This chapter shall be known as the "Transient Occupancy Tax Ordinance of the City of Healdsburg."
(Ord. 1080 § 2, 2009)
Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter.
A. "Affordable housing services and programs"
means the financing of capital improvements, services, programs and assistance provided by the City of Healdsburg to prospective and current tenants, owners and/or developers to assist in acquiring, rehabilitating, increasing, improving and preserving the City's supply of housing available to households identified by income category in HMC § 20.28.310, as the same may be amended from time to time.
B. "Agreement in writing"
means a document, signed by the operator and occupant, stating that the occupant intends to occupy the hotel for more than 30 consecutive days.
D. "Community services"
means the facilities and services provided by the City of Healdsburg community services department, including but not limited to the construction, acquisition, improvement, rehabilitation, management and operation of fields for soccer, baseball, and other sports, parks, open space, and recreational facilities, including but not limited to Recreation, Plaza, Badger, Giorgi, "the Parkland Farms," Carson Warner Memorial Skate Park, and the Villa Chanticleer; support for senior services; transit services and the operation and management of the Healdsburg Airport; civic promotion; special event coordination; distribution of information about community services; constructing, acquiring, rehabilitating, funding, planning, designing, and engineering capital improvement projects; support for community enrichment classes and recreational programs; scheduling and coordination of outdoor area usage at local schools, parks, and community facilities; provision of transit services for individuals with special needs; and administering contracts for maintenance and operation of community services and facilities.
E.
He – Him – His. Pronouns of the masculine gender are utilized for the sake of brevity and are intended to refer to persons of either gender or of the neuter gender, as applicable.
F.
Hearing Officer. The hearing officer shall be the City Manager or his or her designee.
G. "Hotel"
means any structure or any portion of any structure that is occupied or intended or designed for occupancy by transients for sleeping purposes, including any inn, 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, or other similar structure or portion thereof that is used for occupancy by transients, even if such use is on a part-time basis.
H. "Occupancy"
means the use or possession or the right to the use or possession of any room or rooms or portion thereof in any hotel for sleeping purposes in exchange for rent (as defined in this section).
I. "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 performs his functions through a managing agent or booking agency of any type or character other than an employee, the managing agent or booking agency shall also be deemed an "operator" for the purposes of this chapter and shall have the same duties and liabilities as its principal. Compliance with the provisions of this chapter by either the principal, the managing agent or booking agency shall, however, be considered to be compliance by all, and a violation of this chapter by either the principal or any agent acting on behalf of the principal shall be considered a violation by all.
J. "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 other group or combination acting as a unit.
K. "Rent"
means the actual 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, credit and property and services of any kind or nature without any deduction therefrom whatsoever.
L. "Tax administrator"
means the finance officer or his authorized agent.
M. "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 shall be deemed to be a transient until the period of 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. 1080 § 2, 2009; Ord. 1126 § 1, 2013; Ord. 1160 § 1(a), 2016; Ord. 1220 § 2, 2022)
A.
For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in an amount not less than 12 percent nor more than 14 percent of the rent charged by the hotel operator. The actual rate of tax to be paid shall be established by resolution of the Healdsburg City Council based on a determination, through the City's annual budget review process, that additional general fund revenues are needed to maintain general City services, including police and fire services, at FY 2004-2005 service levels. Such tax constitutes a debt owed by the transient to the City which can be extinguished only by payment of such tax to the hotel operator. The tax shall be due at the time the transient ceases to occupy space in the hotel and the transient shall pay the tax to the hotel operator at the time the rent is paid. If for any reason the tax due is not paid to the operator of the hotel, the tax administrator may require the tax to be paid directly to the City.
B.
If a room reservation is cancelled for any reason prior to occupancy, and the operator charges the person canceling the reservation for the use of such room in whole or in part (e.g., the person is charged for the occupancy even though he or she did not occupy or use the space), the amount charged and collected shall be deemed to be the rent upon which the tax shall be based, and the operator shall collect and pay such tax to the City.
C.
If any operator transfers the ownership, operation or management of the hotel to a third party, he shall notify the tax administrator as set forth in HMC § 3.12.140(D) and make a final return and remittance within 15 days after the date of transferring ownership, operation or management of the hotel. The purchaser shall withhold from the purchase price sufficient funds to cover any amounts owed to the City under this chapter until the former operator produces from the tax administrator either a receipt reflecting full payment or a certificate stating that no amount is due. If the purchaser fails to withhold from the purchase price as required, the purchaser shall be personally liable for the payment of the amount required to be withheld by him to the extent of the purchase price.
(Ord. 1080 § 2, 2009; Ord. 1126 § 2, 2013; Ord. 1160 § 1(b), 2016)
A.
No tax shall be imposed upon:
1.
Any person who is legally exempt from paying the tax.
2.
Any federal or state officer or employee when on official business.
3.
Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
4.
Any person who has signed an agreement in writing for occupancy in a hotel for more than 30 days, or who has actually occupied the hotel for more than 30 consecutive days.
B.
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.
(Ord. 1080 § 2, 2009)
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. The amount of tax collected by an operator shall be kept and accounted for separately from other funds kept or collected by the operator and shall not be commingled with other funds of 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, that it will not be added to the rent or that, if added, any part will be refunded except in the manner hereinafter provided. The operator shall be liable to the City for any amount of tax that he fails to collect.
(Ord. 1080 § 2, 2009)
A.
Within 30 days after the effective date of the ordinance codified in this chapter or within 30 days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register such hotel with the tax administrator and obtain from him a "transient occupancy registration certificate" to be at all times posted in a conspicuous place on the premises. Such certificate shall, among other things, state the following:
1.
The name of the operator.
2.
The address of the hotel.
3.
The date upon which the certificate was issued.
4.
The following language:
This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance 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. |
B.
Notwithstanding anything herein to the contrary, any changes in management or ownership of the hotel, regardless of whether such change constitutes a change in the operator or ownership of the hotel that would require a new transient occupancy registration certificate, must be reported, in writing, to the tax administrator within seven days after the effective date of such change. Such notice is in addition to the notice required pursuant to HMC § 3.12.140(D). Failure to so notify the City shall be a violation of this chapter, punishable as set forth in HMC § 3.12.080 and § 3.12.150(A).
(Ord. 1080 § 2, 2009)
Each operator shall, on or before the last day of the month following the close of the prior calendar month 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, 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 deems it necessary in order to ensure collection of the tax, and he may require further information in the return. Returns and payments are due within 15 days after the date of transferring ownership, operation or management of the hotel. All taxes collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment therefor is made to the tax administrator.
(Ord. 1080 § 2, 2009)
A.
Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10 percent of the amount of the tax owing 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 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10 percent of the amount of the tax in addition to the amount of the tax and the 10 percent penalty first imposed.
C.
Fraud. If the tax administrator determines that the nonpayment of any remittance due under this chapter was willful, a penalty of 50 percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (A) and (B) of this section. Any willful failure to remit to the City taxes collected pursuant to this chapter shall be deemed "tax fraud" and may be prosecuted by any agency authorized to prosecute tax fraud.
D.
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 one-half of one 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 until paid.
E.
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. 1080 § 2, 2009)
A.
If any operator fails or refuses to: (1) collect all of the tax due to the City under this chapter; (2) make, within the time provided in this chapter, any report or portion thereof; (3) keep and account for tax collected from transients separate from other funds of the operator; (4) remit such taxes or any portion thereof due to the City under this chapter; or (5) fully comply with any audit commenced pursuant to this chapter, or if the tax administrator, based on the exercise of reasonable and prudent business administration principles, is not satisfied with the tax return or returns or the amount of the tax required to be paid to the City by any operator, the tax administrator may estimate the tax due. The tax administrator may base his estimate of the tax due on prior occupancy rates of the operator's hotel during the last two fiscal years; on occupancy rates of comparable establishments in the area for the relevant time period; or on the basis of any information within his possession or that may come into his possession.
B.
After he has completed his estimate of the taxes due under this chapter, the tax administrator shall assess the tax against the operator, along with interest and penalties provided for by this chapter. When the tax administrator bases the tax assessment on an estimate computed pursuant to this section, the tax administrator shall give notice to the operator of the amount so assessed by personally serving the notice or by depositing the notice in the United States mail, postage prepaid, addressed to the operator so assessed at his or her last known address. Every notice of estimated taxes due shall be mailed within three months of completion, but not more than four years after the return was originally due.
C.
The operator may, within 15 days after service or mailing of the notice of assessment, apply in writing to the tax administrator for a hearing before the hearing officer on the amount assessed. If the operator fails to apply for a hearing 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 the operator makes a timely application for hearing, the tax administrator shall give not less than 10 days' written notice in the manner prescribed herein 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 such tax, interest and penalties. At the hearing, the operator may appear and offer evidence why the specified tax, interest and penalties should not be so fixed. Following such hearing, the hearing officer shall determine the proper tax to be remitted and shall thereafter give written notice to the operator in the manner prescribed herein of the determination and the amount of tax, interest and penalties. The amount of tax, interest and penalties determined to be due shall be payable after 15 days of the date of service or mailing of the hearing officer's decision, unless an appeal is taken as provided in HMC § 3.12.100.
(Ord. 1080 § 2, 2009)
Any operator aggrieved by any decision of the hearing officer 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 15 days of the serving or mailing of the determination of tax due. The City Clerk shall fix a time and place for hearing such appeal, and 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.
(Ord. 1080 § 2, 2009)
A.
Every operator liable for the collection and payment to the City of any tax imposed by this chapter shall keep and preserve for a period of four years all records that may be necessary to determine the amount of tax the operator is required to collect and remit to the City pursuant to this chapter.
B.
The records the operator must maintain under this section shall include, but are not limited to, the following:
1.
A written report that includes daily records of all of the following:
2.
A written record of each occupancy charge for which an exemption is claimed, including the name of the person occupying the room, date(s) of occupancy, reason(s) for the exemption, and the exemption claim form required under HMC § 3.12.040.
3.
Manually completed sequentially numbered registration cards or other similar manually generated primary documentation to verify occupancies. The manual records shall contain all of the information required in subsection (B)(1) of this section.
4.
Bank statements and tax returns relating to the operation of the hotel.
C.
The City shall have the right to inspect the records required to be maintained under this section pursuant to the audit provisions contained in HMC § 3.12.140. If an operator fails to produce records for inspection as requested, the City Council may issue an administrative subpoena, pursuant to California Government Code Section 37104.
D.
In order to facilitate an audit conducted upon the transfer of ownership, operation or management of a hotel to a third party pursuant to HMC § 3.12.140(D), the operator shall maintain possession of the original records required to be maintained under this section until the audit is complete.
(Ord. 1080 § 2, 2009)
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 established his right thereto by written records showing entitlement thereto.
(Ord. 1080 § 2, 2009)
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 subject to an action brought in the name of the City for the recovery of such amount.
(Ord. 1080 § 2, 2009)
A.
The tax administrator or any authorized agent of the City may conduct periodic audits of any hotel operating within the City to determine compliance with this chapter. In conducting an audit, the City shall provide the operator with a written request to access and inspect the records required to be maintained pursuant to this chapter, including but not limited to those specified in HMC § 3.12.110. The operator shall make all of the requested records available to the City for inspection during normal business hours within 30 days of the request, unless the City and the operator agree in writing to a longer period. Such examination shall be conducted at the hotel being audited, unless the tax administrator stipulates to another location. If an operator refuses to make such records available for inspection, the City may issue a subpoena pursuant to Section 37104, et seq., of the California Government Code or utilize any other lawful means to access and inspect such records.
B.
If the operator fails or refuses to permit the City to inspect all of the records required to be maintained pursuant to this chapter after the City has issued a subpoena for the records, the City may pursue any administrative, civil, or criminal remedy permitted by law, including the remedies set forth in HMC § 3.12.080 and § 3.12.150(A).
C.
In the event an initial audit of an operator's records reveals that the operator has not maintained the records required to be maintained pursuant to this chapter, including, but not limited to, those specified in HMC § 3.12.110, the tax administrator shall provide written notice to the operator of any violation. The tax administrator may thereafter conduct subsequent audits until it is determined that the operator has met all reporting requirements. If the operator's failure to comply with the reporting requirements creates the need for any subsequent audits, the operator shall be subject to the imposition of any penalties permitted under HMC § 3.12.080 and § 3.12.150(A). The operator shall also pay the City's reasonable costs incurred in conducting such subsequent audits.
D.
The operator shall notify the tax administrator in writing at least 90 days in advance of the operator's intent to transfer the ownership, operation or management of the hotel to a third party, so the tax administrator may conduct an audit prior to such transfer. If the operator fails to provide the required notice, both the prior operator and the new operator shall be liable to the City for all taxes, penalties and interest that the tax administrator determines are due to the City. Both the prior and new operators shall also be subject to all penalties set forth in HMC § 3.12.080 and § 3.12.150(A) for failure to comply with this section.
(Ord. 1080 § 2, 2009)
A.
Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable therefor by a fine of not more than $1,000 or by imprisonment in the county jail for a period of not more than six months or by both such fine and imprisonment. In the event any civil suit or action is brought by the City to enforce the provisions of this chapter, the person responsible for such violation shall be liable to the City for the City's costs of the suit, including, but not limited to, the City's attorneys' fees, expert fees, auditor's fees and other costs of the suit.
B.
Any operator or other person who fails or refuses to: (1) register as required in this chapter; (2) furnish any return required to be made; (3) furnish a supplemental return or other data or records required by the tax administrator; or (4) keep adequate records or open the records for inspection by the City, or who renders a false or fraudulent return or claim is guilty of a misdemeanor, which is punishable as set forth in this section.
C.
Any person required to make, render, sign or verify any report or claim who makes any false or fraudulent return or claim with the intent to defeat or evade the determination of any amount due under this chapter is guilty of a misdemeanor, which is punishable as set forth in this section.
D.
In addition to any other enforcement remedies available to the City under any applicable state or federal statute or pursuant to any other lawful power the City may possess, any violation of this chapter may be prosecuted or enforced as a code violation in accordance with Chapter 1.12 HMC as that chapter may be amended from time to time. The City may also prosecute or enforce violations of this chapter as a criminal offense or by a civil court action, prosecuted by the City attorney in the name of the City or in the name of the people of the state of California, by seeking the appointment of a receiver, or in any other manner provided by law.
(Ord. 1080 § 2, 2009)
The first 10 percent of all proceeds of the tax levied and imposed by this chapter shall be accounted for and paid into a special fund or account designated for use for the provision of community services only. The next two percent of such proceeds shall be accounted for and paid into a special fund or account designated for use for the provision of affordable housing services and programs. Any proceeds of the tax that are in excess of 12 percent of the room rate shall be paid into the City's general fund for general fund purposes. Any proceeds of the tax may be used, in addition to funding the services and programs described herein, to acquire and construct capital improvements or facilities, including payment of principal, interest and costs of indebtedness for the same. No other entity, public or private, shall have access to the proceeds of the transient occupancy tax, and no part thereof shall be expended on services provided outside the City.
As to all proceeds of the tax levied and imposed by this chapter for the provision of community services and affordable housing services and programs, and collected by the City, the finance director shall file an annual report with the City Council that contains the amount of such proceeds, how such proceeds were expended and the status of any project required or authorized to be funded with revenue raised by such proceeds, all in accordance with California Government Code Section 50075.3.
(Ord. 1126 § 3, 2013; Ord. 1160 § 1(c), 2016; Ord. 1220 § 2, 2022)