Ord 2255 - Amending portions of Article III of Chapter 25 of the Town Code to increase the TOTORDINANCE 2255
AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
AMENDING PORTIONS OF ARTICLE III OF CHAPTER 25 OF THE TOWN OF LOS
GATOS TOWN CODE TO INCREASE THE TOWN'S TRANSIENT OCCUPANCY TAX
RATE FROM 10 PERCENT TO 12 PERCENT, ADDRESS ONLINE TRAVEL
COMPANIES AND OTHER THIRD PARTY BOOKINGS, AND MAKE OTHER
CONFORMING CHANGES SUBJECT TO APPROVAL OF A MAJORITY OF THE
ELECTORS VOTING ON THE TAX MEASURE AT THE GENERAL MUNICIPAL
ELECTION TO BE HELD ON TUESDAY, NOVEMBER 8, 2016
WHEREAS, pursuant to California Revenue and Taxation Code §§ 7280 et seq., the
Town of Los Gatos ( "Town ") has the authority to levy a transient occupancy tax ( "TOT ") upon
the privilege of occupying a hotel, as defined in the Section 25.30.010 of the Los Gatos Town
Code, for a period of 30 days or less; and
WHEREAS, the TOT is a general tax the proceeds of which are deposited into the
Town's General Fund. The General Fund pays for essential Town services such as police
protection, street operations and maintenance, library services, parks services and general
municipal services to the public; and
WHEREAS, the Town further desires to amend the Los Gatos Town Code to allow for
the imposition and collection of the TOT on the full retail rent charged to a guest for hotel
occupancy, whether the occupancy is booked directly by the guest, through the guest's employer
or agent, or through online travel companies that enable guests to purchase occupancy via the
Internet, or by similar electronic means;
WHEREAS, the Town wishes to increase its TOT from the existing 10 percent to 12
percent, subject to voter approval, for general purposes;
WHEREAS, the proposed TOT increase to 12% and other proposed TOT amendments
will be submitted to the voters at the General Municipal Election on November 8, 2016.
NOW, THEREFORE, THE PEOPLE OF THE TOWN OF LOS GATOS AND THE
TOWN COUNCIL DO HEREBY ORDAIN AS FOLLOWS:
SECTION I
Los Gatos Town Code Chapter 25 Article III — Transient Occupancy Tax is hereby
amended to read as follows:
Sec. 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:
1of4
Ordinance 2255 August 2, 2016
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, 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 or booking agent of any type or character other than an employee,
including but not limited to an online travel company the managingLbookin 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/bookin¢ agent
shall, however, be considered to be compliance by both.
Online Travel Company means any person, whether operating for profit or
not for profit, which enables transients to purchase occupancy of space in a hotel
via the Internet, or by similar electronic means.
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 total consideration charged, to the transient, (including but
not limited to, room rates, service charges, retail markup, commissions,
processing fees, cancellation charges, attrition fees or online booking fees),
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 Director 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. 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
2of4
Ordinance 2255 August 2, 2016
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.
Sec. 25.30.015. - Tax imposed; when payable.
(a) For the privilege of occupancy in any hotel, each transient is subject to and
shall pay a tax in the amount of tea twelve (4-0 12) percent of the rent charged by
the operator. Such tax constitutes a debt owed by the transient to the Town, which
is extinguished only by payment to the operator or to the Town. 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.
SECTION II
The Town Council finds and determines that the adoption of this ordinance is exempt
from the requirements of the California Environmental Quality Act (CEQA) per CEQA
Guidelines under the General Rule (Section 15061(b)(3)), which sets forth that the CEQA
applies only to projects which have the potential for causing a significant effect on the
environment. It can be seen with certainty that the proposed Town Code text amendments will
have no significant negative effect on the environment.
SECTION III
If any provision of this ordinance or the application thereof to any person or
circumstances is held to be invalid, such invalidity shall not affect other provisions or
applications of the ordinance which can be given effect without the invalid provision or
application, and to this end the provisions of this ordinance are severable. The Town Council
hereby declares that it would have adopted this ordinance irrespective of the invalidity of any
particular portion thereof and intends that the invalid portions should be severed and the balance
of the ordinance be enforced.
SECTION IV
Except as expressly modified in this Ordinance, all other sections set forth in the Los
Gatos Town Code shall remain unchanged and shall be in full force and effect.
3of4
Ordinance 2255 August 2, 2016
SECTION V
This ordinance relates to the levying and collecting of the Town transient occupancy tax
( "TOT ") and shall take effect only if approved by a majority of the voters voting on the measure
at the November 8, 2016 General Municipal Election and shall become effective ten (10) days
after the City Council declares and certifies by resolution the results of the election and that the
measure was approved by a majority of the voters voting thereon. This Ordinance shall take
effect thirty (30) days after its adoption.
SECTION VI
This Ordinance was passed and adopted by at least two- thirds vote by the Town Council
of the Town of Los Gatos at a regular Town Council meeting held on the 2nd day of August
2016.
COUNCIL MEMBERS:
AYES: Marcia Jensen, Steve Leonardis, Rob Rennie, Marico Sayoc, Mayor Barbara Spector
NAYS:
ABSENT:
ABSTAIN:
MAYOR OF THE70" OF LOS GATOS
LOS GATOSXALIFORNIA
TE:
ATTEST:
CLERK ADMINIST ORR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE:
4of4
Ordinance 2255 August 2, 2016