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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Tulare County Grand Jury • 2009-2010

Tax Revenues Lost? Transient Occupancy Tax

15 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Note: Missing finding numbers detected: F2, F3, F4, F6

Findings 5 findings

Currently, there is an ordinance in misleading. place that authorizes the County to levy and collect TOT on hundreds of

Some verbiage used in the Tulare private homes, town homes, County TOT ordinance is open for condominiums, cabins and rooms in interpretation leaving the opportunity private homes3, which are rented, to for Owner/Agents of person(s) or groups4 for 30 accommodations for rent to evade consecutive days or less. collecting the TOT and paying it to the County. See the California Revenue and Taxation Code 7280 at the end of this report. 6. The August 2008 revision of the TOT 2 See the Tulare County Transient Occupancy Tax ordinance still has at least three (TOT) ordinance § 1-05-1345 through 1445 at the areas of ambiguity. end of this report. Tulare County TOT ordinance 1-05-1355 (b) 4 Tulare County TOT ordinance 1-05-1355 (a) 23 × TULARE COUNTY GRAND JURY REPORT 2009-2010 a. The ordinance fails to define 12. On October 27, 2009, the County Tax clearly, which types of rental Collector advised the BOS that a draft accommodations are subject to of a revised TOT ordinance would be being taxed under the ordinance. before the BOS in January 2010. b. The ordinance fails to define clearly, what constitutes a day. CONCLUSIONS c. The ordinance fails to address partial day rental. It is the opinion of the Grand Jury that the ambiguity of the Tulare County TOT

Vagueness in the County’s TOT ordinance caused not only the loss stated ordinance has resulted in a lack of in finding number eleven (11) but other accountability of some Owner/Agents TOT losses as well. The Grand Jury also who rent lodgings for 30 days or less believes that in at least one incident the causing the County to incur a loss of Owner/Agent absolutely did owe the TOT tax revenue. applied by the County Tax Collector. If we are going to live by the “letter of the law”

Presently, the County Tax Collector and not necessarily by its intent, the utilizes a contracted investigator to ordinance writers need to better align the locate Owner/Agents who do not verbiage of the law and the goal. comply with the current TOT ordinance. This investigator has The County will continue to have difficulty brought about the recovery of enforcing the TOT until changes are made $34,622.66 in TOT plus fees and in the language of the ordinance. The penalties from delinquent County will also continue having Owner/Agents. difficulties until all staff in all concerned agencies are briefed on the ordinance and

When it is discovered that lodgings its language. for rent do not comply with the TOT ordinance, the County Tax Collector

Recommendations 4

R1
Page 28

Rewrite the TOT ordinance to the Owner/Agent is required to pay. eliminate any possibility of ambiguity or confusion
R2
Page 28

Register and inspect all properties it was changed. Follow up on staff that are subject to the TOT ordinance. briefings at a minimum of every three years and/or as changes are made to the ordinance. e. Refer all questions regarding the TOT from any agency and/or the public to the County Tax Collector.
R10
Page 28

If the Owner/Agent disagrees with i.e. “occasionally and incidentally”5 on the the County Tax Collector, the part of the Owner/Agent (proprietor Owner/Agent may appeal to the BOS. /taxpayer) before the end of the fiscal year 2009 -2010.
R11
Page 28

In the last few months, there have a. Impose the TOT on any rental that been at least two appeals to the BOS. is less than 30 consecutive days The BOS upheld both of these to the same renter for the same appeals (one fully and one in part), property. resulting in the loss of tax revenue to the County of approximately $9,000 b. Clarify what constitutes a full day due to the vagueness of the TOT and what the obligation is for any ordinance. partial day use. Tulare County TOT § 1-05-1355 (b). Ø 24 TULARE COUNTY GRAND JURY REPORT 2009-2010 c. Put in place fines and penalties in f. Inform as many Owner/Agents as an amount that will discourage possible on the TOT ordinance and non-compliance with the the changes made to the ordinance. ordinance. g. Print a public notice in all available d. Once the new ordinance is in news sources regarding TOT place and enforceable, brief all changes. staff in all concerned agencies on the new language and the reason