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13200-13208 Ordinance Enactment Considerations: General Information

13200. BACKGROUND
Each county board enacts an ordinance to set the requirements for reporting, remitting, rates, appeals, refunds, and collections. Most ordinances also include definitions to better define levy and exemptions in state law. The following sections are not required; they are only suggestions and information. However, the elements outlined in these sections are usually addressed in most ordinances.

13201. DEFINITIONS
The definitions outlined in M-13202 - M-13208 may be useful in an ordinance to clarify whether a party is liable for TOT. The broadest definitions should be used so as not to exclude a business subject to the tax.

13202. PERSON
Any person who rents lodging for a period of 30 days or less is subject to TOT. "Person" includes any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any grouping acting as a unit, with the exception of the United States of America, the State of California, and any political subdivision of either upon which the city, county, or city and county is without power to impose TOT. Thus, a person is exempt from TOT if the lodging is required in the course of official business on behalf of the state or the federal government or any of its political subdivisions.

Whenever the term "person" is used in any clause in this ordinance imposing either a tax, liability, or a penalty for failure to perform any act mandated by this ordinance, such term shall include any natural person who as an individual or with a spouse owns 50 percent or more of the capital stock of a corporation obligated to file returns and pay tax as an "operator" pursuant to this ordinance and, in addition, is a person with the power to control the fiscal decision-making process by which the corporation allocates funds to creditors in preference to its tax obligations under the provisions of this ordinance.

A "person" as defined herein, who is also an officer of a corporation obligated to file returns and pay tax as an "operator" pursuant to this ordinance, shall be presumed to be a person with the power to control said corporate operator's fiscal decision-making processes.

13203. HOTEL
A hotel is any structure or portion of a structure that is occupied by, or intended or designed for occupancy by, transients for dwelling, lodging, or sleeping purposes. It includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobilehome or house trailer at a fixed location, or other similar structure or portion thereof.

NOTE: The above definition was successfully defended by a county counsel at a board hearing to determine liability for tax. A business claimed it was not subject to TOT because the type of modular housing it rented to transients was not specifically listed in the definition. Counsel's response was that the definition was not intended to specifically list every type of hotel and that the type of housing claimed was not exempted anywhere in the ordinance. The taxpayer had in-house counsel and the tax liability of $40,000 would have been worth a superior court case; however, the taxpayer paid the tax rather than fight the board hearing decision.

13204. HOTEL EXEMPTIONS
The following are not considered hotels and thus are exempt from TOT:

1) Any hospital, convalescent home, sanitarium, medical clinic, rest home, home for aged people, foster home, or similar facility operated for the care or treatment of human beings.

2) Any asylum, jail, prison, orphanage, or other facility in which human beings are detained and housed under legal restraint.

3) Any housing owned or controlled by an educational institution and used exclusively to house students, faculty or employees, and any fraternity or sorority house or similar facility occupied exclusively by students and employees of such educational institutions and officially recognized or approved by it.

4) Any housing operated or used exclusively for religious, charitable, or educational purposes by any organization having qualifications for exemption for property taxes under the laws of California.

5) Any housing owned by a governmental agency and used for governmental purposes or to house its employees.

6) Any camp defined in the Labor Code or other housing furnished by an employer exclusively for employees.

7) Any camp defined in the Insurance Code, whether for profit or not, offering recreation activities and operated exclusively for minors.

NOTE: The above exemptions should be considered in addition to the exemptions allowed by state law for timeshares and campgrounds.

13205. OCCUPANCY
Occupancy means any use or possession, or right to the use or possession, of any room, rooms, or portion thereof, in any hotel for dwelling, lodging, or sleeping purposes.

13206. TRANSIENT
A transient is 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 30 consecutive calendar days or less, counting portions of calendar days as full days.

13207. RENT
Rent is any consideration charged, whether or not received, for the occupancy of hotel space 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.

13208. OPERATOR
An operator is any person who is the proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, or mortgagee in possession, licensee, or any other capacity. Where the operator performs functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator and shall have the same duties and liabilities as his/her principal.