payment. The clai• shall b' on forss furnished by the Super visor of Revenue Collections. 6. . ~ . ' . .~ '.' . ' . . • . . • • • (b) OPERATORS. An operator •ay clai• a refund of the amount overpaid by submitting a request for a ~afund or credit on forms approved by the Superv\~or of Revenue Collec tions. An operator may claim as an ovarpayeent any tax previ ously paid which was calculated on the basis of taxable con.sider.ation written off by the operator as a bad debt in accordance with generally accepted accounting principles and claimed as a deduction on a federal inco•e tax return in accordance with provisions of the Internal Revenue Code, and Regulations issued pursuant thereto. The bad debt clai~ ~ay be taken as an adjustment to future taxes due the City after the operator 1 s procedure and for~s for adjustment of bad debt have been reviewed and approved by the Supe~visor of Revenue Collections. (c) TRANSIENTS. A transient may request a cefund of taxes foe overpayment by filing a claim in the manner pro vided in subsection (a) of this section, but only ~then the transient, having paid the tax tn the operator, establishes to the satisfaction of the Supervisor of Revenue Collections that the transient has been unable to obtain a refund fro• the operator who collected the tax. (d) BURDEN ON CLAIMANT. No refund shall be paid nor any credit allowed under this section unless the clai•ant establishes to the satisfaction of the Supervisor of Revenue Collections his or her right thereto by written records show ing entitlem-ent. 2. 33.120 Actioaa to collect. Any ta~ 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 ~sn operator which has not been paid to the City shall be d~e11ed a debt. <>wed by the operator to the City. Any per.s()n ow~ng aoney to the City under the pro visions of this chapter shall be liable to an action brought in the name of the City of Palo Alto for the recovery of such amount. 2. 33.130 Violatioa•r •iacl-aor. Any operatoc or other person who violates any of the provisions of this chapter or who fails or refuses to register as required herein, or to furnish any returns or other data required hy the Supervisor of Revenue Collections, or who renders a false or fraudulent return or clai•, is guilty of a &RisdeJteanor, and is punishable as. provided .. in this cooe.. Section 12. The provisions. of this ordinance are aerely declaratory of-existing la.w;-/and nothing herein contained shall be deemed ·to itnpose or increase any tax currently i•posed by ordi nance of the City. Section 13. The Council finds that this project will have no significant environmental impact. 7. . . ~' . . '" ' . ' , • • Section 14.. This ordinance shall become effective upon the commencement of the thirty-first da.y after the day of its pas sage. INTRODUCED:" August 4, 1986 ~ASSED: August 25, 1986 AYES: Bechtel, Fletcher, Kleir., Levy, Patitucci, Renzel, Sutorius, Woolley NOBS: None ABSTENTIONS: None ABSENT: Cobb APPRO AS TO FORM: s 1oy Assistant City Attorney 8. ""' '':