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City Adopts Transient Occupancy Tax Ordinance

Published on Wednesday, September 21, 2022 | 6:29 am

The City Council adopted an ordinance that enhances the City’s ability to collect unpaid Transient Occupancy Tax (TOT) and Tourism Business Improvement District (TBID) monies.

TOT is paid by everyone who stays at a local hotel. Hotel operators are compelled by City law to collect a TOT and Tourism Business Improvement District (TBID) assessments from guests, and those funds “shall be held in trust for the account of the City until payment is made to the tax administrator.”

TOT funds are scheduled to be turned over on or before the 20th day of the month. The money goes into the City’s general fund.

The ordinance amends the TOT Ordinance and the TBID Ordinance and allows the City to file a certificate of lien for outstanding TOT or TBID, providing that the final City decision confers lienholder rights, without the need to litigate the issue.

The ordinance also allows the enforcement by warrant, seizure and sale of hotel property, imposition of TOT and TBID liability on successor owners consistent with state law, imposition of attorney’s fees and costs where the City brings an action to recover unpaid TOT and TBID, and add criminal and civil penalties in addition to TOT and TBID penalties and interest already allowed. 

In the summer, the City received $497,000 to resolve its claims in the bankruptcy of Urban Commons Cordova A, LLC, one of the former operators of the Sheraton Pasadena Hotel.  

Urban Commons took hundreds of thousands of dollars in transient occupancy tax and tourism business improvement district assessment monies, without turning the monies over to the City monthly, as required by law.

According to the lawsuit, “all or some of the monies owed under the TOT and TBID ordinances were used in the purchase, improvement and repair of the Hotel and other properties and assets owned and/or operated by one or more (defendant).”

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