Ord 1913 - Urgency Ordinance Amending Article III of Chapter 25 of the Town Code Regarding Transient Occupancy TaxORDINANCE 1913
URGENCY ORDINANCE OF THE TOWN COUNCIL OF THE
TOWN OF LOS GATOS AMENDING ARTICLE III OF CHAPTER 25
OF THE TOWN CODE REGARDING TRANSIENT OCCUPANCY TAX
THE TOWN COUNCIL OF THE TOWN 'OF LOS GATOS DOES HEREBY ORDAIN:
SECTION I
URGENCY The Town Council hereby finds and declares that the public health,
safety, and welfare require the adoption of this ordinance as an urgency measure in order
to avoid confusion or uncertainty with respect to the Town's transient occupancy tax, the
duties and obligations of operators and their successors, and the latitude of the tax collector
in ensuring that all tax dollars are duly paid the Town. The current difficult economic
conditions and financial constraints of the hotel business require immediate clarification in
order to ensure that confusion does not result in interference with the public welfare.
SECTION II
Section 25.30.010 is amended to read as follows:
Section 25.30.010. Definitions.
For the purposes of this article, the following words and phrases shall have the
meanings respectively ascribed to them by this section:
Hotel means any structure, or any portion of any structure, which is occupied or
intended to be designed for occupancy by transients for dwelling, lodging or sleeping
purposes, and includes any hotel, inn, tourist home or house, studio hotel, bachelor hotel,
1
lodginghouse, roominghouse, apartment house, dormitory, public or private club, mobile
home 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 rooms 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. Where
the operator performs the operator's 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 article, and shall have the same duties and liabilities as the
managing agent's principal. Compliance with the provisions of this article 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 Finance Manager of the Town.
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 portion of calendar days as full days.
2
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 article may be considered.
SECTION III
Section 25.30.016 is added as follows:
Section 25.30.016. 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 Town to impose the tax herein provided;*
(b) Any officer or employee of a foreign government who is exempt by reason of
expression of federal law or international treaty.
SECTION IV
Section 25.30.030 is amended as follows:
Section 25.30.030. Returns and remitting of tax.
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
* State and federal employees are not exempt 46 Ops. Atty. Gen. 16.
3
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 it is deemed necessary in
order to ensure timely collection of the tax. The Tax Administrator may also require
further information in the return. All taxes collected by operators pursuant to this Article
shall be held in trust for the account of the Town until payment thereof is made to the Tax
Administrator. Returns and payments are due immediately upon cessation of business for
any reason.
SECTION V
Section 25.30.035 is amended as follows:
Section 25.30.035. Penalties and interest.
(a) Original delinquency. Any operator who fails to remit any tax imposed by this
article within the time required shall pay a penalty of ten (10) 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 (10) 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 article 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
4
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 required by this article
to be paid.
SECTION VI
Section 25.30.050 is added to read as follows:
Section 25.30.050. Records to be kept by operators.
It shall be the duty of every operator liable for the collection and payment to the
Town of any tax imposed by this article to keep and preserve, for a period of three (3)
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 Town, which records the Tax
Administrator shall have the right to inspect at all reasonable times. The records shall
include at least the following:
(1) Daily summaries of room occupancies;
(2) A record of each occupancy charge for which an exemption is claimed, including
the name of the individual occupying the room, dates of occupancy, and reasons for
exemption;
k,
(3) Lists of bad debts. claimed for exemption, including names and addresses of
debtor and amount of room rent unpaid.
SECTION VII
Section 25.30.060 is added to read as follows:
Section 25.30.060. Collection of tax.
(a) Actions to Collect any tax required to be paid by any transient under the
provisions of this article shall be deemed to be a debt owed by the transient to the Town.
Any such tax collected by an operator which has not been paid to the Town shall be
deemed a debt owed by the operator to the Town. Any person owing money to the Town
under the provisions of this article shall be liable to an action brought in the name of the
Town for the recovery of such amount.
(b) Recording Certificate - Lien. If any amount required to be paid to the Town
under the ordinance codified in this article is not paid when due, the Tax Administrator,
upon expiration of the second delinquency period referenced in Section 25.30.035 (b), may
within three years after the amount is due file for record in the office of the Santa Clara
county recorder and in the office of the county recorder of any other county in which the
operator owns real property, a certificate specifying the amount of tax, penalties and
interest due, the name and address as it appears on the records of the Tax Administrator
of the operator liable for the same and the fact that the Tax Administrator has complied
with all provisions of this article in the determination of the amount required to be paid.
From the time of the filing for record, the amount required to be paid together with
penalties and interest constitutes a lien upon any real property in the county owned by the
2
operator or acquired by him afterwards and before the lien expires. The 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.
(c) Priority and lien of Tax. The amounts required to be paid by any operator under
this article with penalties and interest shall be satisfied first in any of the following
cases:
(1) Whenever the person is insolvent;
(2) Whenever the person makes a voluntary assignment of his assets;
(3) Whenever the estate of the person in the hands of executors, ad-
ministrators or heirs is insufficient to pay all the debts due from the deceased; or
(4) Whenever the estate and effects of an absconding, concealed or absent
person required to pay any amount under this article levied upon by process of law.
This article does not give the Town a preference over any recorded lien which
attached prior to the date when the amounts required to be paid became a lien.
(d) Warrant for Collection of Tax. At any time within three years after any operator
is delinquent in the payment of any amount herein required to be paid off after the last
recording of a certificate of lien under subsection (b) of this section, the Tax Administrator
may issue a warrant for the enforcement of any liens and for the collection of any amount
required to be paid to the Town under this article. The warrant shall be directed to any
sheriff, marshal or constable and shall have the same effect as a writ of execution. The
warrant shall be levied and sale made pursuant to it in the same manner and with the same
effect as a levy of and a sale pursuant to a writ of execution. The Tax Administrator may
7
pay or advance to the sheriff, marshal or constable the same fees, commissions and
expenses for his services as are provided by law for similar services pursuant to a writ of
execution.
(e) Seizure and Sale. At any time within three years after any operator is delinquent
in the payment of any amount, the Tax Administrator may forthwith collect the amount in
the following manner: The Tax Administrator shall seize any property, real or personal, of
the operator and sell the property, or a sufficient part of it, at public auction to pay the
amount due together with any penalties and interest imposed for the delinquency and any
costs incurred on account of the seizure and sale. Any seizure made to collect occupancy
taxes due shall be only of property of the operator not exempt- from execution under the
provisions of the code of civil procedure.
(f) Successor's Liability
(1) Withholding by Purchaser. If any operator liable for any amount under this
chapter sells out his or her business or quits the business, the operator's successors or
assigns shall withhold sufficient of the purchase price to cover such amount until the former
owner produces a receipt from the Tax Administrator showing that it has been paid or a
certificate stating that no amount is due.
(2) Liability of Purchaser - Release. If the purchaser of a hotel fails to
withhold funds from the purchase price as required,he shall become personally liable for
the payment of the amount required to be withheld by him to the extent of the purchase
price, valued in money. Within sixty (60) days after receiving a written request from the
purchaser for a certificate, or within sixty (60) days from the date the former owner's
8
records are made available for audit, whichever period expires the later, but in any
event,not later than ninety (90) days after receiving the request, the Tax Administrator shall
either issue the certificate or mail notice to the purchaser at his address as it appears on
the records of the Tax Administrator of the amount that must be paid as a condition of
issuing the certificate. Failure of the Tax Administrator to mail the notice shall release the
purchaser from any further obligation to withhold purchase price as above provided. The
time within which the obligation of the successor may be enforced shall start to run at the
time the operator sells his business,or at the time that the determination against the
operator becomes final, whichever event occurs later.
(g) Sale of a hotel, dismissal of the operator or other termination of his rights to
operate the facility shall not relieve him from liability for taxes due or owing under this
article. Any person assuming responsibility for operation of a hotel after causing dismissal
of an operator or termination of his rights to operate the facility shall, by such action,
assume the liability for all taxes due and owing under this article. This liability is in
addition to and does not extinguish the liability of the former operator.
SECTION VIII
This ordinance takes effect immediately and shall be published once in the Los
Gatos Weekly - Times, a newspaper of general circulation, published in the Town of Los
Gatos within fifteen (15) days.
9
The foregoing ordinance was passed and adopted at a regular meeting Los Gatos
Town Council on the 21st day of September, 1992 and adopted by the following vote as
an urgency ordinance of the Town of Los Gatos.
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Brent N. Ventura
Mayor Eric D. Carlson
NAYES: None
ABSENT: Joanne Benjamin
ABSTAIN: None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
a � D
CLERK OF THE TOWN F LOS GATOS
LOS GATOS, CALIFORNIA.
N; \ATY \TOT2.AMD
10