CITY OF

HERMOSA BEACH

MUNICIPAL CODE ON-LINE

REVENUE AND FINANCE

Chapter 3.32

TRANSIENT OCCUPANCY TAX

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	3.32.010	Title for citation.
	3.32.020	Definitions.
	3.32.030	Tax imposed.
	3.32.040	Exemptions from tax.
	3.32.050	Operator's duties.
	3.32.060	Registration of hotel.
	3.32.070	Reporting and remitting.
	3.32.080	Penalties and interest.
	3.32.090	Failure to collect and report tax--Determination of tax by tax administrator.
	3.32.100	Appeal.
	3.32.110	Records.
	3.32.120	Refunds.
	3.32.125	Change of Ownership—Tax Clearance Certificate
	3.32.130	Actions to collect.
	3.32.140	Tax lien.
	3.32.150	Violations --Misdemeanor.

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3.32. 010 Title for citation.

This chapter shall be known as the uniform transient occupancy tax law of the city. (Prior code § 30-11)

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3.32. 020 Definitions.

Except where the context otherwise requires, the definitions given in this section govern the construction of this chapter:

"Hospital" means any institution for the reception and care of transient and short-term patients housed for treatment for chemical dependency on alcohol and/or drugs, incorporated as a nonprofit corporation. This definition includes any building used for such purposes.

"Hotel" means 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, mobilehome or house trailer at a fixed location, or other similar structure or portion thereof.

"Occupancy" means the use or possession, or the right to the use or possession of any room or room 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, licensee, or any other capacity. Though 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, however, 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 director of finance of the city.

"Transient" means:

1. Any person as defined in this section who exercises, for any period of time, occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement; or
2. Any individual who personally 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.

Any such person or individual so occupying space in a hotel shall be deemed to be a transient. (Prior code § 30-12)

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3.32. 030 Tax imposed.

For occupancy of any hotel or hospital as defined, each transient is subject to and shall pay a tax in the amount of ten percent of the rent or bill 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 of the hotel or hospital at the time the rent or bill is paid. If the rent or bill 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 or hospital. If for any reason the tax due is not paid to the operator of the hotel or hospital, the tax administrator may require that such tax shall be paid directly to the tax administrator. (Prior code § 30-13)

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3.32. 040 Exemptions from tax.

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.

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. (Prior code § 30-14)

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3.32. 050 Operator's duties.

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. 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. (Prior code § 30-15)

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3.32. 060 Registration of hotel.

Within thirty (30) days after the effective date of this chapter, 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 from him a transient occupancy registration certificate to be at all times posted in a conspicuous place on the premises. Said certificate shall, among other things, state the following:

A. The name of the operator;

B. The address of the hotel;

C. The date upon which the certificate was issued;

D. "This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Law 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." (Prior code § 30-16)

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3.32. 070 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 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 insure collection of the tax, and he 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. (Prior code § 30-17)

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3.32. 080 Penalties and interest.

A. Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of ten percent 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 ten percent of the amount of the tax in addition to the amount of the tax and the ten percent penalty first imposed.

C. Fraud. If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five (25) 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.

D. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this article 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. (Prior code § 30-18)

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3.32. 090 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 chapter, any report and remittance of said tax or any portion thereof required by this chapter, 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 he is able to obtain upon which to base the assessment of any tax imposed by this article and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he 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 ten 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 in the 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 3.32.100. (Prior code § 30-19)

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3.32. 100 Appeal.

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 council by filing a notice of appeal with the city manager within fifteen (15) days of the serving or mailing of the determination of the tax due. The city manager shall fix a time and place for hearing such appeal, and give notice in writing to such operator at his last known place of address. (Prior code § 30-20)

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3.32. 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 years, all records as may be necessary to determine the amount of such tax as the 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. 06-1274, §1, October 2006)

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3.32. 120 Refunds.

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, it may be refunded as provided in this section, providing a claim in writing therefore is timely filed in accordance with the requirements of section 3.08.010. (Ord.07-1284 §2, July 2007)

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 establishes his right thereto by written records showing entitlement thereto. (Prior code § 30-22)

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3.32. 125 Change of Ownership—Tax Clearance Certificate

1. Pursuant to Revenue and Taxation Code Section 7283.5, and as that section may from time to time be amended, a purchaser, transferee, or other person attempting to obtain ownership of a transient occupancy facility, may request in writing from the Tax Administrator the issuance of a tax clearance certificate stating the amount of tax and any accrued penalties and interest due and owing, if any.

2. The Tax Administrator shall, within ninety days of the receipt of the written request for a tax clearance certificate issue the tax clearance certificate, or may conduct an audit of the subject transient occupancy facility. Any such audit must be completed within ninety days after the date the records of the subject transient occupancy facility have been made available to the Tax Administrator and a tax clearance certificate issued within thirty days of the completion of the audit.

3. If following an audit the Tax Administrator determines that the current operator’s records are insufficient to assess the amount of tax due and owing, the Tax Administrator shall, within thirty days of making that determination, notify the prospective purchaser, transferee or other person that a tax clearance certificate will not be issued.

4. If the Tax Administrator does not comply with the request for a tax clearance certificate, the purchaser, transferee or other person that obtains ownership of the transient occupancy facility shall not be liable for any transient occupancy tax obligation incurred prior to the date of the purchase or transfer of the property.

5. The tax clearance certificate shall state the following:

   1. The amount of tax, interest and penalties then due and owing;
   2. The period of time for which the tax clearance certificate is valid; and
   3. That the purchaser, transferee, or other person may rely upon the tax clearance certificate as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.

6. Any purchaser, transferee, or other person who does not obtain a tax clearance certificate under this section, or who obtains a tax clearance certificate that indicates that tax is due and owing and fails to withhold, for the benefit of the county, sufficient funds in the escrow account for the purchase of the property to satisfy the transient tax liability, shall be held liable for the amount of tax due and owing.

7. The fee for issuance of a tax clearance certificate shall be established by resolution of the City Council. (Ord. 06-1274, §2, October 2006)

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3.32. 130 Actions to collect.

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. (Prior code § 30-23)

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3.32. 140 Tax lien.

A. Any delinquent transient occupancy tax, penalties for delinquency, and costs of collection shall become a lien on the service user's property upon the recording of such with the Los Angeles County recorder's office.

B. The city shall serve upon the person or persons against whom the lien is recorded, a copy of the document evidencing the lien in one of the following ways:

1. By personal delivery with proof of service.
   • a. Proof of service shall be shown by the affidavit of the person making the service, showing the time, place, and manner of service, the name and address of the person served, and any other facts necessary to show that service was made.
   • b. If there is no address for a person to be served known to the city, the city shall append to the lien an affidavit to that effect;
2. By leaving the document of the lien at the person's residence or place of business in the care of the person in charge.
   • Proof of service shall be shown by the affidavit of the person making the service, showing the time, place, and manner of service, the name and address of the person served, together with the title or capacity of the person accepting service, and any other facts necessary to show that service was made;
3. By registered or certified mail, postage prepaid, addressed to the person's residence or place of business.
   • a. This service is complete at the time of mailing.
   • b. Proof of service shall be shown by an affidavit setting forth the fact of service, the name and residence or business address of the person making this service, showing that he or she is over the age of eighteen years, the date and place of deposit in the mail, the name and address of the person served as shown on the envelope, and the fact that the envelope was sealed and deposited in the mail, with the postage thereon fully prepaid, and sent by registered or certified mail.

C. The city may add the actual cost of service to the lien to the extent that such costs do not exceed the costs of such notice provided by the county recorder's office.

D. The lien shall not be removed until the delinquent taxes, penalties for delinquency, and costs of collection are fully paid or the property is sold for payment of the delinquent taxes, penalties for delinquency, and costs of collection.

E. The tax lien shall cease to exist for all purposes after thirty years from the time the tax became a lien.

F. Property sold for delinquent taxes, penalties for delinquency, and costs of collection is subject to redemption within a redemption period of five years. (Ord. 94-1105 § 1 (part), 1994: prior code § 30-23.1)

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3.32. 150 Violations--Misdemeanor.

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 five hundred dollars ($500.00) or by imprisonment in the city jail for a period of not more than six months or by both such fine and imprisonment.

Any operator or other person who fails or refuses to register as required 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 claim, 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 article to be made, is guilty of a misdemeanor and is punishable as aforesaid. (Prior code § 30-24)

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