TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ASSISTANT CITY MANAGER/CITY CLERK
DATE: SEPTEMBER 20, 2005
SUBJECT: ADOPTION OF ORDINANCE NO. 424 - AMENDING PROVISIONS OF CHAPTER 3.16 GOVERNING THE COLLECTION OF TRANSIENT OCCUPANCY TAX AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE
Adopt Ordinance No.424, "An Ordinance of the City of Rancho Palos Verdes Amending Provisions of Chapter 3.16 Governing the Collection of Transient Occupancy Tax and Amending the Rancho Palos Verdes Municipal Code."
On September 6, 2005, the City Council introduced Ordinance No. 424 to amend Chapter 3.16 governing the collection of Transient Occupancy Tax and amending the Rancho Palos Verdes Municipal Code. The introduction of Ordinance 424 constituted the first reading of the Ordinance. If the second reading of Ordinance No. 424 is adopted by the City Council this evening, the effective date of the Ordinance will be October 21, 2005, which is thirty (30) days from the adoption date.
Assistant City Manager/City Clerk
Ordinance No. 424
ORDINANCE NO. 424
AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES AMENDING PROVISIONS OF CHAPTER 3.16 GOVERNING THE COLLECTION OF TRANSIENT OCCUPANCY TAX AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending subparagraph (H) of Section 3.16.020 of Chapter 3.16 to read as follows:
"H. ‘Transient’ means any person who exercises temporary occupancy or is entitled to temporary occupancy. Any person who exercises temporary occupancy or is entitled to temporary occupancy shall be deemed to be a transient until thirty consecutive calendar days of actual occupancy have elapsed unless there is an agreement in writing between the operator and the occupant obliging the occupant to pay market rate for the occupancy for a period of at least thirty-one (31) consecutive days. The tax administrator may develop and promulgate standard forms setting forth the minimum substance of such agreements, and may require submission of such forms with the returns required by section 3.16.070 of this chapter."
Section 2. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending Section 3.16.030 of Chapter 3.16 to read as follows:
"Section 3.16.030 Tax imposed.
A. For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten percent 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. 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.
B. In the event that an agreement exists between the hotel and any person for occupancy, as defined in this chapter, for a period in excess of thirty (30) days, and in the event that such person allows occupancy by another person for thirty (30) days or less as a subtenant, guest, licensee or permittee, the person who has made the agreement with the hotel shall be subject to and shall pay the tax required by this chapter."
Section 3. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending Section 3.16.040 of Chapter 3.16 to read as follows:
"Section 3.16.040 Exemptions.
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 provided in this chapter;
B. Any federal or state officer or employee, including an employee of a federal or state credit union, 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. Any officer or employee of an insurer when on official business for the insurer. For the purposes of this exemption, ‘insurer’ shall have the meaning set forth in Section 28 of Article 13 of the California Constitution.
No exemption shall be granted except upon a written claim therefor made at the time rent is collected upon a form complying with subsection (e) of Section 7280 of the California Revenue and Taxation Code, or any successor statute. Such form shall be signed under penalty of perjury. The tax administrator may require submission of copies of such forms with the returns required by Section 3.16.070 of this chapter."
Section 4. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending Section 3.16.070 of Chapter 3.16 to read as follows:
"Section 3.16.070 Reporting and remitting; confidentiality.
A. 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 period which may be established by the tax administrator, make a return to the tax administrator, on forms provided by the tax administrator, 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 the tax administrator deems it necessary in order to insure collection of the tax, and the tax administrator 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.
B. In accordance with Section 7056 of the California Revenue and Taxation Code, all tax returns and information furnished by any operator pursuant to this chapter are confidential and shall not disclosed for public inspection except as otherwise required by said Section 7056 or any successor statute."
Section 5. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending Section 3.16.110 of Chapter 3.16 to read as follows:
"Section 3.16.110 Records.
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, 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."
Section 6. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by amending Section 3.16.130 of Chapter 3.16 to read as follows:
"Section 3.16.130 Actions to collect.
A. 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.
B. Failure of an operator to collect tax required to be paid by any transient shall not excuse the operator’s obligation under this chapter. An operator must pay to the city any tax required to be paid by any transient, whether or not the operator collects such tax from that transient.
C. If any amount required to be paid to the city under this chapter is not paid when due, the tax administrator may, within ten years after the amount is confirmed according to the procedure set forth in Section 3.16.090 of this chapter, file for record in the office of the Los Angeles County recorder a certificate specifying the amount of tax, penalties, and interest due; the name and address, as it appears on the tax administrator’s records, of the operator liable for the tax, penalties, and interest; and the fact that the tax administrator has complied with all provisions of this chapter in the determination of the amount required to be paid. From the time of filing for record, the amount of the tax, penalties, and interest constitutes a lien upon any real property in the county owned by the operator or acquired by the operator thereafter. This lien has the force, effect, and priority of a judgment lien and shall continue for ten years from the time of filing of the certificate, unless sooner released or otherwise discharged, or unless renewed for subsequent periods in the manner prescribed by law. This chapter does not give the city a preference over any recorded lien that was attached before the date when the amounts required to be paid became a lien.
D. The amounts required to be paid by any operator under this chapter, together with all penalties and interest accrued thereon, shall be satisfied first in any of the following cases:
(1) Whenever the operator is insolvent;
(2) Whenever the operator makes a voluntary assignment of its assets;
(3) Whenever the estate of the operator in the hands of executors, administrators, heirs, or receivers is insufficient to pay all debts;
(4) Whenever the estate and effects of an absconding, concealed, or absent operator required to pay any amount under this chapter are levied upon by process of law."
Section 7. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by renumbering Section 3.16.150 of Chapter 3.16 as Section 3.16.160.
Section 8. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by adding new Section 3.16.150 to Chapter 3.16 to read as follows:
"Section 3.16.150 Reporting and remitting requirements upon transfer or cessation of business.
A. Each operator who is transferring, selling, or terminating its business shall notify the tax administrator in writing at least thirty (30) days in advance of the date of transfer, sale, or termination. If the decision to sell, transfer, or terminate the business is made fewer than thirty (30) days before the transfer, sale, or termination occurs, the operator shall notify the tax administrator immediately upon making that decision and in no event later than the date of transfer, sale, or termination. The operator shall concurrently notify any purchaser or transferee of its hotel in writing of the purchaser’s or transferee’s potential responsibility for unpaid collected taxes, if any, as set forth in this chapter and in Section 7283.5 of the California Revenue and Taxation Code, or any successor statute.
B. Upon cessation of business, whether by sale, transfer, termination, an operator 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 tax administrator on forms approved by the tax administrator of the total taxable rents charged, the amount of tax collected for the reporting period ending on the cessation date, remittances made, if any, and the balance of the tax due. The balance of tax due, if any, shall be remitted to the tax administrator at the time the final return is filed. After filing the final return and remitting the balance due, the operator shall make its records of account available for a closeout audit by the tax administrator or his or her designee. Returns filed and taxes remitted and actually received by the tax administrator on or before the same day of the next month following cessation of business, or on the last day of that month if no corresponding day exists, shall be timely filed and remitted; otherwise, the taxes are delinquent and subject to the penalties imposed by this chapter.
C. Any person purchasing an ongoing hotel business may apply to the tax administrator for a tax clearance certificate showing the tax due, if any, from the selling operator as of a date specified in the tax clearance certificate request. For purposes of this section, successive hotel businesses conducted without substantial interruption at the same hotel shall constitute an ongoing hotel business.
(1) The issuance and effect of such certificates shall be as set forth in Section 7283.5 of the California Revenue and Taxation Code, or any successor statute.
(2) Before requesting records and conducting the audit permitted by subdivision (b) of Section 7283.5 of the California Revenue and Taxation Code, or any successor statute, the tax administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base an estimate of the tax due. The tax administrator shall notify the selling operator of this estimate when requesting records for audit. If the selling operator fails to provide records in response to the request within thirty (30) days after the serving or mailing of the estimate and record request, the tax administrator may issue a tax certificate in the amount of the estimate.
(3) The city council may, by resolution, set an administrative fee for issuance of any such certificate."
Section 9. The City Council declares that, should any provision, section, paragraph, sentence, or word of this ordinance be rendered or declared invalid by any final action in a court of competent jurisdiction, or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences and words of this ordinance shall remain in full force and effect.
Section 10. This ordinance is declaratory of existing law and merely clarifies certain provisions of Chapter 3.16 of the Rancho Palos Verdes Municipal Code. This ordinance does not increase the amount of the City’s transient occupancy tax, and it does not impose the tax upon anyone who is not already subject to the tax. Accordingly, the City Council hereby finds that voter approval of this ordinance is not required.
Section 11. The City Clerk shall cause this Ordinance to be posted in three (3) public places in the City within fifteen (15) days after its passage, in accordance with the provisions of Section 36933 of the Government Code. The City Clerk shall further certify to the adoption and posting of this Ordinance, and shall cause this Ordinance and its certification, together with proof of posting, to be entered in the Book of Ordinances of the Council of this City.
Section 12. This Ordinance shall go into effect and be in full force and effect at 12:01 a.m. on the thirty-first (31st) day after its passage.
PASSED, APPROVED and ADOPTED this 20th day of September 2005.