This Chapter shall be known as the Transient Occupancy Tax Ordinance of the City of Milpitas and is enacted pursuant to the provisions of Sections 7280 and 7281 of the Revenue and Taxation Code. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

Except where the context otherwise requires, the definitions given in this section govern the construct-ion of this Chapter.

"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, dormitory, public or private club, a mobilehome as defined in Health and Safety Code section 18008 located outside a mobilehome park or other similar structure or portion thereof at a fixed location in the City of Milpitas.

"Hotel" shall not include a timeshare estate as defined by Business and Professions Code section 11003.5, a membership camping contract as defined by Civil Code section 1812.300, or a mobilehome located within a mobilehome park, as defined in Section XI-10-2.58-3 of the Municipal Code. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

"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. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

"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.

For a person to avoid being deemed a transient during a thirty (30) consecutive day period, the person exercising occupancy rights in a hotel must, prior to occupancy, enter into a written and legally binding agreement with the hotel operator. The written agreement shall obligate the person to pay market rate for occupancy for a period of at least thirty-one (31) consecutive days. Said agreement shall transfer exclusive legal possession of the premises, or a portion thereof, to the person. If the written agreement requirements are satisfied, the person exercising said occupancy rights shall not be considered a transient under this article and, therefore, shall not be subject to the tax imposed pursuant to Sec. III-13-3.00 of this Chapter. In absence of said written agreement prior to the commencement of occupancy, the person shall be deemed a transient and subject to the transient occupancy tax until the qualifying period (30

consecutive days) for non-transient status has been satisfied. On the thirty-first consecutive day, and on each consecutive day thereafter, the transient occupancy tax shall not apply. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this Chapter may be considered. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

"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. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

"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 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. If the operator is not the owner in whole, or in part, of the property upon which the hotel is situated, the owner of the property shall also have the same duties and liabilities as the operator or managing agent of the hotel. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

"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. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

For the privilege of occupancy in any hotel, each transient is subject to and shall pay a tax in the amount of ten percent (10%) 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 a hotel. If, for any reason, the tax due is not paid to the operator of the hotel, the License Tax Collector may require that such tax shall be paid directly to the city. (Ord. 218.2 (part), 200111/20/01; Ord. 218, (part), 6/21/83)

No tax shall be imposed upon:

III-13-4.01 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;

III-13-4.02 Any federal or State of California officer or employee when on official business who shall pay rent by warrant or check drawn on the Treasury of the United States or the state of California or with a government issued credit card or who provides written evidence of such official business on a form approved in advance by the License Tax Collector. Copies of the documentation for each exemption claimed must be submitted with each transient occupancy tax return made pursuant to Section III-13-7.01. The operator shall retain the original documentation for each exemption claimed for the time period specified in Section III-13-l 1.00.

III-13-4.03 Any officer or employee of a foreign government who is exempt by reason or express provision of federal law or international treaty.

III-13-4.04 No exemption shall be granted except upon a claim therefore made at the time rent is collected and under penalty of perjury upon a form

prescribed by the License Tax Collector. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

(a) 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.

(b) 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.

(c) 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, it will be refunded.

(d) All tax collected by the operator under this Chapter shall be held in trust for the account of the City until payment of the tax is made by the operator to the License Tax Collector.

(e) Failure of the operator to collect the tax due from the transient shall not excuse the operator from its obligation to pay the tax due to the City. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

Within thirty (30) days after the effective date of this Chapter, or within thirty (30) days after commencing business, whichever is later, each operator or any hotel renting occupancy to transients shall register said hotel with the License Tax Collector 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:

(1) The name of the operator;

(2) The address of the hotel;

(3) The date upon which the certificate was issued. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

(a) Each operator shall, on or before the last day of the month following the close of each calendar month, or a more frequent accounting period if approved by the License Tax Collector, or at the close of any shorter reporting period which may be established by the License Tax Collector, make a return to the City, on forms provided, of the total rents charged and received and the amount of tax collected for transient occupancies.

(b) At the time the return is filed, the full amount of tax collected along with a summary report of exemptions claimed shall be remitted to the City. Copies of the exemption claimed for government employees pursuant to Section III-13-4.00 shall be included with the summary report.

(c) The License Tax Collector 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.

(d) Returns and payments are due immediately upon cessation of business for any reason. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

(a) Any operator liable for any tax under this Chapter who sells or otherwise disposes of a hotel, and the operator's successor, shall notify the License Tax Collector of the date of sale at least thirty days prior to the date of the sale or, immediately if the agreement to sell or otherwise dispose of the hotel was made less than thirty days prior to the date of the sale. The successor shall withhold from the operator for the account of the City of Milpitas, a portion of the purchase price sufficient to pay the amount of the tax owed to the City until the operator secures a written "Transient Occupancy Tax Clearance Certificate" from the License Tax Collector stating that no tax is due from the operator through the date of the

sale. If no Transient Occupancy Tax Clearance Certificate is presented by the operator to the successor within thirty days after the successor commences operation of the hotel, the successor shall immediately deposit with the License Tax Collector the amount withheld from the purchase price. The License Tax Collector shall apply said funds to the amount of tax owed to the City by the prior operator.

(b) If the successor fails to withhold the amount required by this Chapter, the successor is liable to the City of Milpitas for payment of the tax owed by the prior operator.

(c) The License Tax Collector shall, within thirty days of receipt of a written request for a Transient Occupancy Tax Clearance Certificate, either issue the Certificate or give written notice to the operator, with a copy to the successor, of the amount of tax which must be paid to secure issuance of the Transient Occupancy Tax Clearance Certificate. The Transient Occupancy Tax Clearance Certificate shall be a defense, available solely to the successor and not the operator, to any claim the City may assert against the successor for taxes owed by the prior operator. (Ord. 218.2 (part), 11/20/01; Ord. 218.1 (part), 1/23/96; Ord. 218, (part), 6/21/83)

Any operator who fails to remit any tax imposed by this Chapter within the time required shall pay a penalty of 25% of the amount of the tax in addition to the amount of the tax. In the event of continued delinquency (defined as failure to remit any delinquent remittance on or before thirty (30) days following the date on which the remittance first became delinquent), an additional 25% penalty of the amount of the tax shall be assessed. Assessment of this penalty shall not prevent the City from pursuing criminal or civil actions against the operator to the extent allowed by law. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

In addition to the penalties imposed, any operator who fails to remit any tax imposed by this Chapter shall pay interest at the rate of 1% 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. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

If the License Tax Collector determines that the nonpayment of any remittance due under this Chapter is due to a fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subparagraph 8.01 of this section. This section shall not be deemed to limit or offset the amount of punitive damages the City may recover from an operator pursuant to the Civil Code section 3294. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

Every penalty imposed and such interest as accrued under the provisions of this section shall become a part of the tax herein required to be paid and shall accrue interest as specified in Section III-13-8.02. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

The City may audit those records kept by the operator as required by Section III-13-11.00 at any time upon reasonable notice to the operator. If the audit reveals an underpayment of taxes in excess of ten percent (10%) of the total amount owed to the City for any consecutive three (3) month period during the audit period, the operator shall pay the City actual costs to perform the audit up to $2,500. This obligation shall be in addition to any penalty or interest imposed on the operator by this Chapter. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

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 License Tax Collector 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 License Tax Collector shall procure such facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this Chapter 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 License Tax Collector 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 (10) business days after the serving or mailing of such notice make application in writing to the License Tax Collector 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 License Tax Collector shall become final and conclusive and immediately due and payable. If such application is made, the License Tax Collector shall give not less than five (5) business 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 License Tax Collector 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 described to be due shall be payable after ten (10) business days unless an appeal is taken as provided in Section III-13-10.00. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

Any person subject to and aggrieved by a decision of the License Tax Collector with respect to the amount of such tax, interest and penalties, if any, may appeal to the City Manager within ten (10) business days of the date of the decision. Any additional written material that the person wishes to have considered by the City Manager shall be submitted at the time of the request for appeal is filed. The City Manager shall schedule a hearing date, designate a hearing officer, and shall provide the appellant with written notice of the hearing date. The hearing shall be conducted in accordance with Section V-500-3.05 of the Municipal Code. The decision of the hearing officer shall be final and conclusive. Any amount found to be due shall be immediately due and payable upon the service of notice. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

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 three years, all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and payment to the City, which records the License Tax Collector shall have the right to inspect at all reasonable times.

The records maintained by the operator under this section shall include, but not be limited to, the following:

(a) Daily record of room occupancies.

(b) A written record of each occupancy charge for which an initial exemption is claimed, on a form to be provided by the City. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

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 under this Chapter, it may be
refunded as provided in subparagraphs 12.02 and 12.03 of this section provided a claim in writing there of, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the License Tax Collector. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

An operator may claim as a credit against taxes collected and remitted, any amount paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the License Tax Collector that the operator is entitled to the credit. Any such claim must be filed with the License Tax Collector within thirty (30) calendar days following the payment of the taxes for which the claim is filed. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

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 12.01 of this section. Said claim must be filed within three (3) years of the date upon which the taxes were paid for which the claim is filed. Such claim may only be filed by the person who paid the taxes and only if the transient has been unable to obtain a refund from the operator who collected the tax. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

No refund for the initial thirty (30) consecutive days shall be paid under the provisions of this section when the claim for refund is made solely on the ground that the transient has extended his or her occupancy beyond thirty (30) consecutive days. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

(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.

(b) Failure of an operator to collect tax required to be paid by a transient shall not excuse the operator from the operator’s obligation under this Chapter. 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.

(c) 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.

(d) If any amount required to be paid to the City under this article is not paid when due, the License Tax Collector may, within three years after the amount is due, file for record in the office of the Santa Clara County Recorder a certificate specifying the amount of tax, penalties, and interest due, the name and address of the operator liable for the same as it appears on the records of the License Tax Collector and the fact that the License Tax Collector has complied with all provisions of this article in the determination of the amount required to be paid. Said certificate shall constitute a lien.

(e) From the time of filing the certificate of tax, the amount required to be paid together with penalties and interest constitutes a lien upon real property in the county owned by the operator or acquired by him afterwards and before the lien expires. The lien has the force, effect and priority of a judgement lien for the payment of tax and shall continue for ten years from the time of filing of the certificate unless sooner released or otherwise discharged. This article does not give the City preference over any recorded lien which attached prior to the date when the amounts required to be paid became a lien.

(f) The amounts to be paid by any operator under this Chapter 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 his assets;

(3) Whenever the estate of the operator in the hands of executors, administrators 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 operator required to pay any amount under this article is levied upon by process of law.

(g) At any time within three years after any operator is delinquent in the payment of any amount required to be paid under this Chapter or within 10 years after the last recording of a certificate of lien under subsection (d) of this section, the License Tax Collector may issue a warrant for the enforcement of any liens and for the collection of any amount required to be paid to the City under this Chapter. 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 sale pursuant to a writ of execution. The License Tax Collector may pay or advance to the sheriff, marshal or constable, the same fees, commissions and expenses for his/her services as are provided by law for similar services pursuant to a writ of execution.

(h) At any time within three years after any operator is delinquent in the payment of any amount required to be paid under this Chapter or within ten years after the last recording of a certificate of lien under subsection (d) of the section, the License Tax Collector may forthwith collect the amount in the following manner: the License Tax Collector 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 cost 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 California Code of Civil Procedure. The License Tax Collector shall obtain a warrant from a court of competent jurisdiction prior to entering upon property without the permission of the owner. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

(a) Any operator or other person who violates any provision of this article, or who fails or refuses to furnish a supplemental return or other data required by the License Tax Collector, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor punishable upon conviction, by a fine of not more than one thousand dollars ($1,000) and six (6) months in jail for each offense.

(b) 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 Chapter to be made is guilty of a misdemeanor punishable by a fine not to exceed thousand dollars ($1,000) and six (6) months in jail, or both such fine and imprisonment.

(c) Violations of this article are continuing violations and each day the violation continues constitutes a new and separate violation of this Chapter.

(d) It shall not be a defense to violations of this Chapter that the operator, including a resident manager, had forwarded any return due or tax collected to its principal or corporate headquarters, nor that any failure to file or remit taxes was based on the direction or inaction of such principal or corporate headquarters. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

If an operator violates the provisions of this Chapter, the License Tax Collector may revoke or suspend the operator’s business license pursuant to, and in compliance with, Section III-1-10.04 of the

Municipal Code. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)

The License Tax Collector may promulgate reasonable rules, interpretations and regulations to implement and enforce the provisions of this Chapter. (Ord. 218.2 (part), 11/20/01; Ord. 218, (part), 6/21/83)