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HomeMy WebLinkAboutAgenda Item - 2020-01-07 - Number 7.1 - Ordinance 2836 Transient Lodging Tax 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Subject: Amendments to Article 24.02 Transient Lodging Tax Requiring Transient Lodging Intermediaries to Register, And Collect And Pay Over Transient Room Taxes Meeting Date: January 7, 2020 Staff Member: Shawn Cross Department: Finance Action Required Advisory Board/Commission Recommendation ☐ Motion ☐ Approval ☒ Public Hearing ☐ Denial ☒ Ordinance ☐ None Forwarded ☐ Resolution ☒ Not Applicable ☐ Information Only Comments: ☐ Council Direction ☐ Consent Agenda Staff Recommendation: Enact Ordinance 2836 amending LOC Art. 24.02 to require transient lodging intermediaries to register, collect and pay over transient room taxes Recommended Language for Motion: Move to enact Ordinance 2836 Project / Issue Relates To: ☐Council Goals/Priorities ☐Adopted Master Plan(s) ☐Not Applicable ISSUE BEFORE COUNCIL Shall transient lodging intermediaries be required to pay to the City the 6% transient lodging tax due when they rent lodging to the customer and collect the lodging rent? EXECUTIVE SUMMARY Online lodging hosting platforms operated by entities other than the transient lodging operator itself, known as “transient lodging intermediaries,” have emerged and grown since the Transient Room Tax was imposed in 1993. Transient lodging intermediaries collect transient room rent for traditional hotels and motels and, more recently, short-term rentals of dwellings. This ordinance amendment follows the 2018 statutory changes to require transient lodging 7.1 Page 2 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city intermediaries to collect and pay over transient room tax for lodging bookings made and rent received. The amendments will also facilitate in the future an agreement with the Oregon Dept. of Revenue (DOR) to collect Lake Oswego’s transient lodging tax from transient lodging intermediaries and forward the tax payments to the City, pursuant to 2017 legislation. BACKGROUND The Transient Lodging Tax article, LOC Art. 24.02, was enacted in 1993. Traditionally hotel reservations were made directly with the hotel, and room charges were directly collected by the hotel operator. Since then transient lodging intermediaries, not related to the hotel, have emerged, facilitating online customer comparison of hotel room availability and cost, and permitting reservation and payment of lodging directly to the transient lodging intermediary. The intermediary separately contracts with the hotel for the room availability. Additionally, online hosting platforms, such as AirBNB and VRBO, now are the primary market presence for short-term rentals, facilitating rental of portions of dwellings or an entire dwelling through the transient lodging intermediary. Contact with the resident owner of the dwelling is not possible in most cases until after the reservation has been made and paid for. Short-term rentals in Lake Oswego were recently authorized by the Council as an accessory use in the dwelling, subject to limitations in LOC 50.03.004.1.b.ii(7). Ord. 2815 (July 16, 2019). The 2018 Oregon Legislature enacted HB 4120, modifying the State’s transient lodging tax statutes (ORS 320.300 - 320.350), including a requirement that transient lodging intermediaries collect and pay over local transient room tax, when required by the local government. DISCUSSION The transient lodging intermediaries booking traditional hotel rooms on behalf of the five hotels within the City have been collecting and remitting the City’s transient lodging tax even before the enactment of HB 4120 (2018). However, observations of neighboring local jurisdictions are that transient lodging intermediaries booking non-traditional lodging, such as “vacation homes”, and rooms in dwellings, have not been remitting the associated transient lodging taxes. Some of the transient lodging intermediaries have pointed out to those jurisdictions that, according to the jurisdiction’s code, it is the responsibility of the “operator” to collect and remit the transient lodging taxes, not the transient lodging intermediary. Further, the transient lodging tax should be calculated based on the amount paid by the customer for the rental, not the amount remitted by the transient lodging intermediary to the owner of the transient lodging. With the enactment of Ord. 2815 allowing short-term rentals of non-traditional lodging in Lake Oswego, and to implement HB 4120’s obligation that transient lodging intermediaries that collect the rental charges, Art. 24.02 is proposed to be amended to require transient lodging intermediaries register with the City, and that they collect and pay over to the City the transient lodging tax based on the rental amount charged to the customer. Page 3 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city The 2017 Oregon Legislature enacted HB 2400, amending ORS 305.620 to authorize the DOR to enter into intergovernmental agreements to collect local transient lodging tax on behalf of cities and counties. “For such a collection effort to occur, a city’s collection and accounting practices must be coordinated with collection and accounting procedures used by the DOR.” (LOC Legal Guide to Collecting Transient Lodging Tax in Oregon, pg. 7.) Currently DOR has not implemented that program, but it is expected to do so in the near term. FISCAL IMPACT The fiscal impact will be positive but difficult to estimate with the little amount of data we have on the additional non-traditional short-term rentals. I would estimate the total 6% transient lodging tax from the non-traditional short-term rentals to be somewhere between $10,000 and $40,000 annually. ATTACHMENTS 1. Ordinance 2836 2. Article 24.02 Code changes with staff commentary Ordinance 2836 Page 1 of 2 ORDINANCE 2836 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE OSWEGO AMENDING LOC ARTICLE 24.02 TRANSIENT LODGING TAX, REQUIRING TRANSIENT LODGING INTERMEDIARIES TO REGISTER, AND COLLECT AND PAY OVER TRANSIENT ROOM TAXES, AND RELATED AMENDMENTS. WHEREAS, the Transient Lodging Tax article, LOC Art. 24.02, was enacted in 1993; and WHEREAS, transient lodging intermediaries now facilitate online reservation of transient lodging and payment directly to the transient lodging intermediary; and WHEREAS, any person other than an Operator of transient lodging that facilitates the retail sale of the transient lodging and charges for occupancy, and that collects the consideration charged to the transient for occupancy of the transient lodging, should be required to collect and pay over the transient room tax due; and WHEREAS, short-term rental of portions of dwellings or an entire dwelling in Lake Oswego was recently authorized as an accessory use of the dwelling, subject to limitations in LOC 50.03.004.1.b.ii(7), and the primary method of booking such short-term rentals is through a transient lodging intermediary; and WHEREAS, the 2018 Oregon Legislature enacted HB 4120, modifying the State’s transient lodging tax statutes (ORS 320.300 - 320.350), including a requirement that transient lodging intermediaries collect and pay over local transient room tax, when required by the local government; and WHEREAS, the 2017 Oregon Legislature enacted HB 2400, amending ORS 305.620 to authorize the Oregon Dept. of Revenue to enter into intergovernmental agreements to collect local transient lodging tax on behalf of cities, provided the city’s collection and accounting practices are coordinated with collection and accounting procedures used by the Oregon Dept. of Revenue; The City of Lake Oswego ordains as follows: Section 1. Article 24.02 of the Lake Oswego Code is hereby amended by adding the text shown in double-underlined type and deleting the text shown in strikethrough type, as set forth on Attachment 1. Section 2. Severability. The provisions of this ordinance are severable. If any portion of this ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this ordinance. ATTACHMENT 1 Ordinance 2836 Page 2 of 2 Section 3. Effective Date. As provided in Section 35C of Chapter VII of the Lake Oswego Charter, this ordinance shall take effect on the 30th day following enactment. Enacted at the regular meeting of the City Council of the City of Lake Oswego held on the 7th day of January, 2020. AYES: NOES: ABSTAIN: EXCUSED: ___________________________________ Kent Studebaker, Mayor ATTEST: ___________________________________ Anne-Marie Simpson, City Recorder APPROVED AS TO FORM: ________________________________ David Powell, City Attorney Page 1 – Attachment 1 to Exhibit Ord.2836 Article 24.02 Transient Lodging Tax 24.02.001 Transient Lodging Tax. This article shall be known as the Transient Lodging Tax of the City of Lake Oswego. 24.02.010 Definitions. As used in this article: Accrual Accounting means the operator enters the rent due from a transient on his or her records when the rent is earned, whether or not it is paid. Cash Accounting means the operator does not enter the rent due from a transient on his or her records until rent is paid. City means the City of Lake Oswego. Hotel means any structure or any portion of any structure which is occupied or intended or designed for transient occupancy for 30 days or less for dwelling, lodging, or sleeping purposes. This includes any hotel, inn, tourist home or house, motel, studio hotel, bed and breakfast, bachelor hotel, lodging house, rooming house, apartment house, public or private dormitory, public or private club, and also means space in mobile home or trailer parks, or similar structure or space so occupied. Collection reimbursement charge means the amount a transient lodging tax collector may retain as reimbursement for the costs incurred by the transient lodging tax collector in collecting and reporting a transient lodging tax and in maintaining transient lodging tax records. Occupancy means the use or possession or the right to the use or possession for lodging or sleeping purposes of any room or rooms in a hotelthe transient lodging or space in a mobile home or trailer park. Operator means the person who is proprietor of the hoteltransient lodging in any capacity. Where the operator performs his or her 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 his or her principal. Compliance with the provisions of these sections by either the principal or managing agent shall be considered to be compliance by both. Person means any individual, firm, partnership, joint venture, association, social club, fraternal organization, public or private dormitory, 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 retail price, including all charges other than taxes, paid by a person forconsideration charged, whether or not received by the operator, for the occupancy of space Attachment 1 to Ordinance 2836 Page 2 – Attachment 1 to Exhibit Ord.2836 in a hotel the transient lodging, valued in money, goods, labor, credits, property or other consideration valued in money, without any deduction. The rent includes all charges that cannot be avoided or declined by the transient as a result of occupancy, e.g., “resort fees,” “facility access fees.” The total retail price paid by a person for occupancy of the transient lodging that is part of a travel package may be determined by reasonable and verifiable standards from books and records kept in the ordinary course of the transient lodging tax collector’s business. Rent Package Plan means the consideration charged for both food and rent where a single rate is made for the total of both. The amount applicable to rent for determination of transient room tax under this article shall be the same charge made for rent when not a part of a package plan. Short-Term Rental Hosting Platform means a business or other person that facilitates the retail sale of transient lodging by connecting occupants with transient lodging providers, either online or in any other manner. Short-term rental hosting platforms are transient lodging intermediaries. Tax means either the tax payable by the transient or the aggregate amount of taxes due from an operator or from a transient lodging intermediary during the period for which he or shethe operator or transient lodging intermediary is required to report his or her tax collections. Tax Administrator means the Finance Director of the City of Lake Oswego, Oregon, or his or her designee. Transient means any person who exercises occupancy or is entitled to occupancy in a the hoteltransient lodging for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days. The day a transient checks out of the hoteltransient lodging shall not be included in determining the 30-day period if the transient is not charged rent for that day by the operator. Any such person so occupying space in a the hoteltransient lodging shall be deemed to be a transient until the period of 30 days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy, or the tenancy actually extends more than 30 consecutive days. 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. A person who pays for lodging on a monthly basis, irrespective of the number of days in such month, shall not be deemed a transient. Transient Lodging means (a) Hotel, motel and inn dwelling units that are used for temporary overnight human occupancy; (b) Spaces used for parking recreational vehicles or erecting tents during periods of human occupancy; or (c) Houses, cabins, condominiums, apartment units or other dwelling units, or portions of any of these dwelling units, that are used for temporary human occupancy, provided such occupancy is for less than a 30-day period. Transient lodging intermediary means a person other than an Operator that facilitates the retail sale of transient lodging and: Page 3 – Attachment 1 to Exhibit Ord.2836 (a) Charges for occupancy of the transient lodging; (b) Collects the consideration charged for occupancy of the transient lodging; or (c) Receives a fee or commission and requires the Operator to use a specified third-party entity to collect the consideration charged for occupancy of the transient lodging. Short-term rental hosting platforms are transient lodging intermediaries. Transient lodging tax collector means an Operator or a transient lodging intermediary. 24.02.020 Tax Imposed. 1. For the privilege of occupancy in any hoteltransient lodging in the City, each transient shall pay a tax in the amount of 6% of the rent charged by the operator for transient lodging. The tax constitutes a debt owed by the transient to the City, which is extinguished only by payment by the transient lodging tax collectoroperator to the City. The transient shall pay the tax to the transient lodging tax collectoroperator of the hotel at the time the rent is paid. The transient lodging tax collector operator shall enter the tax on his or herthe transient lodging tax collector’s records when rent is collected if the transient lodging tax collectoroperator keeps his or her records on the cash accounting basis and when earned if the transient lodging tax collector operator keeps his or her records on the accrual accounting basis. If rent is paid in installments, a proportionate share of the tax shall be paid by the transient to the transient lodging tax collectoroperator with each installment. In all cases, the rent paid or charged for occupancy shall exclude the sale of any goods, services and commodities, other than the furnishing of rooms, accommodations, and space occupancy in mobile home parks or trailer parks. 2. The tax imposed by this article shall apply to all hoteltransient lodgings located within the corporate limits of the City. 24.02.030 Tax – Collection by Operator. 1. Every operator renting rooms in the City, the occupancy of which is not exempt under the terms of LOC 24.02.050, shall collect a tax from the occupant. The tax collected or accrued by the operator constitutes a debt owed by the operator to the City. Every transient lodging tax collector shall collect the tax at the time rent is paid, unless exempt under LOC 24.02.050. If payment is by credit card, for purposes of this section, payment is made at the time credit card information is provided to the transient lodging tax collector, not when the transient lodging tax collector ultimately receives credit for the transaction. While holding the payment in trust for the city, a transient lodging tax collector may commingle the tax proceeds with the transient lodging tax collector’s funds, but the transient lodging tax collector is not the owner of tax proceeds, except that, when a return is filed, the transient lodging tax collector becomes the owner of the collection reimbursement charge. Transient lodging tax collectors may choose to file returns and remit payment based on amounts accrued but not yet collected. The transient lodging tax collector is liable for any tax that should have been collected from the occupant, except in cases of nonpayment of rent by the occupant. Page 4 – Attachment 1 to Exhibit Ord.2836 2. In all cases of credit or deferred payment of rent, the payment of tax to the operator or transient lodging intermediary may be deferred until the rent is paid, and the operator or transient lodging intermediary shall not be liable for the tax until credits are paid or deferred payments are made. Adjustments may be made for uncollectibles. 3. The tax administrator shall enforce provisions of this article and shall have the power to adopt rules and regulations not inconsistent with this code as may be necessary to aid in enforcement. 4. For rent collected on portions of a dollar, fractions of a penny of tax shall not be remitted. 24.02.040 Tax – Operator Duties. Each operator or transient lodging intermediary shall collect the tax imposed by LOC 24.02.020 at the same time as the rent is collected from every transient. The amount of tax shall be separately stated upon the operator’s or transient lodging intermediary’s records, and any receipt rendered. No operator of a hoteltransient lodging or a transient lodging intermediary shall advertise that the tax or any part of the tax will be assumed or absorbed by the operator or transient lodging intermediary, or that it will not be added to the rent or that when added any part will be refunded, except in the manner provided by this article. 24.02.050 Tax – Exemptions. 1. No tax imposed under LOC 24.02.020 shall be imposed upon: a. Any occupant transient for more than 30 successive calendar days; (a person who pays on a monthly basis, irrespective of the number of days in such month, shall not be deemed a transient); b. Any transientoccupant whose rent is of a value less than $4.00 per day; c. Any transientoccupant whose rent is paid for hospital room or to a medical clinic, convalescent home or home for aged people; or d. Employees, officials or agents of the U.S. Government occupying a the hoteltransient lodging in the course of official business. 24.02.060 Registration of Operator or Transient Lodging Intermediary. 1. Every person engaging or about to engage in business as an operator of a the hoteltransient lodging in the City or collecting rent as a transient lodging intermediary for occupancy of the transient lodging shall register with the tax administrator on a form provided by the tax administrator. Operators engaged in business at the time this code is adopted must register not later than 20 calendar days after the effective date of this code. Transient lodging intermediaries collecting rent for transient lodging as of [effective date of Ordinance] must register not later than 20 calendar days after said date. Operators starting business after this code is adopted or transient lodging intermediaries collecting rent for transient lodging after [effective date of Ordinance] must register within 15 calendar days after commencing business or collecting rent, which occurs first. The privilege of registration after the date of imposition of Page 5 – Attachment 1 to Exhibit Ord.2836 such tax shall not relieve any person from the obligation of payment or collection of tax regardless of registration. 2. Registration shall set forth the name under which an operator transacts or intends to transact business or the name(s) under which a transient lodging intermediary collects or intents to collect rent, the location(s) of his or her place or places of business and such other information to facilitate the collection of the tax as the tax administrator may require. The registration shall be signed by the registering operator or transient lodging intermediary. Transient lodging intermediaries shall provide to the tax administrator, upon such time(s) as the tax administrator may request, the location(s) of all transient lodging that the transient lodging intermediary has an agreement with an Operator to collect rents for transient lodging at the time of the request. 3. The tax administrator shall, within 10 days after registration: a. For Operators: issue Issue without charge a certificate of authority to each registrant operator to collect the tax from the occupanttransient, together with a duplicate thereof for each additional place of business of each registrant. Certificates shall be nonassignable and nontransferable and shall be surrendered immediately to the tax administrator upon the cessation of business at the location named or upon its sale or transfer. Each certificate and duplicate shall state the place of business to which it is applicable and shall be prominently displayed therein so as to be seen and come to the notice readily of all occupants and persons seeking occupancy. b. For Transient Lodging Intermediaries: Issue without charge a certificate of authority to each registrant transient lodging intermediary to collect the tax from transients occupying transient lodging within the city. Certificates shall be nonassignable and nontransferable and shall be surrendered immediately to the tax administrator upon termination of all of the transient lodging intermediary’s right to collect rents for transient lodging within the city. 4. Said certificate shall, among other things, state the following: a. The name of the operator or transient lodging intermediary; b. For operators, The the address of the hoteltransient lodging; c. The date upon which the certificate was issued; and d. (1) For operators: "THIS TRANSIENT OCCUPANCY REGISTRATION CERTIFICATE signifies that the person named on the face hereof has fulfilled the requirements of the TRANSIENT LODGING TAX ORDINANCE ARTICLE of Lake Oswego, Oregon, by registration with the tax administrator for the purposes of collection from transients the lodgings tax imposed by said City 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 hoteltransient lodging without strictly complying with all of the local applicable laws, including but not limited to those requiring a Page 6 – Attachment 1 to Exhibit Ord.2836 permit form any board, commission, department or office of the City of Lake Oswego. This certificate does not constitute a permit." (2) For transient lodging intermediaries: "THIS TRANSIENT OCCUPANCY REGISTRATION CERTIFICATE signifies that the person named on the face hereof has fulfilled the requirements of the TRANSIENT LODGING TAX ARTICLE of Lake Oswego, Oregon, by registration with the tax administrator for the purposes of collection from transients the lodgings tax imposed by said City 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 transient lodging or to act as a transient lodging intermediary without strictly complying with all of the local applicable laws, including but not limited to those requiring a permit form any board, commission, department or office of the City of Lake Oswego. This certificate does not constitute a permit." 24.02.070 Due Date, Returns, Payments and Collection Charges. 1. The tax imposed by LOC 24.02.020 shall be paid by the transient to the operator or transient lodging intermediary at the time that rent is paid. All amounts of such taxes collected by any operator, less the collection reimbursement charge as provided in subsection (4) of this section, are due and payable to the tax administrator on a monthly basis on the fifteenth of the following month for the preceding month, and are delinquent on the last day of the month in which they are due. 2. On or before the fifteenth day of the month following each monthly of collection, a return for the preceding monthly tax collections shall be filed with the tax administrator. The returns shall be filed in such form as the tax administrator may prescribe by every operator or transient lodging intermediary liable for payment of tax. 3. Returns shall show the amount of tax collected or otherwise due for the related period. The tax administrator may require returns to show the total rentals and locations of transient lodging upon which tax was collected or otherwise due, gross receipts of operator or transient lodging intermediary within the city for such period and an explanation in detail of any discrepancy between such amounts, and the amount of rents exempt, if any. 4. The person required to file the return shall deliver the return, together with the remittance of the amount of the tax due, to the tax administrator at his or her office, either by personal delivery, or by mail, or such electronic means as the tax administrator shall authorize. The operator / transient lodging intermediary collecting the rent may retain a collection reimbursement charge of not more than 5% of the collection tax. If the return is mailed, the postmark shall be considered the date of delivery for determining delinquencies. 5. For a good cause, the tax administrator may extend for not to exceed one month the time for making any return or payment of tax. No further extension shall be granted, except by the City Council. Any operator or transient lodging intermediary to whom an extension is granted shall pay interest at the rate of 1% per month on the amount of tax due without proration for a fraction of a month. If a return is not filed, and the tax and interest due is not Page 7 – Attachment 1 to Exhibit Ord.2836 paid by the end of the extension granted, then the interest shall become a part of the tax for computation of penalties described in LOC 24.02.080. 6. Upon request of the tax administrator, Operators and transient lodging intermediaries must provide all physical addresses of transient lodging facilities within the city limits and the related contact information, including the name and mailing address, of the general manager, agent, owner, host or other responsible person for the location. 24.02.080 Penalties and Interest. 1. Original Delinquency. Any operator or transient lodging intermediary who has not been granted an extension of time for remittance of tax due and who fails to remit any tax imposed by LOC 24.02.020 prior to delinquency shall pay a penalty of 10% of the amount of the tax due in addition to the amount of the tax. 2. Continued Delinquency. Any operator or transient lodging intermediary who has not been granted an extension of time for remittance of tax due, and who failed to pay any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 15% of the amount of the tax due plus the amount of the tax the 10% penalty first imposed. 3. Fraud. If the tax administrator determines that the nonpayment of any remittance due pursuant to this article is due to fraud or intent to evade the provisions of this article, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (1) and (2) of this section. 4. Interest. In addition to the penalties imposed, any operator or transient lodging intermediary who fails to remit a tax imposed by LOC 24.02.020 shall pay interest at the rate of one-half of 1% per month or a fraction thereof without proration for portions of a month, on the amount of the tax due, exclusive of penalties, from the date on which the remittance first became delinquent until paid. 5. Penalties Merged With Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall be merged and become a part of the tax required to be paid. 6. Petition for Waiver. Any operator or transient lodging intermediary who fails to remit the tax herein levied within the time required shall pay the penalties. The operator or transient lodging intermediary may petition the tax administrator for waiver and refund of the penalty or any portion thereof and the tax administrator may, if a good and sufficient reason is shown, waive and direct a refund of the penalty and any portion thereof. 24.02.090 Deficiencies. 1. If the tax administrator determines that the returns are incorrect, the or she tax administrator may compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns, or upon the basis of any information within his or herthe tax administrator’s possession or that may come into his or her possession. One or more deficiency determinations may be made of the amount due for one, or more than one, period, Page 8 – Attachment 1 to Exhibit Ord.2836 and the amount so determined shall be due and payable immediately upon service of notice as herein provided after which the amount determined is delinquent. Penalties on deficiencies shall be applied as set forth in LOC 24.02.080. 2. In making a determination, the tax administrator may offset any overpayments which may have been previously made for a period or periods against any underpayment for a subsequent period or periods or against penalties and interest on the underpayments. The interest on underpayments shall be computed in the manner set for in LOC 24.02.080. 3. The tax administrator shall give to the operator or transient lodging intermediaryoccupant a written notice of his or her determination. The notice may be served personally, or by mail, or of an electronic means of communication has been given by the operator or transient lodging intermediary, by electronic means. If by mail, the notice shall be addressed to the operator at his or her the address as it appears on the records of the tax administrator. In case of service by mail or any notice required by these sections, the service is complete at the time of deposit in the United States Post Office. 4. Except in the case of fraud or intent to evade this article or authorized rules and regulations, every deficiency determination shall be made and notice mailed within three years after the last day of the month following the close of the monthly period for which the amount is proposed to be determined or within three years after return is filed, whichever period expires the later. 5. Any determination shall become due and payable upon receipt of notice and shall become final within 10 days after the tax administrator has given notice. The operator or transient lodging intermediary may petition for redemption and refund if the petition is filed before the determination become final as herein provided. 24.02.100 Fraud or Evasion. If any operator or transient lodging intermediary shall fail or refuse to collect the tax or to make any report and remittance of said tax or any portion thereof as required by this article, or makes a fraudulent return or otherwise willfully attempts to evade these sections, the tax administrator shall proceed in such manner as he or shethe tax administrator may deem best to obtain facts and information on which to base an estimate of the tax due. As soon as the tax administrator has determined the tax due that is imposed by this article from any operator or transient lodging intermediary who has failed or refused to collect the same and to report and remit said tax, he or shethe tax administrator shall proceed to determine and assess against such operator or transient lodging intermediary the tax, interest and penalties provided for by this article. In case such determination is made, the tax administrator shall give a notice pursuant to LOC 24.02.090(4) of the amount so assessed. Such determination and notice shall be made and mailed within three years after discover by the tax administrator of any fraud, intent to evade or failure or refusal to collect said tax, or failure to file a return. A determination shall become due and payable immediately upon receipt of notice and shall become final within 10 days after the tax administrator has given notice. The operator or transient lodging Page 9 – Attachment 1 to Exhibit Ord.2836 intermediary may, however, petition for redemption and refund if the petition is filed before the determination becomes final. 24.02.110 Operator Delay in Payment of Tax. If the tax administrator believes that the collection of any tax or any amount of tax required to be collected and paid to the City will be jeopardized by delay, or if any determination will be jeopardized by delay, the or she tax administrator shall make a determination of the tax or amount of tax required to be collected, noting the fact upon the determination. The amount so determined shall be immediately due and payable, and the operator or transient lodging intermediary shall immediately pay such determination to the tax administrator after service of notice. The operator may petition, after payment has been made, for redemption and refund of such determination, if the petition is filed within 10 days from the date of service of notice by the tax administrator. 24.02.120 Redetermination. 1. Any person against whom a determination is made under LOC 24.02.090 to 24.02.110 or any person directly interested may petition for a redetermination and redemption and refund within the time required in LOC 24.02.090 to 24.02.110. If a petition for redetermination and refund is not filed within the time required in LOC 24.02.090 to 24.02.110, the determination becomes final at the expiration of the allowable time. 2. If a petition for redetermination and refund is filed within the allowable period, the tax administrator shall reconsider the determination, and, if the person has so requested in his or herthe petition, shall grant the person an oral hearing and shall give him 10 days’ notice of the time and place of the hearing. The tax administrator may continue the hearing from time to time as may be necessary. 3. The tax administrator may decrease or increase the amount of the determination as a result of the hearing and if an increase is determined such increase shall be payable immediately after the hearing. 4. The order or decision of the tax administrator upon a petition for redemption or redetermination and refund becomes final 10 days after service upon the petitioner of notice, unless appeal of such order or decision is filed with the City Council within the 10 days after service of such notice. 5. No petition or appeal shall be effective for any purpose unless the operator petitioner or appellant has first complied with the payment provisions. 24.02.130 Refunds. 1. Refunds by City to Operator. Whenever the amount of any tax, penalty, or interest has been paid more than once or has been erroneously or illegally collected or received by the tax administrator under this article, it may be refunded, provided a verified claim in writing, stating the specific reason upon which the claim is founded, is filed with the tax administrator within three years from the day of payment. The claim shall be made on forms provided by the tax administrator. If the claim is approved by the tax administrator, the excess amount collected or Page 10 – Attachment 1 to Exhibit Ord.2836 paid may be refunded or may be credited on any amount then due and payable from the operator from who it was collected or by whom paid and the balance may be refunded to such operatorperson, his or her administrators, executors or assignees. 2. Refunds by City to Transient. Whenever the tax required by this article has been collected by the operator or transient lodging intermediary and deposited by the operator with the tax administrator and it is later determined that the tax was erroneously or illegally collected or received by the tax administrator, it may be refunded by the tax administrator to the transient, provided a verified claim in writing, stating the specific reason on which the claim is founded, is filed with the tax administrator within three years from the date of payment. 3. Refunds by Operator to Tenant. Whenever the tax required by this article has been collected by the operator and it is later determined that the tenant occupies the hoteltransient lodging for a period exceeding 30 days without interruption, the operator or transient lodging intermediary shall refund to such tenant the tax previously collected by the operator from that tenant as a transient. The operator or transient lodging intermediary shall account for such collection and refund to the tax administrator. If the operator or transient lodging intermediary has remitted the tax prior to refund or credit to the tenant, the or she operator or transient lodging intermediary shall be entitled to a corresponding refund under this section. 24.02.140 Security for Collection of Tax. 1. The tax administrator, after delinquencies or whenever the or she tax administrator deems it necessary to ensure compliance with this chapter, may require any operator or transient lodging intermediary to deposit with the tax administrator such security in the form of cash, bond, or other security as the tax administrator may determine. The amount of the security shall be fixed by the tax administrator but shall not be greater than twice the operator’s or transient lodging intermediary’s estimated average monthly liability for the period for which the operator or transient lodging intermediary she files returns, determined in such manner as the tax administrator deems proper, or $5,000, whichever amount is lesser. The amount of the security may be increased or decreased by the tax administrator subject to the limitations herein provided. 2. At any time within three years after any tax or any amount of tax required to be collected becomes due and payable or at any time within three years after any determination becomes final, the tax administrator may bring an action in the courts of this state, or any other state, or of the United States in the name of the City to collect the amount delinquent together with penalties and interest. 24.02.150 Administration – General. 1. Every operator and transient lodging intermediary shall keep guest records of room sales and accounting books and records of the room sales. All records shall be retained by the operator or transient lodging intermediary for a period of three years and six months after they come into being. 2. The tax administrator, or any person authorized in writing by the tax administrator, may examine during normal business hours, the books, papers and accounting records relating to Page 11 – Attachment 1 to Exhibit Ord.2836 room sales of any operator or transient lodging intermediary, after notification to the operator or transient lodging intermediary and may investigate the business of the operator or transient lodging intermediary and the records of the location(s) of the transient lodging in order to verify the accuracy of any return made, or if no return is made by the operator or transient lodging intermediary, to ascertain and determine the amount required to be paid. 3. It shall be unlawful for the tax administrator or any person having an administrative or clerical duty under the provisions of this article to make known in any manner whatever the business affairs, operations or information obtained by an investigation of records and equipment of any persons required to obtain a Transient Occupancy Registration Certificate, or pay a transient occupancy tax, or any other persons visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or to permit any statement or application, or copy of either, or any book containing any abstract or particulars thereof to be seen or examined by any person; provided that nothing in this subsection shall be construed to prevent: a. The disclosure to, or the examination of records and equipment to another City or State official, employee or agent for collection of taxes for the sole purposes of administrating or enforcing any provision of this article, or collecting taxes imposed hereunder. b. The disclosure, after the filing of a written request to that effect, to the taxpayer, receivers, trustees, executors, administrator, assignees, and guarantors, if directly interested, of information as to any paid tax, any unpaid tax or amount of tax required to be collected, or interest and penalties; further provided, however, that the City Attorney approves each such disclosure and that the tax administrator may refuse to make any disclosure referred to in this subsection when in his or herthe City Attorney’s opinion the public interest would suffer thereby. c. The disclosure of the names and addresses of any persons to whom Transient Occupancy Registration Certificates have been issued. d. The disclosure of general statistics regarding taxes collected or transient lodging business done in the City. 4. The tax administrator shall place all tax revenues into the general fund of the City. Such revenues shall be allocated for expenditures pursuant to State Local Budget Law. 24.02.160 Administration – Appeal to Council. Any person aggrieved by a final decision of the tax administrator may appeal to the City Council by filing a notice of appeal with the City Recorder within 10 days of the serving or the mailing of the notice of the decision given by the tax administrator. The tax administrator shall submit the file of said appealed matter to the Mayor who shall fix a time and place for hearing the appeal from the decision of the tax administrator. The Mayor shall give the appellant not less than 10 days written notice of the time and place of the hearing. Page 12 – Attachment 1 to Exhibit Ord.2836 24.02.170 Violations. Any operator, transient lodging intermediary or other person who shall fail or refuse to register as required herein, or who shall fail or refuse to furnish a return, supplemental return or other data required herein or by the tax administrator, or, with intent to defeat or evade the determination of any amount due hereunder, shall make, render, sign or verify any false or fraudulent report, commits an offense which constitutes a violation of this article, punishable upon conviction as a violation pursuant to LOC 13.02.020. _________________________________ Page 1 – Attachment 1 to Council Report Ord. 2836 Article 24.02 Transient Lodging Tax 24.02.001 Transient Lodging Tax. This article shall be known as the Transient Lodging Tax of the City of Lake Oswego. 24.02.010 Definitions. As used in this article: Accrual Accounting means the operator enters the rent due from a transient on his or her records when the rent is earned, whether or not it is paid. Cash Accounting means the operator does not enter the rent due from a transient on his or her records until rent is paid. City means the City of Lake Oswego. Hotel means any structure or any portion of any structure which is occupied or intended or designed for transient occupancy for 30 days or less for dwelling, lodging, or sleeping purposes. This includes any hotel, inn, tourist home or house, motel, studio hotel, bed and breakfast, bachelor hotel, lodging house, rooming house, apartment house, public or private dormitory, public or private club, and also means space in mobile home or trailer parks, or similar structure or space so occupied. Staff Comment: Definition replaced with statutory definition of Transient Lodging, ORS 320.300(1), below. Collection reimbursement charge means the amount a transient lodging tax collector may retain as reimbursement for the costs incurred by the transient lodging tax collector in collecting and reporting a transient lodging tax and in maintaining transient lodging tax records. Staff Comment: This term is used in LOC 24.02.070, below. This definition is taken from ORS 320.300. Occupancy means the use or possession or the right to the use or possession for lodging or sleeping purposes of any room or rooms in a hotelthe transient lodging or space in a mobile home or trailer park. Staff comment: New transient lodging definition includes mobile home parks and trailer parks. Operator means the person who is proprietor of the hoteltransient lodging in any capacity. Where the operator performs his or her 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 his or her principal. ATTACHMENT 2 _________________________________ Page 2 – Attachment 1 to Council Report Ord. 2836 Compliance with the provisions of these sections by either the principal or managing agent shall be considered to be compliance by both. Person means any individual, firm, partnership, joint venture, association, social club, fraternal organization, public or private dormitory, 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 retail price, including all charges other than taxes, paid by a person forconsideration charged, whether or not received by the operator, for the occupancy of space in a hotel the transient lodging, valued in money, goods, labor, credits, property or other consideration valued in money, without any deduction. The rent includes all charges that cannot be avoided or declined by the transient as a result of occupancy, e.g., “resort fees,” “facility access fees.” The total retail price paid by a person for occupancy of the transient lodging that is part of a travel package may be determined by reasonable and verifiable standards from books and records kept in the ordinary course of the transient lodging tax collector’s business. Staff Comment: In the first sentence, the use of “retail price” is from ORS 320.305(1)(b) and matches what the state lodging tax is charged upon. The “whether or not received by the operator” is removed now that transient lodging intermediaries are responsible for the tax (and the money received by the operator would already have the tax removed). This is defining what the rent amount is, not whether the operator has received it. “In 2017, the Legislature amended ORS 305.620 to allow the Oregon Department of Revenue (DOR) to collect local [transient lodging tax] on behalf of cities. Under that amendment, the DOR is permitted to collect local [transient lodging tax] if a city and the DOR enter into an intergovernmental agreement and the DOR recoups their administrative costs. For such a collection effort to occur, a city’s collection and accounting practices must be coordinated with collection and accounting procedures used by the DOR.” (LOC Legal Guide to Collecting Transient Lodging Tax in Oregon, pg. 7.) The concept of defining rent by whether the charge can be avoided or declined is from the LOC Model Code, Rent definition; the examples are added for clarity. The last sentence is per ORS 320.305(b)(A). Rent Package Plan means the consideration charged for both food and rent where a single rate is made for the total of both. The amount applicable to rent for determination of transient room tax under this article shall be the same charge made for rent when not a part of a package plan. Short-Term Rental Hosting Platform means a business or other person that facilitates the retail sale of transient lodging by connecting occupants with transient lodging providers, either online _________________________________ Page 3 – Attachment 1 to Council Report Ord. 2836 or in any other manner. Short-term rental hosting platforms are transient lodging intermediaries. Staff Comment: This definition is from the League of Oregon Cities Model Code (LOC Model Code). It is used in the definition of transient lodging intermediary to make it clear that hosting platforms are subject to the requirement for registration and for payment of the tax that is collected through the hosting platform. Tax means either the tax payable by the transient or the aggregate amount of taxes due from an operator or from a transient lodging intermediary during the period for which he or shethe operator or transient lodging intermediary is required to report his or her tax collections. Staff Comment: Modified to add applicability to transient lodging intermediary. Tax Administrator means the Finance Director of the City of Lake Oswego, Oregon, or his or her designee. Transient means any person who exercises occupancy or is entitled to occupancy in a the hoteltransient lodging for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days. The day a transient checks out of the hoteltransient lodging shall not be included in determining the 30-day period if the transient is not charged rent for that day by the operator. Any such person so occupying space in a the hoteltransient lodging shall be deemed to be a transient until the period of 30 days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy, or the tenancy actually extends more than 30 consecutive days. 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. A person who pays for lodging on a monthly basis, irrespective of the number of days in such month, shall not be deemed a transient. Transient Lodging means (a) Hotel, motel and inn dwelling units that are used for temporary overnight human occupancy; (b) Spaces used for parking recreational vehicles or erecting tents during periods of human occupancy; or (c) Houses, cabins, condominiums, apartment units or other dwelling units, or portions of any of these dwelling units, that are used for temporary human occupancy, provided such occupancy is for less than a 30-day period. Staff Comment: Definition of transient lodging per ORS 320.300(1), with “provided such occupancy is for less than a 30-day period” to make it clear that the tax is imposed only for stays less than a 30-day period. There is no substantive difference with the “hotel” definition. This change in name only is for clarity to the reader: a short-term rental operator renting out a single bedroom may not think that they are operating a “hotel.” The new “transient lodging” definition is as expansive as the prior “hotel” definition, in that is applicable to “any structure which is occupied or intended or designed for transient occupancy for 30 days or less for dwelling, lodging, or sleeping _________________________________ Page 4 – Attachment 1 to Council Report Ord. 2836 purposes. This includes any … tourist home or house, motel, studio hotel, bed and breakfast, bachelor hotel, lodging house, rooming house, apartment house….” Transient lodging intermediary means a person other than an Operator that facilitates the retail sale of transient lodging and: (a) Charges for occupancy of the transient lodging; (b) Collects the consideration charged for occupancy of the transient lodging; or (c) Receives a fee or commission and requires the Operator to use a specified third-party entity to collect the consideration charged for occupancy of the transient lodging. Short-term rental hosting platforms are transient lodging intermediaries. Staff Comment: This definition is from ORS 320.300, except the last sentence is added for clarity. Transient lodging tax collector means an Operator or a transient lodging intermediary. Staff Comment: This definition is from ORS 320.300, except Lake Oswego’s “Operator” is used in lieu of “transient lodging provider.” 24.02.020 Tax Imposed. 1. For the privilege of occupancy in any hoteltransient lodging in the City, each transient shall pay a tax in the amount of 6% of the rent charged by the operator for transient lodging. The tax constitutes a debt owed by the transient to the City, which is extinguished only by payment by the transient lodging tax collectoroperator to the City. The transient shall pay the tax to the transient lodging tax collectoroperator of the hotel at the time the rent is paid. The transient lodging tax collector operator shall enter the tax on his or herthe transient lodging tax collector’s records when rent is collected if the transient lodging tax collectoroperator keeps his or her records on the cash accounting basis and when earned if the transient lodging tax collector operator keeps his or her records on the accrual accounting basis. If rent is paid in installments, a proportionate share of the tax shall be paid by the transient to the transient lodging tax collectoroperator with each installment. In all cases, the rent paid or charged for occupancy shall exclude the sale of any goods, services and commodities, other than the furnishing of rooms, accommodations, and space occupancy in mobile home parks or trailer parks. Staff comment: The exclusion being deleted in the last sentence is address under the Rent definition. 2. The tax imposed by this article shall apply to all hoteltransient lodgings located within the corporate limits of the City. 24.02.030 Tax – Collection by Operator. 1. Every operator renting rooms in the City, the occupancy of which is not exempt under the terms of LOC 24.02.050, shall collect a tax from the occupant. The tax collected or accrued _________________________________ Page 5 – Attachment 1 to Council Report Ord. 2836 by the operator constitutes a debt owed by the operator to the City. Every transient lodging tax collector shall collect the tax at the time rent is paid, unless exempt under LOC 24.02.050. If payment is by credit card, for purposes of this section, payment is made at the time credit card information is provided to the transient lodging tax collector, not when the transient lodging tax collector ultimately receives credit for the transaction. While holding the payment in trust for the city, a transient lodging tax collector may commingle the tax proceeds with the transient lodging tax collector’s funds, but the transient lodging tax collector is not the owner of tax proceeds, except that, when a return is filed, the transient lodging tax collector becomes the owner of the collection reimbursement charge. Transient lodging tax collectors may choose to file returns and remit payment based on amounts accrued but not yet collected. The transient lodging tax collector is liable for any tax that should have been collected from the occupant, except in cases of nonpayment of rent by the occupant. Staff Comment: This is from the LOC Model Code except (1) specific reference to LOC 24.020.050 exemptions is added, and (2) uses the defined term “collection reimbursement charge” for reference to the administrative fee. The LOC Model Code changes the nature of the tax collected until paid over to the City from a debt to funds held in trust for the City. Retains payment of tax on collection or accrual basis. 2. In all cases of credit or deferred payment of rent, the payment of tax to the operator or transient lodging intermediary may be deferred until the rent is paid, and the operator or transient lodging intermediary shall not be liable for the tax until credits are paid or deferred payments are made. Adjustments may be made for uncollectibles. 3. The tax administrator shall enforce provisions of this article and shall have the power to adopt rules and regulations not inconsistent with this code as may be necessary to aid in enforcement. 4. For rent collected on portions of a dollar, fractions of a penny of tax shall not be remitted. 24.02.040 Tax – Operator Duties. Each operator or transient lodging intermediary shall collect the tax imposed by LOC 24.02.020 at the same time as the rent is collected from every transient. The amount of tax shall be separately stated upon the operator’s or transient lodging intermediary’s records, and any receipt rendered. No operator of a hoteltransient lodging or a transient lodging intermediary shall advertise that the tax or any part of the tax will be assumed or absorbed by the operator or transient lodging intermediary, or that it will not be added to the rent or that when added any part will be refunded, except in the manner provided by this article. 24.02.050 Tax – Exemptions. 1. No tax imposed under LOC 24.02.020 shall be imposed upon: _________________________________ Page 6 – Attachment 1 to Council Report Ord. 2836 a. Any occupant transient for more than 30 successive calendar days; (a person who pays on a monthly basis, irrespective of the number of days in such month, shall not be deemed a transient); b. Any transientoccupant whose rent is of a value less than $4.00 per day; c. Any transientoccupant whose rent is paid for hospital room or to a medical clinic, convalescent home or home for aged people; or d. Employees, officials or agents of the U.S. Government occupying a the hoteltransient lodging in the course of official business. 24.02.060 Registration of Operator or Transient Lodging Intermediary. 1. Every person engaging or about to engage in business as an operator of a the hoteltransient lodging in the City or collecting rent as a transient lodging intermediary for occupancy of the transient lodging shall register with the tax administrator on a form provided by the tax administrator. Operators engaged in business at the time this code is adopted must register not later than 20 calendar days after the effective date of this code. Transient lodging intermediaries collecting rent for transient lodging as of [effective date of Ordinance] must register not later than 20 calendar days after said date. Operators starting business after this code is adopted or transient lodging intermediaries collecting rent for transient lodging after [effective date of Ordinance] must register within 15 calendar days after commencing business or collecting rent, which occurs first. The privilege of registration after the date of imposition of such tax shall not relieve any person from the obligation of payment or collection of tax regardless of registration. 2. Registration shall set forth the name under which an operator transacts or intends to transact business or the name(s) under which a transient lodging intermediary collects or intents to collect rent, the location(s) of his or her place or places of business and such other information to facilitate the collection of the tax as the tax administrator may require. The registration shall be signed by the registering operator or transient lodging intermediary. Transient lodging intermediaries shall provide to the tax administrator, upon such time(s) as the tax administrator may request, the location(s) of all transient lodging that the transient lodging intermediary has an agreement with an Operator to collect rents for transient lodging at the time of the request. Staff Comment: Required transient lodging intermediary registration information based upon similarity with operators, with added right of City to request from the transient lodging intermediary the locations they are intending to collect rent for. Concepts taken from LOC Model Code. 3. The tax administrator shall, within 10 days after registration: a. For Operators: issue Issue without charge a certificate of authority to each registrant operator to collect the tax from the occupanttransient, together with a duplicate thereof for each additional place of business of each registrant. Certificates shall be _________________________________ Page 7 – Attachment 1 to Council Report Ord. 2836 nonassignable and nontransferable and shall be surrendered immediately to the tax administrator upon the cessation of business at the location named or upon its sale or transfer. Each certificate and duplicate shall state the place of business to which it is applicable and shall be prominently displayed therein so as to be seen and come to the notice readily of all occupants and persons seeking occupancy. b. For Transient Lodging Intermediaries: Issue without charge a certificate of authority to each registrant transient lodging intermediary to collect the tax from transients occupying transient lodging within the city. Certificates shall be nonassignable and nontransferable and shall be surrendered immediately to the tax administrator upon termination of all of the transient lodging intermediary’s right to collect rents for transient lodging within the city. 4. Said certificate shall, among other things, state the following: a. The name of the operator or transient lodging intermediary; b. For operators, The the address of the hoteltransient lodging; c. The date upon which the certificate was issued; and d. (1) For operators: "THIS TRANSIENT OCCUPANCY REGISTRATION CERTIFICATE signifies that the person named on the face hereof has fulfilled the requirements of the TRANSIENT LODGING TAX ORDINANCE ARTICLE of Lake Oswego, Oregon, by registration with the tax administrator for the purposes of collection from transients the lodgings tax imposed by said City 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 hoteltransient lodging without strictly complying with all of the local applicable laws, including but not limited to those requiring a permit form any board, commission, department or office of the City of Lake Oswego. This certificate does not constitute a permit." (2) For transient lodging intermediaries: "THIS TRANSIENT OCCUPANCY REGISTRATION CERTIFICATE signifies that the person named on the face hereof has fulfilled the requirements of the TRANSIENT LODGING TAX ARTICLE of Lake Oswego, Oregon, by registration with the tax administrator for the purposes of collection from transients the lodgings tax imposed by said City 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 transient lodging or to act as a transient lodging intermediary without strictly complying with all of the local applicable laws, including but not limited to those requiring a permit form any board, commission, department or office of the City of Lake Oswego. This certificate does not constitute a permit." _________________________________ Page 8 – Attachment 1 to Council Report Ord. 2836 24.02.070 Due Date, Returns, Payments and Collection Charges. 1. The tax imposed by LOC 24.02.020 shall be paid by the transient to the operator or transient lodging intermediary at the time that rent is paid. All amounts of such taxes collected by any operator, less the collection reimbursement charge as provided in subsection (4) of this section, are due and payable to the tax administrator on a monthly basis on the fifteenth of the following month for the preceding month, and are delinquent on the last day of the month in which they are due. 2. On or before the fifteenth day of the month following each monthly of collection, a return for the preceding monthly tax collections shall be filed with the tax administrator. The returns shall be filed in such form as the tax administrator may prescribe by every operator or transient lodging intermediary liable for payment of tax. 3. Returns shall show the amount of tax collected or otherwise due for the related period. The tax administrator may require returns to show the total rentals and locations of transient lodging upon which tax was collected or otherwise due, gross receipts of operator or transient lodging intermediary within the city for such period and an explanation in detail of any discrepancy between such amounts, and the amount of rents exempt, if any. 4. The person required to file the return shall deliver the return, together with the remittance of the amount of the tax due, to the tax administrator at his or her office, either by personal delivery, or by mail, or such electronic means as the tax administrator shall authorize. The operator / transient lodging intermediary collecting the rent may retain a collection reimbursement charge of not more than 5% of the collection tax. If the return is mailed, the postmark shall be considered the date of delivery for determining delinquencies. Staff Comment: Allows tax administrator (Finance Dept.) to accept electronic filings. 5. For a good cause, the tax administrator may extend for not to exceed one month the time for making any return or payment of tax. No further extension shall be granted, except by the City Council. Any operator or transient lodging intermediary to whom an extension is granted shall pay interest at the rate of 1% per month on the amount of tax due without proration for a fraction of a month. If a return is not filed, and the tax and interest due is not paid by the end of the extension granted, then the interest shall become a part of the tax for computation of penalties described in LOC 24.02.080. 6. Upon request of the tax administrator, Operators and transient lodging intermediaries must provide all physical addresses of transient lodging facilities within the city limits and the related contact information, including the name and mailing address, of the general manager, agent, owner, host or other responsible person for the location. Staff Comment: Per LOC Model Code, allows tax administrator (Finance Dept) to request locational information for the lodging that the operator and tax lodging intermediaries are filing tax returns. _________________________________ Page 9 – Attachment 1 to Council Report Ord. 2836 24.02.080 Penalties and Interest. 1. Original Delinquency. Any operator or transient lodging intermediary who has not been granted an extension of time for remittance of tax due and who fails to remit any tax imposed by LOC 24.02.020 prior to delinquency shall pay a penalty of 10% of the amount of the tax due in addition to the amount of the tax. 2. Continued Delinquency. Any operator or transient lodging intermediary who has not been granted an extension of time for remittance of tax due, and who failed to pay any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 15% of the amount of the tax due plus the amount of the tax the 10% penalty first imposed. 3. Fraud. If the tax administrator determines that the nonpayment of any remittance due pursuant to this article is due to fraud or intent to evade the provisions of this article, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (1) and (2) of this section. 4. Interest. In addition to the penalties imposed, any operator or transient lodging intermediary who fails to remit a tax imposed by LOC 24.02.020 shall pay interest at the rate of one-half of 1% per month or a fraction thereof without proration for portions of a month, on the amount of the tax due, exclusive of penalties, from the date on which the remittance first became delinquent until paid. 5. Penalties Merged With Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall be merged and become a part of the tax required to be paid. 6. Petition for Waiver. Any operator or transient lodging intermediary who fails to remit the tax herein levied within the time required shall pay the penalties. The operator or transient lodging intermediary may petition the tax administrator for waiver and refund of the penalty or any portion thereof and the tax administrator may, if a good and sufficient reason is shown, waive and direct a refund of the penalty and any portion thereof. 24.02.090 Deficiencies. 1. If the tax administrator determines that the returns are incorrect, the or she tax administrator may compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns, or upon the basis of any information within his or herthe tax administrator’s possession or that may come into his or her possession. One or more deficiency determinations may be made of the amount due for one, or more than one, period, and the amount so determined shall be due and payable immediately upon service of notice as herein provided after which the amount determined is delinquent. Penalties on deficiencies shall be applied as set forth in LOC 24.02.080. 2. In making a determination, the tax administrator may offset any overpayments which may have been previously made for a period or periods against any underpayment for a _________________________________ Page 10 – Attachment 1 to Council Report Ord. 2836 subsequent period or periods or against penalties and interest on the underpayments. The interest on underpayments shall be computed in the manner set for in LOC 24.02.080. 3. The tax administrator shall give to the operator or transient lodging intermediaryoccupant a written notice of his or her determination. The notice may be served personally, or by mail, or of an electronic means of communication has been given by the operator or transient lodging intermediary, by electronic means. If by mail, the notice shall be addressed to the operator at his or her the address as it appears on the records of the tax administrator. In case of service by mail or any notice required by these sections, the service is complete at the time of deposit in the United States Post Office. 4. Except in the case of fraud or intent to evade this article or authorized rules and regulations, every deficiency determination shall be made and notice mailed within three years after the last day of the month following the close of the monthly period for which the amount is proposed to be determined or within three years after return is filed, whichever period expires the later. 5. Any determination shall become due and payable upon receipt of notice and shall become final within 10 days after the tax administrator has given notice. The operator or transient lodging intermediary may petition for redemption and refund if the petition is filed before the determination become final as herein provided. 24.02.100 Fraud or Evasion. If any operator or transient lodging intermediary shall fail or refuse to collect the tax or to make any report and remittance of said tax or any portion thereof as required by this article, or makes a fraudulent return or otherwise willfully attempts to evade these sections, the tax administrator shall proceed in such manner as he or shethe tax administrator may deem best to obtain facts and information on which to base an estimate of the tax due. As soon as the tax administrator has determined the tax due that is imposed by this article from any operator or transient lodging intermediary who has failed or refused to collect the same and to report and remit said tax, he or shethe tax administrator shall proceed to determine and assess against such operator or transient lodging intermediary the tax, interest and penalties provided for by this article. In case such determination is made, the tax administrator shall give a notice pursuant to LOC 24.02.090(4) of the amount so assessed. Such determination and notice shall be made and mailed within three years after discover by the tax administrator of any fraud, intent to evade or failure or refusal to collect said tax, or failure to file a return. A determination shall become due and payable immediately upon receipt of notice and shall become final within 10 days after the tax administrator has given notice. The operator or transient lodging intermediary may, however, petition for redemption and refund if the petition is filed before the determination becomes final. 24.02.110 Operator Delay in Payment of Tax. If the tax administrator believes that the collection of any tax or any amount of tax required to be collected and paid to the City will be jeopardized by delay, or if any determination will be jeopardized by delay, the or she tax administrator shall make a determination of the tax or _________________________________ Page 11 – Attachment 1 to Council Report Ord. 2836 amount of tax required to be collected, noting the fact upon the determination. The amount so determined shall be immediately due and payable, and the operator or transient lodging intermediary shall immediately pay such determination to the tax administrator after service of notice. The operator may petition, after payment has been made, for redemption and refund of such determination, if the petition is filed within 10 days from the date of service of notice by the tax administrator. 24.02.120 Redetermination. 1. Any person against whom a determination is made under LOC 24.02.090 to 24.02.110 or any person directly interested may petition for a redetermination and redemption and refund within the time required in LOC 24.02.090 to 24.02.110. If a petition for redetermination and refund is not filed within the time required in LOC 24.02.090 to 24.02.110, the determination becomes final at the expiration of the allowable time. 2. If a petition for redetermination and refund is filed within the allowable period, the tax administrator shall reconsider the determination, and, if the person has so requested in his or herthe petition, shall grant the person an oral hearing and shall give him 10 days’ notice of the time and place of the hearing. The tax administrator may continue the hearing from time to time as may be necessary. 3. The tax administrator may decrease or increase the amount of the determination as a result of the hearing and if an increase is determined such increase shall be payable immediately after the hearing. 4. The order or decision of the tax administrator upon a petition for redemption or redetermination and refund becomes final 10 days after service upon the petitioner of notice, unless appeal of such order or decision is filed with the City Council within the 10 days after service of such notice. 5. No petition or appeal shall be effective for any purpose unless the operator petitioner or appellant has first complied with the payment provisions. 24.02.130 Refunds. 1. Refunds by City to Operator. Whenever the amount of any tax, penalty, or interest has been paid more than once or has been erroneously or illegally collected or received by the tax administrator under this article, it may be refunded, provided a verified claim in writing, stating the specific reason upon which the claim is founded, is filed with the tax administrator within three years from the day of payment. The claim shall be made on forms provided by the tax administrator. If the claim is approved by the tax administrator, the excess amount collected or paid may be refunded or may be credited on any amount then due and payable from the operator from who it was collected or by whom paid and the balance may be refunded to such operatorperson, his or her administrators, executors or assignees. 2. Refunds by City to Transient. Whenever the tax required by this article has been collected by the operator or transient lodging intermediary and deposited by the operator with _________________________________ Page 12 – Attachment 1 to Council Report Ord. 2836 the tax administrator and it is later determined that the tax was erroneously or illegally collected or received by the tax administrator, it may be refunded by the tax administrator to the transient, provided a verified claim in writing, stating the specific reason on which the claim is founded, is filed with the tax administrator within three years from the date of payment. 3. Refunds by Operator to Tenant. Whenever the tax required by this article has been collected by the operator and it is later determined that the tenant occupies the hoteltransient lodging for a period exceeding 30 days without interruption, the operator or transient lodging intermediary shall refund to such tenant the tax previously collected by the operator from that tenant as a transient. The operator or transient lodging intermediary shall account for such collection and refund to the tax administrator. If the operator or transient lodging intermediary has remitted the tax prior to refund or credit to the tenant, the or she operator or transient lodging intermediary shall be entitled to a corresponding refund under this section. 24.02.140 Security for Collection of Tax. 1. The tax administrator, after delinquencies or whenever the or she tax administrator deems it necessary to ensure compliance with this chapter, may require any operator or transient lodging intermediary to deposit with the tax administrator such security in the form of cash, bond, or other security as the tax administrator may determine. The amount of the security shall be fixed by the tax administrator but shall not be greater than twice the operator’s or transient lodging intermediary’s estimated average monthly liability for the period for which the operator or transient lodging intermediary she files returns, determined in such manner as the tax administrator deems proper, or $5,000, whichever amount is lesser. The amount of the security may be increased or decreased by the tax administrator subject to the limitations herein provided. 2. At any time within three years after any tax or any amount of tax required to be collected becomes due and payable or at any time within three years after any determination becomes final, the tax administrator may bring an action in the courts of this state, or any other state, or of the United States in the name of the City to collect the amount delinquent together with penalties and interest. 24.02.150 Administration – General. 1. Every operator and transient lodging intermediary shall keep guest records of room sales and accounting books and records of the room sales. All records shall be retained by the operator or transient lodging intermediary for a period of three years and six months after they come into being. 2. The tax administrator, or any person authorized in writing by the tax administrator, may examine during normal business hours, the books, papers and accounting records relating to room sales of any operator or transient lodging intermediary, after notification to the operator or transient lodging intermediary and may investigate the business of the operator or transient lodging intermediary and the records of the location(s) of the transient lodging in order to verify the accuracy of any return made, or if no return is made by the operator or transient lodging intermediary, to ascertain and determine the amount required to be paid. _________________________________ Page 13 – Attachment 1 to Council Report Ord. 2836 3. It shall be unlawful for the tax administrator or any person having an administrative or clerical duty under the provisions of this article to make known in any manner whatever the business affairs, operations or information obtained by an investigation of records and equipment of any persons required to obtain a Transient Occupancy Registration Certificate, or pay a transient occupancy tax, or any other persons visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or to permit any statement or application, or copy of either, or any book containing any abstract or particulars thereof to be seen or examined by any person; provided that nothing in this subsection shall be construed to prevent: a. The disclosure to, or the examination of records and equipment to another City or State official, employee or agent for collection of taxes for the sole purposes of administrating or enforcing any provision of this article, or collecting taxes imposed hereunder. b. The disclosure, after the filing of a written request to that effect, to the taxpayer, receivers, trustees, executors, administrator, assignees, and guarantors, if directly interested, of information as to any paid tax, any unpaid tax or amount of tax required to be collected, or interest and penalties; further provided, however, that the City Attorney approves each such disclosure and that the tax administrator may refuse to make any disclosure referred to in this subsection when in his or herthe City Attorney’s opinion the public interest would suffer thereby. c. The disclosure of the names and addresses of any persons to whom Transient Occupancy Registration Certificates have been issued. d. The disclosure of general statistics regarding taxes collected or transient lodging business done in the City. 4. The tax administrator shall place all tax revenues into the general fund of the City. Such revenues shall be allocated for expenditures pursuant to State Local Budget Law. 24.02.160 Administration – Appeal to Council. Any person aggrieved by a final decision of the tax administrator may appeal to the City Council by filing a notice of appeal with the City Recorder within 10 days of the serving or the mailing of the notice of the decision given by the tax administrator. The tax administrator shall submit the file of said appealed matter to the Mayor who shall fix a time and place for hearing the appeal from the decision of the tax administrator. The Mayor shall give the appellant not less than 10 days written notice of the time and place of the hearing. 24.02.170 Violations. Any operator, transient lodging intermediary or other person who shall fail or refuse to register as required herein, or who shall fail or refuse to furnish a return, supplemental return or other data required herein or by the tax administrator, or, with intent to defeat or evade the _________________________________ Page 14 – Attachment 1 to Council Report Ord. 2836 determination of any amount due hereunder, shall make, render, sign or verify any false or fraudulent report, commits an offense which constitutes a violation of this article, punishable upon conviction as a violation pursuant to LOC 13.02.020.