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2004-1364-Minutes for Meeting October 20,2004 Recorded 11/18/2004COUNTY OFFICIAL TES /NANCYUBLANKENSHIP, COUNTY CLERKDS �J 2�Q4'�riU4 COMMISSIONERS' JOURNAL 11/18/2004 04;04;26 PM 11111111111)1111111111111111111 2014 DESCHUTES COUNTY CLERK CERTIFICATE PAGE L C -CES n This page must be included if document is re-recorded. Do Not remove from original document. Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1947 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.orp, MINUTES OF MEETING BOARD OF COMMISSIONERS AND REPRESENTATIVES OF THE LODGING INDUSTRY REGARDING PROPOSED CHANGES TO THE DESCHUTES COUNTY TRANSIENT ROOM TAX ORDINANCE WEDNESDAY, OCTOBER 20, 2004 Present were Commissioners Tom De Wolf, Michael M. Daly and Dennis R. Luke. Also present were Mike Maier, County Administrator; Marty Wynne and Cheryl Circle, Finance Department; Jeff Colburn of Eagle Crest, Scott Pence of Sunset Realty, Tom Keith of Sunriver, and Loy Helmly of Black Butte Ranch. No representatives of the media or other citizens were in attendance. Commissioner Michael Daly opened the meeting at 9:05 a.m. The purpose of the meeting was to take additional testimony from resort operators and property managers regarding proposed changes to the Deschutes County transient room tax ordinance. Jeff Colburn suggested that the group use Tom's (Luersen, of Sunriver) memo as a starting point. (A copy of the document is attached as Exhibit B.) Commissioner Mike Daly stated that he went through the document and highlighted one point, where it says "If a service is not available to purchase separately, thereby making it non -optional, it could be subject to tax. This is a modest change in what the County has proposed." He asked for clarification. Mr. Colburn replied that basically it says they shouldn't have to pay tax when they put a ski or golf package together, and part of it is for the room and part is for skiing or golf. They should pay on the room, not on the skiing or golf. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 1 of 10 Pages Commissioner Daly quoted that it says, "It does not seem logical or practical for transient tax to be collected on non -room rated services that can be bundled or purchased separately by the guest." He said he didn't think they have a problem with that. Commissioner Tom DeWolf said that when he recently stayed at a very nice resort in Arizona, there was an incidental services fee of $12 to cover access to the weight room, sauna and other amenities. It was a non -optional fee. The room tax was also charged against that, and the hotel didn't break out whether he used any of those services. But that was one hotel in one place, and this might not be the case in other locations. Scott Pence stated that he believes this issue more specifically deals with packages rather than, for example, recreation fees or cleaning fees. Commissioner DeWolf said that he focused on Mr. Luersen's comments regarding spa usage and continental breakfasts, which became an issue. Mr. Pence reiterated that the issue is community infrastructure things like the pools, tennis courts, bike paths and others. Then skiing, golfing, snowmobile tours and other items come in and that's when it gets tricky. Mike Maier asked how they could fairly put a value on the room. Marty Wynne explained that if the normal daily rate is $100, and someone stays for three nights, and they are coming in on a golf package and are paying a total of $4001 the County would expect 7% on the normal room rate. Loy Helmly stated that the difficulty with that scenario is that the resort often has to take a cut in the room price if the purchase is bundled. They may only get $75 per day for the room. The discount has to be divided equally with the other activities. Otherwise the labor, maintenance and other costs get skewed. Commissioner DeWolf asked if that means that if someone is playing golf, if the cost is $140 for the package, both are cut. Mr. Helmly replied that this is a marketing gesture to try to attract customers. Both take a little less for the room and the golf. He said he would argue against charging room tax against the customary or normal room rate for this reason. He said at the present time they pay tax on the actual amount, not the "normal" amount. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 2 of 10 Pages Commissioner Luke asked what would keep the operator from taking the total discount off the room and not some from the golf. Mr. Helmly replied that it can't all be taken off the room, as they have to report to their property owners and they wouldn't accept this. Mr. Pence said that it all goes back to his clients, the property owners, in his case. He can make arrangements for various services but has no ability to put together packages. Because most of the product he handles isn't owned by his company, the clients dictate the rate. Commissioner Luke pointed out that Tom Luersen and Keith Colburn can dictate this. Tom Keith explained that many of their properties are owned by others. There are revenue centers to have the revenue distributed fairly. Sometimes the golf is discounted to a greater degree and most goes towards the room. Mr. Colburn said that they have the same scenario; both are discounted, but the golf is discounted more. Mr. Luke stated that each major resort operates differently, but the County is trying to get to a consistent tax. Because of the differences, it is difficult but the group needs to get there. A lot of time has been spent discussing this issue, and it is time to come to a resolution and move on. Mr. Colburn said that the State is fairly clear on what is needed. Internally the resorts need to figure out who is paying what as well. They need to follow the State mandate. He added that Tom Luersen's letter explains the differences between the State and County in this regard. Marty Wynne asked how the State would handle the scenario of the three nights at $100, with golf; would the room be discounted to $75. Mr. Colburn replied that the rack rate may be $110, but they hold a "special". However, it is hard to determine what the rack rate is. Mr. Keith added that there could be all kinds of rates, depending on the number of vacancies, the time of the year, and so on. At Commissioner Daly's request, Marty Wynne wrote on a white board what is proposed by the resort operators versus what the County is proposing. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 3 of 10 Pages Mr. Pence said the 70/30 rule would allow the 30% back to the industry. Commissioner Daly stated that taxes would have to be raised to trigger this. Mr. Pence said that he feels if different components begin to be taxed, that's a new tax. Commissioner Luke observed that the County could argue that they should have been taxed all along. Mr. Colburn noted that the State found that rental houses were excluded from the process and are working on this to clarify it. Mike Maier asked how cleaning fees and recreation fees are handled. Mr. Pence said that recreation fees are exempt. The industry feels that cleaning fees should be exempt, and found that no one is taxing the cleaning fees. State law indicates they should be paying tax on it, however. Mike Maier asked about a pool use fee or a recreation fee. Mr. Pence said these are not taxed at this time. Commissioner DeWolf asked about the disadvantage if someone allocates more towards the room cost. Commissioner Luke said that they don't pay it anyway. Mr. Helmly explained that if the regular rate is $100 and they only collect $70, the County wants tax paid on the $100. Or, if demand is low, the County could tax on something that wasn't even collected. Mike Maier emphasized that the County only wants tax paid on what they are actually collecting. Mr. Pence said that then the allocated rate should be used, not the rack rate. Commissioner DeWolf noted that different operators are going to allocate differently. Mr. Keith said that some locations will be in higher demand, and they bundle items to create value. Commissioner Daly asked why this came to the attention of the County. Mr. Wynne said that the quick answer is because of inconsistencies. In regard to cleaning fees, at the Sunriver Lodge this is built into the fee; however, a home may have a separate cleaning fee. There are different types of methodology used by the various groups. Commissioner Daly noted that the County is striving to have everyone on a level playing field. If there is an audit, it can be clearly determined if they are following the ordinance. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 4 of 10 Pages Scott Pence then referred to the Oregon Lodging Association position paper dated October 19, 2004. (A copy is attached as Exhibit C.) Mr. Wynne said that using the regular rate — or, instead, the allocated rate — if it is understandable and consistent, that achieves the goal. Marty: using regular rate, i.e. allocated rate, if understandable and consistent that achieves our goal. It is an honor system anyway since rates change all the time. Mr. Maier asked if the allocation of the room amount in a package could be limited. Mr. Colburn stated that sometimes the rent portion is very low. Mr. Helmly added that instead of "consistent", "reasonable" might be a better word to use. Mr. Colburn said that the group should perhaps leave the 70/30 issue off the table at this time, and go on to page 2 of the Oregon Lodging Association document in regard to the definition of rent. Mr. Keith added that comp rooms should not be taxed. Mr. Helmly stated that this situation is not unusual; the same situation exists when the owner stays in a unit. Mr. Wynne said that tax isn't being paid on these rooms now anyway. Mr. Helmly stated that sometimes they make mistakes and don't charge at all for these rooms. Mr. Colburn then went to the second page of the document, regarding timeshares. Commissioner DeWolf said he has a timeshare in Maui, and knows up front that the cleaning crew will come in once mid -week to clean. If the occupants want this service more often, they know they have to pay for it. Mr. Colburn explained that they have to split revenue with the owners. The renter pays the cleaning fee separately, and it isn't bundled into the rate. However, hotels bundle cleaning services. Mr. Pence said that tax should be paid on the cleaning fees. If it is an optional decision, such as a timeshare unit, that's different. He added that the fee often doesn't really cover the cost of the service anyway. Mr. Wynne stated that if it is not optional, tax should be paid. Mr. Pence reiterated that there is usually some kind of split with the owners. Commissioner Luke said that the ordinance can address this. Mr. Pence stated that the cleaning fee can be projected in most cases. He noted that the second to the last paragraph of the document should be excluded. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 5 of 10 Pages Commissioner Daly asked if there is a fee charged when someone brings a pet with them. Mr. Keith said that they charge a small fee. Mr. Pence stated that they instituted the fee this year of about $10 to $15 per night; however, most places don't allow pets. Mr. Helmly said that this fee is kept separate, and the owner isn't receiving it. Extra effort and deep cleaning is required if pets are kept in the rooms. Mr. Wynne noted that this is a good example of one of the problems — each resort handles it differently. He suggested that this fee be taxed as it is not optional. Commissioner DeWolf then asked about the issue of meals. Mr. Helmly said they don't tax the golf or food portion of a package. Commissioner Daly noted that they would pay tax for cleaning if a pet stays in the unit, but not transportation to the airport or meals. Mr. Wynne said that recreation fees such as the use of spas, the exercise room, tennis courts and bike paths are not optional and should be taxed. Mr. Helmly explained that their portion goes to the homeowners' association to pay for resurfacing the courts and paving the bike paths. The State doesn't tax this. Mr. Wynne said that the County will lose money if the recreation fees aren't taxed. Mr. Pence emphasized that the County would not lose money. (He distributed a document for the Commissioners to review, but took it back as it was a private document having to do with his company's finances.) Mr. Wynne asked what would prevent resorts from going to a different fee, and a reduced room rate. Commissioner Luke asked how this could be audited. Mr. Wynne noted that some resorts have these items built into their rate. Commissioner DeWolf stated that this doesn't matter to him; he just wants to see a fair way to tax the businesses. Mr. Pence reiterated that the State says this is not subject to tax. If it is all taxed by the County, the County will net an additional $20,000 from his company. Mr. Wynne suggested that instead of building it in, they might want to back it out and not pay tax on that portion. Mr. Pence said that he would then lose money, but the bigger companies would begin to pay more. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 6 of 10 Pages Commissioner Luke stated that the County just wants to see this handled fairly. He asked if it was unreasonable to ask at the beginning of the year to receive a percentage of the expected fee; and, if it is felt it is unreasonable, to begin to discuss it right away. Commissioner DeWolf added that the County could be advised at the first of the year if a change is warranted. He added that Pronghorn Resort isn't in yet, but they could back out a large amount and show less for room tax purposes. Mr. Pence said that the operators could start with a small percentage and see how it works out. Mr. Wynne stated that perhaps up to 5% could work. Commissioner Daly asked why they would use the 5% figure; Mr. Wynne replied that this would keep it revenue neutral. Commissioner Luke then noted that it appeared they are down to deciding on the recreation fee. Mr. Keith noted that this is about a "wash" for him. Mr. Pence indicated that he would make a little. Mr. Wynne stated that what is included in recreation fees could be different for each resort. Mr. Helmly said that recreation fees are not consistent year-round. Commissioner Luke said that if it is a wash, between the 5% and the cleaning fee, he's willing to take a look at not taxing the recreation fee. But he wants to see something in the ordinance that once a year the operators will submit the recreational fee estimate. Mr. Wynne stated that he didn't think it would make that much difference; the impact would be a total of less than $50,000. Commissioner DeWolf noted that it still wouldn't be a consistent application of the recreation fee since they are all different. Mike Maier suggested that the operators work with Mr. Wynne and share their information in this regard. Mr. Keith said that some companies roll the fees into their rate, and regain it in the cleaning fee. Mr. Helmly asked if things should be left the way they are right now. Mr. Luke asked if it is unreasonable to report once a year if there is going to be a change in the recreation fee structure. The County doesn't have the authority to tell them they can't do that, but if it becomes abused they will look at the ordinance again. Mr. Wynne added that they do random audits, once about every five years for the bigger groups. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 7 of 10 Pages Commissioner Luke said that this could result in a net loss of revenue for the County. Commissioner DeWolf stated that this would happen only if they raise the recreation fee and take it off the rent amount. Commissioner Luke noted that this is difficult to do if you are representing private owners. But the resorts could do it, including Pronghorn. The County is remapping destination resort areas right now, and there could be more resorts in the future. Mr. Keith said that he wants the ability to include more, and the consumer and owners will have some say in this. Commissioner Daly asked if the group is comfortable going in this direction. Mr. Wynne said that what he'd like to see is a level playing field. There should be a notification process to explain it to all of the owners and operators. He also said that a provision needs to be included that if the operator intends to make changes, the County will be notified. In that manner the County won't have to administer it. Mr. Keith said that there will likely be changes every year. Commissioner Daly suggested that a baseline should be established now. Mr. Wynne agreed, since it is not documented at this point. Commissioner Luke added that he is okay with this scenario as long as it is consistent. Commissioner DeWolf noted that a continental breakfast would be taxed, but a dinner package would not. Commissioner Daly replied that they are not breaking it out now anyway. Mr. Wynne stated that overall it would probably be a wash. The 70/30 provision would not apply. Commissioner DeWolf pointed out the federal government provision. Cheryl Circle noted that there could be some IRS provision making this wording necessary; she will follow up with Legal Counsel on this item. Mr. Wynne pointed out that it only applies when the check comes from the federal agency. Commissioner Luke suggested that the County adopt the position of the Oregon Lodging Association as specified in their document. Mr. Keith said that if someone is exempt at the State level, they want to see the same thing at the County level for consistency. Mr. Wynne agreed; not much money is involved, and the County should be consistent with the State in this regard. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 8 of 10 Pages Commissioner Luke referred to the situation experienced by Laura Harvey, in that she is unable to rent out houses. Mr. Pence said that some are located in Deschutes River Recreation Homesites, and someone tried to make a case that maybe it's not legal for her to rent them out. Commissioner DeWolf said that in regard to hostels and bed & breakfast facilities, this wouldn't be a new collection. Mr. Keith said that the 70/30 provision is complicated, but it would be nice to identify COVA (Central Oregon Visitors Association) as a tourist entity in the ordinance. Commissioner DeWolf said that someone could start his or her own tourism group and ask for a piece of the funding. Commissioner Luke said he would discuss this with Legal Counsel. Mr. Pence reiterated that they would pay on cleaning fees and extra cleaning fees if there are pets, but not on comp rooms, and 5% would come back for operations. Mr. Wynne added that there needs to be a provision for notification, and the Oregon Lodging Association allocation provision would be supported. Commissioner Luke noted that these are not new taxes, so the 70/30 rule would not kick in. Mr. Keith said that he agrees for the most part. At this time the group discussed setting an effective date. Commissioner Luke suggested the first of March, which is the end of the ski season and before the busy summer season. Mr. Keith said they already have a lot of bookings in place for 2005, so this would require retroactive work. Commissioner Luke noted that this should have been taken care of two years ago, and he doesn't want to see it go out that far. He asked that the ordinance be prepared before December for the Board and others to review, with adoption to occur by the end of the year. Marty Wynne suggested that an effective date be April 15, 2005. The group concurred. Being no further discussions on this issue, the meeting was adjourned at 10:50 a.m. Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 9 of 10 Pages DATED this 201h Day of October 2004 for the Deschutes County Board of Commissioners. ATTEST: Recording Secretary Tom DeWolf, Commissioner Attachments Exhibit A: Sign -in sheet (1 page) Exhibit B: E-mail from Tom Luersen of Sunriver Resort, dated October 16, 2004 (2 pages) Exhibit C: Position Paper from Oregon Lodging Association, dated October 19, 2004 (4 pages) Exhibit D: Summary of proposed revisions to ordinance, dated August 25, 2004 (2 pages) Exhibit E: Draft of revised ordinance (12 pages) Minutes of Meeting — Proposed Changes to Transient Room Tax Ordinance Wednesday, October 20, 2004 Page 10 of 10 Pages � O C 0 1 CD L 4) 2 X. E °o E z _ J ,� J a c a) � �, 2 u r Exhibit Page k of Message Mike Daly From: Mike Dugan Sent: Monday, October 18, 2004 10:02 AM To: Mike Daly Subject: FW: Transient Room Tax Meeting I think this was for you. Page 1 of 2 Mike Dugan -----Original Message ----- From: Luersen, Tom [mailto:tluersen@sunriver-resort.com] Sent: Saturday, October 16, 2004 10:15 AM To: Bonnie Baker; 'larry@discoversunriver.com'; 'jeffc@eagle-crest.com'; 'Ihelmly@blackbutteranch.com'; 'scottp@sr-sunset.com'; Keith, Tom; Morris, Scott Cc: 'Scott West'; 'Karen Mainzer'; Dennis Luke; Tom DeWolf; Mike Dugan; 'mwynne@co.deschutes.or.us'; 'mamberg@co.deschutes.or.us'; 'ccircle@co.deschutes.or.us'; 'alana@visitcentraloregon.com'; Devine, Nancy Subject: RE: Transient Room Tax Meeting To All Included in the meeting scheduled for October 20, 2004 from 9am to 12noon at the County offices: As Bonnie knows, it is unfortunate this meeting is scheduled this week since I can not be there due to a commitment in California made months ago. However, Tom Keith, Director of Finance for Sunriver, and Scott Morris, General Manager of the Resort, will be at the meeting. Our (Sunriver's) position can be narrowed down to the following: -Sunriver desires HB 2267 language regarding transient tax is adopted by Deschutes County. -Sunriver supports that transient tax should be charged to Property Management inventory (private homes, condos, and vacation rentals); we also will assist in the State effort to make this change/correction -It is our position that our industry should agree to transient tax being charged to housekeeping fees of property management -We believe that any change made to the existing County tax code triggers the 5% operator fee language/code -it does not seem logical or practical, for transient tax to be collected on non -room related services that can be bundled or purchased separately by the guest ( golf, spa, food, ski, etc). IF the service is not available to purchase separately, thereby making it non -optional, then it could be subject to tax (this is a modest change to what the county has proposed). -While I personally will steer away from this topic, I do believe the 70/30 rule should be applied once the final decision is implemented. -Regarding resort fees or access fees, it remains Sunriver's position that these fees should not be subject to transient tax as long as a bonafide service is included ( avoiding the customer from purchasing the service a la carte versus bundled.... e.g. Spa and Fitness, transportation, High Speed Internet Fees and Newspaper—these are services a resort fee at Sunriver includes of which all could be bought separately and would have not been subject to transient tax....) I believe the above suggests that'both—the industry representatives and the county'– have shown a strong working relationship and have compromised. The industry has compromised from our first position over 1.5 years ago that Housekeeping fees can be subject to taxation; we support charging transient tax to property management inventory; we have suggested language that states that addresses the non -optional language to be compromised that if the service can be purchased separately at the resort but is elected to be included as a 'bundled or packaged service billed in the form of an access or resort fee' then it would be not be subject.... implying any other fees would be. At the same time, the County has made compromises from their first position as well. I personally believe this is the type of public/private sector collaboration that our county should model and emulate in the future. We all know the importance of tourism to our community and county and recognize the importance transient tax is to the reinvestment of support of tourism as well as other fiscal needs of our county management. Once again, I regret my absence at next week's meeting and trust the above will help to explain my position on behalf of Sunriver Resort Limited Partnership. 10/18/2004 Exhibit VS Page 1 of 2 Message Page 2 of 2 I appreciate the Board of Commissioner's willingness to meet and collaborate a resolution to these issues. It is my hope this that our goal of defining a tax code that allows the county to consistently collect transient tax can be achieved and implemented in the next fiscal year. Thanks Tom Luersen Sunriver Resort Limited Partnership -----Original Message ----- From: Bonnie Baker Sent: Tuesday, September 14, 2004 10:01 AM To: 'larry@discoversunriver.com'; 'jeffc@eagle-crest.com'; 'lhelmly@blackbutteranch.com'; 'tluersen@destinationihotels.com'; 'Scottp@sr-sunset.com' Cc: Mark Amberg; Cheryl L Circle; Marty Wynne Subject: Transient Room Tax Meeting A follow-up meeting regarding proposed changes to the transient room tax ordinance has been scheduled for Wednesday, October 20, 9 to 12, in the Commissioners' downstairs conference room. Please confirm with me whether you will be able to attend. If you need another copy of the proposed changes, please let me know and I'll e-mail it to you. Thanks, Bonnie Baker Executive Secretary Deschutes County Board of Commissioners (541) 388-6572 10/18/2004 Exhibit Page — of 21 oregonlodging 761111 R, I association Issue: Whether proposed changes to the Deschutes County Code with regard to the transient room tax would constitute a new local tax thereby triggering the five percent operator collection reimbursement and the 70/30 split requiring 70% of any new tax revenue to be allocated to tourism activities. Background: Deschutes County discovered through an audit that the collection of transient room taxes was not consistent among the various operators. The County determined that the ordinance language needed to be changed to include exactly what was to be defined as lodging costs and thereby taxed under the ordinance. In the meantime, the state legislature passed a one percent statewide transient room tax. Deschutes County respectfully waited for the state administrative rules defining what was considered lodging costs and what was considered to be outside of the lodging taxes and therefore not taxed. Those state rules have since been adopted. The following is the Oregon Lodging Association's (OLA) analysis of the originally proposed changes to Deschutes County Code (DCC) 4.08 both with respect to the new state statute regarding the allocation of new local transient room taxes and to the newly adopted state administrative rules. Definition of Hotel (DCC 4.08.045) The County proposed adding language to the definition of hotel to read (added language underlined) "...designed for transient occupancy for 30 days or less, for dwelling, lodging, or sleeping purposes and includes, but is not limited to... motel, studio hotel, hostel,... lodging house, bed and breakfast...." This clearly constitutes a local government imposing a new transient lodging tax on or after January 1, 2001 and triggers the five percent collection reimbursement on all transient room tax collections. Particularly since the current language does not have the phrase "but not limited to" before listing what is included as a hotel this would be a new tax base. As a new lodging tax, the 70/30 split is also triggered, therefore, 70% of any revenue generated by applying the tax to hostels and bed and breakfast establishments would have to be allocated for tourism activities as defined in state statute. Position: OLA does not oppose the additional language, however, we believe this triggers the five percent collection reimbursement and the 70/30 split of the tax revenues from hostels and bed and breakfast establishments. 10/19/2004 Oregon Lodging Association Page 1 Position Paper Exhibit C Page of �_ Definition of Rent (DCC 4.08.065) Deschutes County proposed to change the definition of rent from that "consideration charged, whether or not received by the operator, for the occupancy..." to "consideration on the fair rental value, whether or not charged or received by the operator, for the occupancy..." This change results in two concerns. The first is the determination of fair rental value. Where does the authority lie, if it exists at all, to make this determination? The second issue is charging the tax on "comped" and discounted rooms. This is simply not standard practice and punitive to the charitable giving of our lodging members. In contrast to the county proposal, the new state rules regarding the collection of the statewide one percent transient room tax states "the tax applies to rents received for the rental of a dwelling unit..." We believe this is the appropriate definition for rent. Further, should the county proceed with this new definition of rent and collect on "comped" and discounted rooms, this would again constitute an increase in tax collection as the old definition did not tax "comped" rooms and taxed only the amount charged on a discounted room. As a new tax collection, it would therefore trigger the five percent collection reimbursement on all transient room tax collections. As a new lodging tax, the 70/30 requirement is also triggered with 70% of any revenue generated by applying the tax to "comped" rooms and on the difference between the discounted price and the fair rental value having to be allocated to tourism activities as defined in state statute. Position: OLA supports either retaining the current definition of rent or adopting the definition determined by the state rules. Definition of Rent II (DCC 4.08.65) A second change to the definition of rent that the county proposed was to add language as to what charges are to be considered part of rent "...including any cleaning, recreation, or other fee or assessment charged by the operator which is not optional to the person occupying a room or rooms in a hotel... does not include the sale of any optional goods, services..." The current language defines rent as "the consideration ... for the occupancy of space in a hotel valued in money, goods... but does not include the sale of any goods, services and commodities other than the furnishing of rooms..." As with the changes listed above, this new definition of rent would constitute an increase in tax collection as the old definition did not tax anything other than the "furnishing of rooms, accommodations and parking space in mobile home parks or trailer parks." This would trigger the five percent collection reimbursement on all transient room tax collections. As a new lodging tax, the 70/30 requirement is also triggered and 70% of any revenue generated by applying the tax these fees would have to be allocated to tourism activities as defined in state statute. The state rules do apply the tax to "incidental services" which include but are not limited to fees for bringing a pet into the room, maid service, and the provision of toiletries. The tax is not applied to "non -incidental services" which include but are not limited to meals, transportation to the airport, and access to exercise equipment, pools or spas. Position: OLA supports either keeping the current language that does not apply the tax to the fees or adopting the policy as stated in the state rules. We would argue, however, 10/19/2004 Oregon Lodging Association Page 2 Position Paper Exhibit (21 Page of �_ that by adding cleaning fees into the tax structure, this would trigger the five percent collection reimbursement on all transient room tax collections. As a new lodging tax, the 70/30 requirement is triggered with 70% of any revenue generated by applying the tax these fees would have to be allocated to tourism activities as defined in state statute. Definition of Rent Package Plan (DCC 4.08.070) As with the definition of rent, the county proposed adding language to tax the fair rental value whether or not charged by the operator. The same issues that were raised earlier in the changes in definition of rent apply here. Additionally, added language would apply the tax to food/meals if the operator does not offer the space for rent without the food/meal. This does not appear to be a substantial deviation from the current language in this section though it does seem to conflict with current language defining what rent does not include. There is the question whether offering the room without food needs to be available at the time that the customer chose the package or can an operator provide a meal for every room for the summer months but make it optional during the off-season. Does the operator then only tax the room rate for the off-season which would provide the county with a smaller tax base? This added language brings up questions as to other types of rent package plans such as those that include skiing or golf, tickets to a concert or sporting event, and other combinations. Are these to be handled the same way? The. state rules define meals as non -incidental services and are not taxed under the transient room tax. As for packages, the state provides an example in their rules of a all- inclusive resort where the guest pays a fee covering lodgings, meals, horseback riding and use of the tennis courts and pool. The example has the operator reasonably allocating 50% for lodging. This is the amount used to determine the state tax remittance. Position: OLA supports language developed by the state for their administrative rules implementing the statewide one percent tax. The operator can reasonably allocate the cost of the meal, entertainment, etc. and the room rate and pay tax only on the amount allocated to the room rate. Operator -Collection Amount (DCC 4.08.110) The county proposed adding language reiterating their proposed changes to the definition of rent. The language would specifically address the situation where the operator "comps" or provides a discount for a room in which case the "operator shall be liable to County for the room tax for the transiant's fsicl occupancy of the room..." This again constitutes an increase in tax collection as the old definition did not tax "comped" rooms and taxed only the amount charged on a discounted room. This change would therefore trigger the five percent collection reimbursement charge on all transient room tax collections. As a new lodging tax, the 70/30 requirement is also triggered and 70% of any revenue generated by applying the tax to "comped" rooms and on the difference between the discounted price and the fair rental value would have to be allocated to tourism activities as defined in state statute. Position: OLA's position remains the same as described above on DCC 4.08.065. Exemptions (DCC 4.08.130) 10/19/2004 Oregon Lodging Association Page 3 Position Paper Exhibit C Page _&_ of �_ r The county proposed language that would exempt the collection of taxes on rents received from federal employees when the government directly pays the rent. There is additional language exempting collection on any federally chartered organization employee when the rent is paid directly by the organization. Position: The state rules also provide for exempting rents charged directly by an agency of the federal government. OLA supports this exemption but opposes the additional exemption for federally chartered organization employee, as this is inconsistent with the industry standard. Conclusion: OLA genuinely appreciates the Deschutes County Board's willingness to delay any action until the state administrative rules were finalized and adopted. OLA supports either of the overall following positions: 1) Retain the current language in the ordinance and apply the transient lodging tax to only that received for the occupancy of the space but not included the sale of any goods, services, or commodities other than the furnishing of rooms, accommodations and parking space in mobile home parks or trailer parks. 2) Adopt language similar to the state administrative rules that would allow for the collection of transient room tax on hostels and bed and breakfast establishments, as well as on cleaning fees charged by resorts and vacation rentals. This, however, would constitute a new tax and would trigger the five percent collection reimbursement and 70/30 split. OLA's preference is to see transient room taxes applied consistently and, therefore, would prefer that the county adopt language similar to the state administrative rules. Our members encounter considerable difficulties when have to apply multiple jurisdictional rules and definitions on the collection of transient room taxes. OLA does not support the adoption of the state definition of hotel that does not include vacation home rentals and is not advocating for Deschutes County to eliminate language allowing for the application of transient room tax on these homes. 10/19/2004 Oregon Lodging Association Page 4 Position Paper Exhibit C Page X— of 8/25/04 SUMMARY OF PROPOSED REVISIONS TO DESCHUTES COUNTY ROOM TAX ORDINANCE Section Proposed Change 4.08.010 Notices Clarifies how notices may be given (personal delivery or first class mail) and when notice is deemed delivered. 4.08.065 Definition – Clarifies that "rent", for purposes of assessing room Rent tax, includes all charges for occupying a room which are not optional for the hotel guest. Any charges other than charges for providing a room which are optional for the guest do not need to be included in "rent" for assessment of room tax. It will be up to the hotel operator to decide whether to include charges such as cleaning fees, recreation fees or facilities use fees as part of the mandatory (non -optional) charge for the room or to give the guest an option to rent the room without paying those fees. Also clarifies that Deschutes County room tax is not charged on other taxes or assessments of other governmental entities (such as state room tax). Example: A hotel operator charges $100 for a room and the rate includes continental breakfast and use of the hotel's bike paths, swimming pools, tennis courts and spa. If the guest does not have the option of renting the room at a lower rate that does not include these extras, the full $100 is subject to assessment of room tax. If the operator chooses to make these extras available at an additional charge which is optional to the guest - e.g. room charge is $80 and the guest has the option to pay an extra $20 for breakfast and use of the recreation facilities - then only $80 is subject to assessment of room tax. 4.08.070 Definition – For hotels that offer "package" plans (e.g. room Rent Package Plan plus golf for a package rate), clarifies that the amount charged for the package plan above the Exhibit D Page �_ of 2— 4.08.120 4.08.130 regular rate charged by the operator for just room rental is not considered "rent" for assessment of room tax. Example: The basic charge for a room is $100. The hotel offers a package of a room plus two rounds of golf for $125. Only $100 is subject to assessment of room tax. Definition — Clarifies that the owner of a hotel or private Transient residence used as a hotel is not considered a "transient" and is not subject to room tax when the owner occupies the owner's residence or a room in the owner's hotel. Also clarifies that any rental of lodging on a monthly basis or longer is not subject to room tax. Operator — Provides that each operator may retain, as a fee for Collection — collecting room tax, up to five percent (5%) of Procedures — the room tax revenues collected by the operator. Operator Fee Identification Provides that the amounts charged for Deschutes of Deschutes County Transient Room Tax shall be separately County Room stated and identified on all records of Operator Tax andon all invoices and receipts. Exemptions Clarifies that employees of the Federal Government who are on government business and employees of Federally chartered organizations (such as the Red Cross) who are on organization businesses, are exempt from payment of room tax. This is in conformance with IRS regulations. 4.08.150 Returns and Clarifies when returns and payments are due. Payments 4.08.230 Fraud Clarifies penalties for fraud; makes fraud a Class A Violation. 4.08.300 Recordkeeping Clarifies that room tax records must be retained by an operator for a minimum period of three years and six months. Exhibit Page of 2. EXHIBIT A Chapter 4.08. TRANSIENT ROOM 4.08.230. Fraud -Refusal to collect -Evasion. TAX 4.08.240. Operator delay. 4.08.250. Redeterminations. 4.08.010. Short title. 4.08.260. Security for collection of tax. 4.08.015 Notices. 4.08.270. Lien. 4.08.020. Definitions. 4.08.280. Refunds. 4.08.025. Definition -Accrual accounting. 4.08.290. Transient room tax fund. 4.08.030. Definition -Board. 4.08.300. Recordkeeping. 4.08.035. Definition -Cash accounting. 4.08.310. Examination of records. 4.08.040. Definition -County. 4.08.320. Administration -Confidentiality. 4.08.045. Definition -Hotel. 4.08.330. Appeals. 4.08.050. Definition -Occupancy. 4.08.340. Unlawful acts -Penalty. 4.08.055. Definition -Operator. 4.08.060. Definition -Person. 4.08.065. Definition -Rent. 4.08.010. Short title. 4.08.070. Definition -Rent package plan. DCC 4.08 shall be known as the County transient 4.08.075. Definition -Tax. room tax ordinance. 4.08.077. Definition -Site. (Ord. 203-3 § 1, 1975) 4.08.080. Definition -Tax Administrator. 4.08.085. Definition -Transient. 4.08.015 Notices. 4.08.090. Tax Imposed. All notices required or permitted to be given 4.08.100. Applicability. under DCC 4.08 may be served personally or 4.08.110. Operator -Collection Amount. by first class mail, postage prepaid, to the 4.08.120. Operator -Collection Procedure; recipient of the notice. If notice is mailed to an Operator Fee. Operator, it will be addressed to the Operator 4.08.125. Personal liability. at the Operator's address as the address 4.08.127. Penalties -Noncompliance with appears in the record of the Tax advertising requirements. Administrator. Operator is required to 4.08.130. Exemptions. provide Tax Administrator with Operator's 4.08.140. Operator -Registration -Form and current address and to provide Tax contents -Execution -Certificate of Administrator with any change of Operator's authority. address. If notice is personally served, it is 4.08.145. Operator -Advertising of hotel deemed served at the time of delivery. If notice rentals -Identification required. is served by mail, it is deemed served (3) days 4.08.150. Returns and payments -Date due. after the date the notice is deposited for 4.08.160. Penalties and mailing with the United States Postal Service. interest -Delinquency. (Ord. 2004-005 § 1, 2004). 4.08.170. Penalties and interest -Continued delinquency. 4.08.020. Definitions. 4.08.180. Penalties and interest -Fraud. For the purposes of DCC 4.08, unless otherwise 4.08.190. Penalties and interest -Assessment apparent from the context, certain words and of interest. phrases used in DCC 4.08 are defined as set forth 4.08.200. Penalties and interest -Penalties in DCC 4.08.0254)85 through DCC 4.08.085. merged with tax. (Ord. 2004-005 § 1, 2004; Ord. 2001-016 § 2, 4.08.210. Penalties and interest -Petition for 2001; Ord. 95-029 § 1, 1995; Ord. 203-3 § 2, waiver. 1975) 4.08.220. Deficiency determination. EXHIBIT A TO ORDINANCE 2004-005;'^^39 1 (07/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & StaffeStaff\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.do Revised on 7/16/2004 Exhibit G Page 1 of 12. EXHIBIT A 4.08.025. Definition -Accrual accounting. "Accrual accounting" means the Operator enters the rent due from a transient on his records when rent is earned whether or not it is paid. (Ord. 203-3 § 2, 1975) 4.08.030. Definition -Board. "Board" means the Germy --Deschutes County Board of County Commissioners. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.035. Definition -Cash accounting. "Cash accounting" means the Operator does not enter the rent due from a transient on his records until rent is paid. (Ord. 2004005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.040. Definition -County. "County" means Deschutes County and is limited to the unincorporated area of the County. (Ord. 203-3 § 2, 1975) 4.08.045. Definition -Hotel. "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, and includes, but is not limited to -any hotel, inn, tourist home, tourist accommodation, condominium, motel, studio hotel, hostel, bachelor hotel, lodging house, bed and breakfast, rooming house, apartment house, public or private dormitory, fraternity, sorority, public or private club, space in mobile home or trailer parks, private home, or similar structure or portions thereof so occupied. (Ord. 2004-005 § 1, 2004; Ord. 93-049 § 1, 1993; Ord. 203-3 § 2, 1975) 4.08.050. Definition -Occupancy and Occupying. "Occupancy" and "Occupying" 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 hotel, or space in a mobile home or trailer park or portion thereof. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.055. Definition -Operator. "Operator" means the person who is proprietor of the hotel in any capacity. Where the Operator performs his functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an Operator for the purposes of DCC 4.08 and shall have the same duties and liabilities as his principal. Compliance with the provisions of DCC 4.08 by either the principal or the managing agent shall be considered to be compliance by both. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.060. Definition -Person. "Person" means any individual, firm, partnership, joint venture, association, social club, fraternal organization, fraternity, sorority, 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. (Ord. 203-3 § 2, 1975) 4.08.065. Definition -Rent. 'Rent' means the full consideration eharged; whether of-itet-charged, whether or not received by the Operator, for the occupancy of space in a hotel valued in money„— or goods, labor, credits, property or other consideration valued in money, without any deduction. Rent includes all fees, charges and assessments charged or assessed by Operator, the payment for which is not optional to the person occupying a room or rooms in a hotel except that rent does not include any taxes, fees or assessments levied by any other governmental entity. butRent does not include the sale of any goods, services, or and commodities or any fees, charges or assessments, other than the famishing of rooms, or accommodations and parking space in mobile home parks or trailer parks, the payment for which is optional to the person occupying a room or rooms in a hotel.. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) EXHIBIT A TO ORDINANCE 2004005; 2902 039 2 (044002-207/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & Staff\Staff Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.do to OFdinanee 2004 005 GhWkw 4.08 7. 20044as Revised on 7/16/2004 Exhibit G Page Of l EXHIBIT A 4.08.070. Definition -Rent package plan. "Rent package plan" means the consideration charged, —whether or not received by the Operator, a arged-for beth feed -and --rent plus food and/or other amenities or activities where a single rate is madecharged for the 4e4a1e€betbthe combination of rent, food and/or other amenities or activities. The full consideration charged for a rent package plan shall be considered rent for determination of transient room tax unless Operator offers the space for rent at one rate with the food and/or other amenities or activities and at another rate without the food and/or other amenities or activities in which case the Operator may exclude from rent, for determination of transient room tax under DCC 4.08, the difference between the two rates.emomtt (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.075. Definition -Tax. "Tax" means either the tax payable by the transient, or the aggregate amount of taxes due from an Operator during the period for which the Operator is required to report leis -collections for the Operator's hotel. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.077. Definition -Site. "Site" means an individual hotel, as defined in DCC 4.08, for which there is a separate real property tax account. An individual site may include more than one unit of separately rentable accommodations. (Ord. 97-073 § 2, 1997) 4.08.080. Definition -Tax Administrator. "Tax Administrator" means the County Finance Officer. (Ord. 97-013 § 1, 1997; Ord. 203-3 § 2, 1975) 4.08.085. Definition -Transient or Occupant. "Transient" or "Occupant" means any individual, except the owner of a hotel or private residence used as a hotel, -who exercises occupancy or is entitled to occupancy in a hotel 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 hotel 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 individual so occupying space in a hotel 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. An owner of a hotel, an owner of a private residence used as a hotel, or 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. (Ord. 2004-005 § 1, 2004; Ord. 203-3 § 2, 1975) 4.08.090. Tax Imposed. For the privilege of occupancy in any hotel, on and after the effective date of the ordinance codified in DCC 4.08, each transient shall pay a tax in the amount of seven percent (7%) of the rent for occupancy of space in a hotel.ehar-ged-by the Operator-. The tax constitutes a debt owed by the transient to the County which is extinguished only by payment to the Operator as agent for the County. The transient shall pay the tax to the Operator of the hotel at the time the rent is paid. The Operator shall enter the tax on Operator's his records when rent is collected if the Operator keeps leis -records on the cash accounting basis and when earned if the Operator keeps bis -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 Operator with each installment. If, for any reason, the tax due is not paid to the Operator of the hotel, the Tax Administrator may require that such tax shall be paid directly to the County. EXHIBIT A TO ORDINANCE 2004-005;;100. 049 3 (0420�7/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & Staff\StaB\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.do Revised on 7/16/2004 Exhibit E PageOf EXHIBIT A (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Res. 87-053 adopted by the people 11/3/87; Ord. passed 3/11/80: Ord. 203-3 § 3, 1975) 4.08.100. Applicability. The tax imposed by this ordinance shall apply only to those hotels located within the unincorporated area of the County. (Ord. 95-029 § 1, 1995; Ord. 203-3 § 4, 1975) 4.08.110. Operator -Collection- Amount. A. Every Operator renting rooms in the County, the occupancy of which is not exempted under the terms of DCC 4.08, shall collect a tax from the-eesupaat transient occupying the room. The tax collected or accrued by the Operator constitutes property of the County in the possession of the Operator, held in trust by such Operator until conveyed to the County in accordance with the provisions stated-inof DCC 4.08. B. In all cases of credit or deferred payment of rent, the payment of tax to the Operator may be deferred until the rent is paid, and the Operator shall not be liable for the tax until credits are paid or deferred payments are made. (Ord. 2004-005 § 1, 2004; Ord. 97-073 § 1, 1997; Ord. 95-029 § 1, 1995; Ord. 203-3 § 5, 1975) 4.08.120. Operator -Collection- Procedure; Operator Fee. A. Each Operator shall collect the tax imposed by DCC 4.08 at the same time as the rent is collected from every transient. B. The amount charged by an Operator for Deschutes County Transient Room Tax shall be separately stated on all records of Operator and on all invoices and receipts rendered by Operator and shall be specifically identified on all Operator records, invoices and receipts as "Deschutes County Room Tax." The amounts listed by an Operator on the Operator's records, invoices and receipts as "Deschutes County Room Tax" shall not include any other taxes, fees, charges or assessments. C. No Operator of a hotel shall advertise that the tax or any part of the tax will be assumed or absorbed by the Operator, 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 DCC 4.08. D. Each Operator may retain, as a collection reimbursement charge, up to five percent (51/o) of all Deschutes County transient room tax revenues collected by Operator. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 6, 1975) 4.08.125. Personal liability. Each person who uses, expends, diverts any tax held in trust, or withholds or authorizes or directs such use, expenditure, diversion, or withholding, shall be personally liable to the County for all taxes so used, expended, diverted, or withheld, plus all penalties and interest accrued or imposed as a result of such action. (Ord. 97-073 § 2, 1997) 4.08.127. Penalties -Noncompliance with advertising requirements. It is en—ffifiae ie a violation for any Operator who places or causes to appear through any medium an advertisement soliciting reservations or rental availability for any location if such advertisement does not include the certificate of authority number as prescribed in DCC 4.08.140. No Operator shall fail or refuse to furnish information related to the advertising of any location upon request of the Tax Administrator. ViAlg m Af ^^Violation of any provisions of DCC 4.08.127 is a Class A itieaViolation. (Ord. 2004-005 § 1, 2004; Ord. 97-073 § 2, 1997) 4.08.130. Exemptions. No tax imposed under DCC 4.08 shall be imposed upon: MUM A TO ORDINANCE 2004-005; ^^^�39 4 (04/ 07/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & StafMtathMike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004_do Revised on 7/16/2004 Exhibit Page Lk of 12 EXHIBIT A A. Any occupant for more than 30 successive calendar days (a per -son who pays fef !edging B. number- of days in sueh menth, shall not be deemedsiext); B. Any occupant whose rent is of a value less than $4.00 per day; C. Any occupant whose rent is paid for a hospital room or to a medical clinic, convalescent home or home for aged people. rn.a 95 029 § i 1995; n«a 93 049 adepte.+ by the p , ple W9/93. n..a 93 nen r i 1993; �..a D. The United States Government when a federal employee is on federal government business and the lodging for the employee is directly paid for by the government or employee with a government -issued check, credit card, purchase order or other form of procurement document. E. Any Federally Chartered organization when an organization employee is on organization business and the lodging for the employee is directly paid for by the organization or employee with an organization -issued check, credit card, purchase order or other form of procurement document. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 93-049 adopted by the people 11/9/93; Ord. 93-020 § 1, 1993; Ord. 203-3 § 7, 1975) 4.08.140. Operator -Registration -Form and contents -Execution -Certificate of Authority. A. Every person engaging or about to engage in business as an Operator of a hotel in the County shall register within 15 calendar days after commencing business with the Tax Administrator on a form provided by 4iimthe Tax Administrator.— 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. Registrants shall provide the following information: (1) the name under which an Operator transacts or intends to transact business; (2) the office address of his place or places of business; (3) a residence address, if no business address exists; (4) the address of each site operated or to be operated by registrant which is subject to DCC 4.08; and (5) and such other information to facilitate the collection of the tax as the Tan Administrator may require. The registration form shall provide for submission of the information required by DCC 4.08.140;, shall set forth in full the requirements imposed by DCC 4.08 regulating an Operator's advertisement of hotel accommodations;, and shall be signed by the Operator. C. The Tax Administrator shall, within ten (10) days after registration, issue without charge from the occupant, together with a duplicate thereof for each additional place of business for each registrant, a certificate of authority. 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. D. The certificate shall, among other things, state the following: 1. The name of the Operator; 2. The physical address of the hotel; 3. The date upon which the certificate was issued; 4. The Deschutes County Certificate of Authority (DCCA) number, as assigned by the Tax Administrator; and 5. This Transient Occupancy Registration Certificate signifies that the person EXIIIBIT A TO ORDINANCE 2004-005; ''^^9- 5 (044002207/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & StaffSta$\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08 -7-2004.d Revised on 7/16/2004 Exhibit E Page 5 0f 1 W1:ii:7Mo". named on the face hereof has fulfilled the requirements of the Transient Room Tax Ordinance of the County of Deschutes by registration with the Tax Administrator for the purpose of collecting from transients the room tax imposed by said County and remitting said tax to the Tax Administrator. (Ord. 2004-005 § 1, 2004; Ord. 97-073 § 1, 1997; Ord. 95-029 § 1, 1995; Ord. 203-3 § 8, 1975) 4.08.145. Operator -Advertising of hotel rentals -Identification required. Every Operator, in placing advertisements soliciting business for any location represented by that Operator, must include the certificate of authority (DCCA) number. For purposes of DCC 4.08, advertisement includes any print, electronic, or audio media, including, but not limited to, advertisements appearing in newspapers, magazines, newsletters, flyers, internet sites, or any other advertising medium, regardless of origin, distribution method, or distribution location of such medium. Such identification shall appear as "DCCA #" followed by the certificate number assigned by the Tax Administrator for that location, shall appear in a readable size and font, if applicable, and shall be placed in such location that it is readily noticed as a part of the advertisement. This advertising requirement does not apply to Operators whose certificate of authority is assigned to only one physical location, and that location provides six or more rooms or individual units available for transient occupancy. (Ord. 97-073 § 2, 1997) 4.08.150. Returns and payments -Date due. A. by the 4aitsient to the ator-at-gie-time rator afe due and payable—te the Tax Admiristrator menddy basis en the 1 Sth day ef the men for- the preeeding month; and are delinquent AM; Vhe_ 1 -6th day of the faeath in whieh c4ey am due. The tax imposed by DCC 4.08 shall be paid by the transient to the Operator at the time that rent is paid. All amounts of such taxes collected by an Operator, or for which the tax is otherwise owed by Operator to County, are due and payable to the Tax Administrator on a monthly basis by no later than the 15th day of the month following the month in which the tax is collected by the Operator or is otherwise owed by Operator to County, and are delinquent if not paid to the Tax Administrator by not later than the last day of the month in which such taxes are due and payable to the Tax Administrator. B. On or before the 15th day of the month following each month of collection, every Operator liable for payment of tax shall file a return for the preceding month's tax collections with the Tax Administrator. The return shall be filed in such format or on such forms as the Tax Administrator may prescribe. C. Returns shall show the amount of tax collected or otherwise due for the related period by site. The Tax Administrator may require returns to show any or all of the following: 1. The sites for which rental income was collected during the month, listed by address and the number of separately rentable units per site; 2. Gross receipts of Operator for such prod; 3. The total rentals upon which tax was collected or otherwise due; 4. An explanation in detail of any discrepancy between such amounts; and 5. Any new units added from the previous months or any units deleted from the previous months; and 6. The amount of rents exempt, if any. D. The person required to file the return shall deliver the return; tege4ter the FemittEmee of the ametatt of the -tax -due, -to the Tax Administrator at the his officef of the EXMB1T A TO ORDINANCE 2004-005; 200.2 039 6 (04Qgg2.207/2004) \\ZEUS\Shared\Conmiissioners\Correspondence - Commmissioners & SMERSW Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.doc &\T „ ina \Reo., Tax ne.a •enT [hibi A to Or4inanee 2004 005 Ghapter 4.08 :7 2004.dee Revised on 7/16/2004 Exhibit C Page &_ of 12 EXHIBIT A Tax Administrator, either by personal delivery or by mail. If the return is mailed, the postmark shall be considered the date of delivery for determining delinquencies. E --For good cause, the Tax Administrator may extend best the time for making any return or payment of tax for a period not to exceed one mon p"ew of tw . No further extension shall be granted, except by the Board. Any Operator to whom an extension is granted shall pay interest at the rate of one percent (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 elsewhere in DCC 4.08. (Ord. 2004-005 § 1, 2004; Ord. 97-073 § 1, 1997; Ord. 95-029 § 1, 1995; Ord. 203-3 § 9, 1975) 4.08.160. Penalties and interest -Delinquency. Any Operator who has not been granted an extension of time for remittance of tax due and who fails to remit any tax imposed by DCC 4.08 prior to delinquency shall pay a penalty of 4 -0 -ten percent (10%) of the amount of the tax due in addition to the amount of the tax. (Ord. 2004-005 § 1, 2004); Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(1), 1975) 4.08.170. Penalties and interest -Continued (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(2), 1975) 4.08.180. Penalties and interest -Fraud. If the -Ttax Aadministrator determines that the nonpayment--efnonpayment of any remittance due under DCC 4.08 is due to fraud or intent to evade the provisions thereof, a penalty of twenty- five24 percent (250/6) of the amount of the tax shall be added thereto in addition to the penalties stated in DCC 4.08.160 and DCC 4.08.170. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(3), 1975) 4.08.190. Penalties and interest -Assessment of interest. In addition to the penalties imposed, any Operator who fails to remit the tax imposed by DCC 4.08 shall pay interest at the rate of one-half of one percent per month, or fraction thereof, without proration for portions of a month, on the amount of the tax due, exclusive of penalties, fromef the date on which the remittance first became delinquent until paid. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(4), 1975) 4.08.200. Penalties and interest -Penalties merged with tax. Every penalty imposed and such interest as accrues under the provisions of DCC 4.08.200 shall be merged with and become a part of the tax required in -BC -6-4: to be paid pursuant to DCC 4.08. (Ord. 2004-005 § 1, 2004); Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(5), 1975) delinquency. Any Operator who has not been granted an 4.08.210. Penalties and interest -Petition for extension of time for remittance of tax due, and waiver. who failsed to pay any delinquent remittance on Any Operator who fails to remit the tax levied in or before a r pried -e; thirty (30) days following DCC 4.08 within the time stated in DCC 4.08 the date on which the remittance first became shall pay the penalties stated in DCC 4.08; delinquent shall pay a second delinquency provided, however, the Operator may petition for penalty of fifteen 4 -3 -percent (15%) of the amount waiver or refund of any penalty, or any portion of the tax due plus the amount of the tax and the thereof. If the total penalty due does not exceed 40 -ten percent (10%) penalty first imposed. $10,000, any petition for waiver or refund of penalties shall be directed to and determined by EXHIBIT A TO ORDINANCE 2004-005; M01 019 7 (0420g 7/2004) \\ZEUS\.Shared\Commissioners\Correspondence - Commmissioners & Statl\StaffiNUe Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08 to wee 2004 803 Gh 4.08 7 2004 -7-2004_doc•ear e...J\L':..,.«..e\D....... T Re6risit 1 b 4 ter .doe Revised on 7/16/2004 Exhibit El Page -1 of EXHIBIT A the Tax Administrator. If the total penalty due exceeds $10,000, any petition for waiver or refund of penalties shall be directed to and determined by the Board. Upon receipt of a petition for waiver or refund of penalties as set forth herein, the Tax Administrator or Board may, if a good and sufficient reason is shown, waive or direct a refund of the penalty or any portion thereof. (Ord. 2002-022 § 1, 2002; Ord. 95-029 § 1, 1995; Ord. 203-3 § 10(6), 1975) 4.08.220. Deficiency determination. If the Tax Administrator determines that the rehimany returns--sre is incorrect, hethe Tax mayAdministrator may compute and determine the amount required to be paid upon the basis of the facts contained in the return mor upon the basis of any information within histhe possession of or available to the Tax Administrator. One or more deficiency determinations may be made on 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 provided in DCC 4.08 after which the amount determined is delinquent. Penalties on deficiencies shall be applied as set forth in DCC 4.08.160 through DCC 4.08.210. A. In making a determination, the Tax Administrator may offset overpayments if any, 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 forth in DCC 4.08.160 through DCC 4.08.210. B. The Tax Administrator shall give to the Operator or occupant a written notice of histhe determination made by the Tax Administrator.— The notice may be served personally or by mail; if by mail, the notice shall be addressed to the Operator at histhe Operator's address as it appears in the records of the Tax Administrator. In case of service by mail of any notice required by DCC 4.08 the service is complete at the time of deposit in the United States Post Office. C. Except in the case of fraud or; intent to evade DCC 4.08 or authorized rules and regulations, every deficiency determination shall be made and notice thereof mailed within three years after the last day of the month following the close of the monthly died for which the amount is proposed to be determined or within three years after the return is filed, whichever period expires the later. D. Any determination shall become due and payable immediately upon receipt of notice and shall become final within ten (10) days after the Tax Administrator has given notice thereof; provided, however, the Operator may petition for redemption and refund if the petition is filed before the determination becomes final as provided for in DCC 4.08. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 11(1), 1975) 4.08.230. Fraud -Refusal to collect -Evasion. If any Operator shall fail or refuse to collect sm:eh 48* -the correct room tax set forth in DCC 4.08 or to make, within the time provided in DCC 4.08 any report and remittance of such tax or any portion thereof required by DCC 4.08, or makes a fraudulent return or otherwise willfully attempts to evade DCC 4.08, the Tax Administrator shall proceed in such manner as he --the 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 DCC 4.08 from any Operator who has failed or refused to collect the same and to report and remit such tax, hethe Tax Administrator shall proceed to determine and assess against such Operator the tax, interest and penalties provided for by DCC 4.08. In case such determination is made, the Tax Administrator shall give a notice in the manner aforesaid of the amount so assessed. Such E,NMB1T A TO ORDINANCE 2004-005; 2002 03 8 (94QO02207/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & Stafi\,Stafl\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.doce'\..-_- r egWW:-„ ---'D , TAx to Ogee 2904 903 0)apter4l 08-T-2004des Revised on 7/16/2004 Exhibit Page 8 of 12 EXHIBIT A determination and notice shall be made and mailed within three years after discovery by the Tax Administrator of any fraud, intent to evade or failure or refusal to collect such tax, or failure to file return. Any amount of tax, interest, and penalties which the Tax Administrator determines are owed shall become due and payable immediately upon service of notice by the Tax Administrator of the amount of deficiency. The determination shall become final within ten (10) days after service of notice of the amount owed. The Operator may petition for redemption and refund if the petition is filed with the Tax Administrator before the determination becomes final as provided in this section. The failure or refusal of an Operator to collect or remit any tax or taxes required under DCC 4.08 is a Class A Violation. 4$8- (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 11(2), 1975) 4.08.240. Operator delay. If the Tax Administrator believes that the collection of any tax or any amount of tax required to be collected and paid to the County will be jeopardized by delay, or if any determination will be jeopardized by delay, hethe Tax Administrator shall thereupea--make a determination of the tax or amount of tax required to be collected, noting the determination. The amount so determined as provided in DCC 4.08 shall be immediately due and payable, and the Operator shall immediately pay same detemmination to the Tax Administrator after service of notice thereof;; provided; however the—The Operator may file a petition, after payment has been made, for redemption and refund of all or a portion of any amount paid sneh detearArtation, if the petition is filed within ten (10) days from the date of service of notice by the Tax Administrator. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 11(3), 1975) 4.08.250. Redeterminations. A. Any person against whom a determination is made under DCC 4.08.220, 4.08.230 and 4.08.240 or any person directly interested may petition for a redetermination and redemption and refund within the time required in DCC 4.08.220, 4.08.230 and 4.08.240. If a petition for redetermination and refund is not filed within the time required in DCC 4.08.220, 4.08.230 and 4.08.240, the determination becomes final at the expiration of the allowable -time allowed to submit a petition. B. If a petition for redetermination and refund is filed within the allowable period, the Tax Administrator shall reconsider the detemmination, and if the person has so requested in histhe petition, shall grant the person an oral hearing and shall given hinithe person ten (10) days written notice of the time and place of the hearing. The Tax Administrator may continue the hearing from time to time as may be necessary. C. 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. D. The ewer er decision of the Tax Administrator upon a petition for redetermination of redemption and refund becomes final ten (10) days after service upon the petitioner of notice thereof, unless appeal of such order or a decision is filed with the Board within ten (10) days after service of such notice. E. No petition for redetermination of redemption and refund or appeal therefrom shall be effective for any purpose unless the EJOIIBIT A TO ORDINANCE 2004-005; 2002 039 9 (044892207/2004) \\ZEUS\Shared\Commissioners\Correspondence - Comnunissioners & Stat1\Staf alike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08 -7-2004 docc•`T ,b. aW,.., � . n �r Revised on 7/16/2004 Exhibit el Page a1 of EXHIBIT A Operator has first complied with the payment provisions of DCC 4.08. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 12, 1975) 4.08.260. Security for collection of tax. A. The Tax Administrator, after delinquency and when he -the Tax Administrator, in the Tax Administrator's sole discretion, deems it necessary to insure compliance with DCC 4.08, may require any Operator subject thereto to deposit with him --the Tax Administrator such security in the form of cash, bond or other security as the Tax Administrator n��tean4edeems appropriate. The amount of the security shall be fixed by the Tax Administrator but shall not be greater than twice the Operator's estimated average monthly liability for the period for which hethe Operator files returns, determined in such manner as the Tax Administrator deems proper, or $5,000.00, whichever amount is the -lesser. The amount of the security may be increased or decreased by the Tax Administrator subject to the limitations provided in DCC 4.08. B. 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 theany courts of the Sstate of Oregon, or any -state -or of the United States, in the name of the County to collect the amount delinquent together with penalties and interest. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 13, 1975) 4.08.270. Lien. A. The tax imposed by DCC 4.08 together with the interest and penalties provided in DCC 4.08 and the filing fees paid to the County Clerk and advertising costs which may be incurred when the same becomes delinquent as set forth in DCC 4.08 shall be and, until paid, remain alien from the date of itsthe recording with the County Clerk a notice of lien, which shall be, and superior to all subsequent recorded liens on all tangible personal property used in the hotel of an Operator and may be foreclosed on and sold as may be necessary to discharge such lien, if the lien has been recorded. Notice of lien may be issued by the Tax Administrator, or his -a deputy of the Tax Administrator, whenever the Operator is in default in the payment of such tax, interest, and penalty and shall be recorded, and a copy sent to the delinquent Operator. The personal property subject to such lien seized by any deputy or employee of the Tax Administrator may be sold by the department seizing the same at public auction after ten (10)- days' notice which shall mean one publication in a newspaper of general circulation within the County. B. Any lien for taxes as shown on the records of the proper County official shall, upon the payment of all taxes, penalties and interest thereon, be released by the Tax Administrator when the full amount determined to be due has been paid to the County and the Operator or person making such payment shall receive a receipt therefor stating that the full amount of taxes, penalties and interest thereon have been paid and that the lien is thereby released and the record of lien is satisfied. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 14, 1975) 4.08.280. Refunds. A. Operator's Refunds. 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 DCC 4.08, it—such amount may be refunded, provided a verified claim in writing therefor, stating the specific reason upon which the claim is founded, is filed with the Tax Administrator within three E=B1T A TO ORDINANCE 2004-005; ''�3 10 (04 07/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & Staff\Staff\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08 -7-2004. Revised on 7/16/2004 Exhibit Page 15 of � EXHIBIT A years from the date 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 -en against any amounts then due and payable from the Operator from whom it was collected or by whom paid and the balance may be refunded to eaehthe Operator or the Operator's -his administrators, executors or assignees. B. Transient Refunds. Whenever the tax required by DCC 4.08 has been collected by the Operator, 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 therefor, stating the specific reason on which the claim is founded, is filed with the Tax Administrator within three years from the date of payment. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 15, 1975) 4.08.290. Transient room tax fund. The Tax Administrator shall place all moneys received pursuant to DCC 4.08 in the transient room tax fund. (Ord. 95-029 § 1, 1995; Ord. 203-3 § 16(1), 1975) 4.08.300. Recordkeeping. Evefy OpeFfltof shall keep guest meEwdr, of. room sales and aceounting books and minimum period of three years and six months after the record is created. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 16(2), 1975) 4.08.310. Examination of records. The Tax Administrator, or any person authorized in writing by him} -the Tax Administrator, may examine, during nonne}regular business hours, the books, papers and accounting records relating to room sales of any Operator after notification to the Operator liable for the tax and may investigate the business of the Operator in order to verify the accuracy of any return made, or if no return is made by the Operator, to ascertain and determine the amount required to be paid. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 16(3), 1975) 4.08.320. Administration -Confidentiality. It is unlawful for the Tax Administrator, or any person having an administrative or clerical duty under the provisions of DCC 4.08 to make known in any manner whatever the business affairs, operations or information obtained by an investigation of records and equipment of any person required to obtain a transient occupancy registration certificate or pay a transient occupancy tax, or any other person visited or examined in the discharge of official duty, or the amount of 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 DCC 4.08.320 shall be construed to prevent: Revised on 7/16/2004 Exhibit G Page _\� Of be mtained-by the Operator-fope-pe6od of A. The disclosure to, or the examination of records and equipment by another County into being. Every Operator shall, on a current official, employee or agent for collection of and ongoing basis, keep guest records, taxes for the sole purpose of administering or accounting books, records of room sales records enforcing any provision of DCC 4.08; or of room tax collected and remitted to the County collecting taxes imposed under DCC 4.08. and a record of all operator fees retained by B. The disclosure after the filing of a written Operator pursuant to DCC 4.08.120.D. All request to that effect, to the taxpayer himself, records shall be retained by the Operator for a receivers, trustees, executors, administrators, EXHIBIT A TO ORDINANCE 2004-005; 202 039 11 (044992-207/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & Statt\StafliMike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08 -7-2004. _ S:\ AFinanee D....... Tw . Rc-A .ion ihibi A Revised on 7/16/2004 Exhibit G Page _\� Of assignees and guarantors, if directly er-to fail or refuse to furnish a supplemental interested, of information as to any paid tax, return or other data records or information any unpaid tax or amount of tax required to required by the Tax Administrator, to fail or be collected or interest and penalties; refuse to submit to an audit by or on behalf of the provided further, that the district attorney Tax Administrator or to render a false or approves each such disclosure and that the fraudulent return. No person required to make, Tax Administrator may refuse to make any render, sign or verify any report shall make any disclosure referred to in DCC 4.08.320 when false or fraudulent report, with intent to defeat or in his the opinion of the Tax Administrator, evade the determination of any amount due the public interest would suffer thereby. required by DCC 4.08. Violation of any C. The disclosure of the names and addresses of provision of DCC Chapter 4.08 is a Class A any persons to whom transient occupancy infFFIrsiAnViolation. registration certificates have been issued. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 83-013 § 1, 1983; Ord. 203-3 § 19, 1975) D. The disclosure of general statistics regarding taxes collected or business done in the County. E. With respect to delinquent transient room taxes, the disclosure of information required in accordance with Oregon Revised Statute 192.502(17), or any amendment of said statute. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 16(4), 1975) 4.08.330. Appeals. Any person aggrieved by any provisions of the Tax Administrator may appeal to the Board by filing a notice of appeal with the Tax Administrator within twenty (120) days of the Tax Aadministrator's decision. The Tax Administrator shall transmit such notice of appeal, together with the file of such appealed matter to the Board who shall fix a time and place for hearing such appeal. The Board shall give the appellant not less than ten (-10) days written notice of the time and place of hearing of such appealed matter. (Ord. 2004-005 § 1, 2004; Ord. 95-029 § 1, 1995; Ord. 203-3 § 17, 1975) 4.08.340. Unlawful acts -Penalty. It is en-iPSFaeEien-a violation for any Operator, or other person so required, to fail or refuses to register as required in DCC 4.08, or -to fail or refuse to furnish any return required to be made, EYMBIT A TO ORDINANCE 2004-005; 2002 039 12 (04QOGM7/2004) \\ZEUS\Shared\Commissioners\Correspondence - Commmissioners & StaffiStaB\Mike Maier\2004 Correspondence & Other\Exhibit A to Ordinance 2004-005 - Chapter 4.08-7-2004.docc.v a ni :„„mORe, Tax n Tn hibi i Revised on 7/16/2004 Exhibit Page \2- of 1