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HomeMy WebLinkAboutItem 5.2 Collect Transient Occ Tax . . 3C(t)-qD CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: Septmeber 10, 1984 SUBJECT PUBLIC HEARING Ordinance Imposing a Tax Upon the Privilege of Transient Occupany and Providing for the Collection Thereof EXHIBITS ATTACHED Draft Ordinance; Letter frbm Managing Partner of Howard Johnson's dated 8/15/84 RECOMMENDATION 1) Open Public Hearing, 2) Receive Testimony 3) Close Public Hearing '4) Determine amount of tax 5) Waive reading and adopt ordinance FINANCIAL STATEMENT: Additional revenue would be generated for the City DESCRIPTION At its meeting of August 13, discussed the imposition of, a tax on transients occupying any hotel wi thin the Ci ty of Dublin. As report at that meeting, the - City of Dublin is the does not presently impose a transient occupany tax. 6~% tax based on the survey of cities shown below: 1984, ,the City Council for the privilege of indicated in the Staff only Valley City which Staff had proposed a Danville 6~% Livermore 8% Pleasanton 8% San Ramon 6~% This tax would not - affect residents, but only those individuals traveling through Dublin who use the services of a hotel. Since hotels do not typically quote taxes as part of their room rental rates, this tax should not impact a hotel's ab i 1 i ty to be compet i t i ve wi th other hotels in the area. REVENUE 100 150 200 250 6~% $118,625 177,938 237,250 296,563 8% 10% Number of Rooms $146,000 219,000 292,000 365,000 $182,500 273,750 365,000 456,250 Annual Revenue 80% Occupancy 100 150- 200 250 6~% $ 94,900 142,350 189,800 237,250 8% 10% Number of Rooms $116,800 175,200 233,600 292,000 $146,000 219,000 292,000 365,000 ITEM NO. ~.~ COPIES TO: Howard Johnson's \ . . If the City Council chooses to adopt this ordinance, it will give the City a revenue source which would not be subject to State manipulation. It will also positively impact the City's Revenue Sharing allocation, which is based on a formula that takes into consideration local tax effort. Since this ordinance is a tax ordinance, a 4/5 vote of the City .Council is required for passage. This ordinance could be negated if Proposition 36 is approved by the voters in November and the retroactivity provisions of the Proposition are held const i tu t ional. Propos it ion 36 would nega te any new taxes or increased taxes and fees adopted after August 15, 1983, unless they were approved by at least 2/3 of the voters in the community. Recommendation It is Staff's recommendation that the City Council determine the amount of tax, waive the reading, and adopt this ordinance. . . ORDINANCE NO. - 84 AN ORDINANCE OF THE CITY OF DUBLIN IMPOSING A TAX UPON THE PRIVILEGE OF TRANSIENT OCCUPANCY AND PROVIDING FOR THE COLLECTION THEREOF The City Council of the City of Dublin does ordain as follows: Section 1. Title The ordinance shall be known as the Uniform Transient Occupancy Tax Ordinance of the City of Dublin. Section 2. Definitions Except where th~ context otherwise ~equires, the definitions given ln this section govern the construction of this ordinance: (a) Person: "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. (b) Hotel: "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, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof. (c) Occupancy: "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 dwelling, lodging or sleeping purposes. (d) Transient: "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 ordinance may be considered. (e) Rent; "Rent" means the consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, wh.ether 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. (f) Operator: "Operator" means the person who is proprietor of the hotel, whether in the capacity of owner, lessee, subl~ssee, mortgagee in possession, 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 ordinance and shall have the same duties and liabilities as his principal. Compliance with the provisions of this ordinance by either the principal or the managing agent shall, however, be considered to be compliance by both. (g) Tax Administrator: "Tax Administrator" means the City Clerk of the City of Dublin or such other official as may be appointed by the City Council of the City of Dublin. Page I . . Section 3. Tax Imposed. Pursuant to the authority of Section 7280 and 7281 of the Revenue and Taxation Code, for the privil~ge of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of six and one-half percent (6 1/2%) of the rent charged by the operator. Said 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 Adrninistrator may require that such tax shall be paid directly to the Tax Administrator. Section 4. 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 herein provided; (b) Any federal or State of California officer or employee when on official busin~ss; (c) 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. Section 5. 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 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 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. Section 6. Registration. Within thirty (30) days after the effective date of this ordinance, or within thirty (30) days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register said hotel with the Tax Administrator and obtain frbmthe Tax Administrator a "Transient Occupan~y Registtation Certificate" to beat all times posted in a conspicuous place on the premises. Said 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) "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, or 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." Page 2 . . Section 7. Reporting and Remitting. 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 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 deemed necessary in order to insure collection of the tax and 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 ordinance shall be held in trust for the account of the City until payment thereof is made to the Tax Administrator. Section 8. Penalties. and Interest. (a) Original Delinquency. Any operator who fails to remit any tax imposed by this ordinance within the time required shall pay a penalty of 101 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 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed. (c) Fraud. If the Tax Administrator determines that the non-payment of any remittance due under this ordinance is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in sub-paragraphs (a) and (b) of this section. (d) Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this ordinance 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. Failure to Collect and Report Tax. Determination of Tax by Tax Administrator. If any operator shall fail or refuse to collect said tax and to make, within the time provided in this ordinance, any report and remittance of said tax or any portion thereof required by this ordinance, the Tax Administrator shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the Tax Administrator shall procure such facts and information as is possible to obtain upon which to base the assessment of any tax imposed by this ordinance 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 th~ tax, interest and penalties provided for by this ordinance. 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 the operators 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 riot less than five (5) days written notice in the Section 9. Page 3 . . manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said 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 10. Section 10. Appea 1 . Any operator aggrieved by any decision of the Tax Administrator with respect to the amount of such tax, interest and penalti~s, 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 the operators last known place of address. The findings of the 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. Section 11. Records. , It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed by this ordinance to keep and preserve, for a period of three years, all records as may be neCessary to determine the amount of such tax as the operator 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. All tax returns and information furnished by any operator pursuant to this article shall be confidential and shall not be open to public inspection nor the specific contents thereof disclosed by any officer or employee except as necessary in the performance of official duty pursuant .to this article, or in the course of any proceedings, hearing or litigation involving the existence or amount of the tax liability of such operator, or with the written consent of the operator or his authorized representative. section 12. Refunds. (a) Whatever 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 ordinance, it may be refunded as provided in sub-paragraphs (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 ~ransient 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 subparagraph (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. Page 4 . . (d) No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto. Section 13. Actions to Collect. Any tax required to be paid by any transient under the provisions of this ordinance shall be deemed a debt owed by the transient to the City. Any such tax colle~ted 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 ordinance shall be liable to an action brought in the name of the City of Dublin for the recovery of such amount. Section 14. Violations; Misdemeanor. Any person violating any of the provisions of this ordinance shall be guilty of a misdemeanor and shall be punishable therefor by a fine of not more than five hundred dollars ($500.00) or by imprisonment in jail for a period of not more than six months or by both such fine and imprisonment. Any operator or othei person who fails or refuses to registe~ as requir~d 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 claimi is guilty of a misdemeanor, and 'is punishable as aforesaid. 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 ordinance to be made, is guilty of a misdemeanor and is punishable as aforesaid. Section 15. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance or any part thereof is for any reason ~eld to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof, irrespective of the fact that anyone or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional. Section 16. Effective Date. This ordinance relates to taxes for the usual and current ~xpensesof the City of Dublin and shall take effect upon its adoption. PASSED, APPROVED AND ADOPTED this the following vote: day of , 1984 by AYES: NOES: ABSENT: Mayor ATTEST: City Clerk Page 5 ... .' -. . . RECEIVED AUG 2 0 1984 CITY OF DUBUt-1 Hotel & Spa 6680 REGIONAL STREET DUBLIN, CAliFORNIA 94568 (415) 828-7750 Augu st 15, 19 84 To the Members of the Dublin City Council: We, at the Howard JohnSon's Motor Lodge, are pleased that we can be of benefit to the City of Dublin. We wish to reiterate our feelings that a flat tax, suggested at $2.00 per occupied room, would be a fair tax on hotel guest s. An occupant of a $60 room doesn't use any more City services than one in a $45 room. New York Cit y with all it s budget pro bl ems ha s acc ept ed the $ 2 .00 t ax a s an equit abl e " way to provide City services to hotel guests in rooms ranging in price from $30 to. $300 dollars a night. To remain competitive, our Lodge must offer reduced corporate rates to high volume users. Unfortunately then, a vacationing family of 3 ends up paying more for its room than does a corporate client. On the basis ,of your proposed percentage, the family would additionally be paying. a tax higher than the corporation. We feel this is unfair. Our Howard Johnson's has been in Dublin for ten years and plans to be here for many many more. While we continue to upgrade and redecorate, we feel that we may experience difficulty competing with the new hotels soon to be built in Pleasanton. A lower City tax could give our hotel a competitive edge thus benefiting us and the City of Dublin. Sincerely Your s, ~Lc3L~- / // John son Cl ark Manag i ng Par t ner Howard Johnson's Motor Lodge