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HomeMy WebLinkAboutOrdinance No. 2023-25 ORDINANCE NO. 2023-25 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS, AMENDING CHAPTER 74 "TAXATION" OF THE FRIENDSWOOD CITY CODE, BY ADDING A NEW ARTICLE TO BE NUMBERED AND ENTITLED ARTICLE V"HOTEL OCCUPANCY TAX"TO IMPOSE SUCH A TAX WITHIN THE CORPORATE LIMITS OF THE CITY OF FRIENDSWOOD; PROVIDING A MAXIMUM PENALTY OF FIVE HUNDRED AND NO/100 DOLLARS ($500.00); REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES INCONSISTENT OR IN CONFLICT HEREWITH; PROVIDING FOR SEVERABILITY, PUBLICATION AND AN EFFECTIVE DATE. WHEREAS, Section 351.002 of the Texas Tax Code authorizes municipalities to impose a tax on a person who, under a lease, concession, permit right of access, license, contract or agreement,pays for the use or possession or for the right to the use or possession of a room that is in a hotel, costs $2.00 or more each day, and is ordinarily used for sleeping; and WHEREAS, revenues from such tax must be used to promote tourism and the convention • and hotel industry, and that use is limited to one (1) of nine (9) statutorily provided categories designed to put "heads in beds"; and WHEREAS, the City Council of the City of Friendswood desires to impose such hotel occupancy tax on hotels within the corporate limits of the City of Friendswood; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, STATE OF TEXAS: Section 1. That Chapter 74 "Taxation" of the Friendswood City Code is hereby amended by adding a new article to be numbered and entitled Article V "Hotel Occupancy Tax," which article shall read as follows: Chapter 74. TAXATION ARTICLE V. HOTEL OCCUPANCY TAX Sec. 74-81. Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Complete, accurate report shall mean provision of each and every element contained or required, in a form(s)prescribed by the or approved in advance by the director. Consideration shall mean the cost of the use, possession or right to use or possess a room, which room is ordinarily used for sleeping. This term shall not include the cost of any food served by the hotel or personal services rendered by the hotel to the occupant of such room,which service is not related to the cleaning and readying of such room for occupancy. Director shall mean the director of administrative services of the city. Hotel shall mean any building or buildings in which members of the public may obtain sleeping accommodations for consideration. This term shall include a hotel, motel, tourist home, tourist house, tourist court, lodging house, inn, rooming house, bed and breakfast, short-term rental, or other building. This term shall not include a hospital, sanitarium, or nursing home. Occupancy shall mean the use or possession,or the right to the use or possession,of any room in a hotel if the room is one ordinarily used for sleeping. Occupant shall mean anyone,who, for consideration,uses,possesses, or has a right to use or possess any room in a hotel under any lease, concession, permit,right of access, license, contract, or agreement. Permanent resident shall mean a person who has the right to use or possess a room in a hotel for at least 30 consecutive days, so long as there is no interruption of payment for the period. Short-term rental shall mean the rental of all or part of a residential property to a person who is not a permanent resident. State governmental entity shall mean this state, or an agency, institution, board, or commission of this state, other than an institution of higher education as defined in V.T.C.A., Education Code § 61.003. Quarterly period shall mean the regular calendar quarters of the year—the first quarter being composed of the months of January, February and March; the second quarter being the months of April, May and June; the third quarter being the months of July, August and September; and the fourth quarter being the months of October,November and December. Sec. 71-82. Tax levied; amount. (a) Tax. There is hereby levied within the corporate limits of the city, a tax upon the cost of occupancy of any room furnished by any hotel where such cost of occupancy is at the rate of$2.00 or more per day, such tax to be equal to seven percent (7%) of the consideration paid by the occupant of such room to such hotel. (b) Exemption. (1) No tax shall be imposed hereunder upon the following: 2 a. a permanent resident; b. the United States, a governmental entity of the United States, or an officer or employee of a governmental entity of the United States when traveling on or otherwise engaged in the course of official duties for the governmental entity. c. an officer or employee of a state governmental entity who is entitled to reimbursement by the state governmental entity for the cost of lodging and for whom a special provision or exception to the general rate of reimbursement under the General Appropriations Act is applicable if such person provides photo identification verifying the identity and exempt status of the person. (2) The right to use or possess a room in a hotel is exempt from taxation under subsection (a) if the person required to collect the tax receives, in good faith from a guest, an exemption certificate stating qualification for an exemption provided in subsection (b)(1)(c). The exemption must be supported by the documentation required under rules adopted by the comptroller and the director. (c) Refund. A tax imposed on the following persons or entities shall be paid but is subject to refund to the state governmental entity in accordance with subsection (d): (1) a state governmental entity; or (2) an officer or employee of a state governmental entity who is entitled to reimbursement by the state governmental entity for the cost of lodging and for whom a special provision or exception to the general rate of reimbursement under the General Appropriations Act is not applicable. (d) Refund procedure. (1) A state governmental entity that is entitled under subsection(c)to a refund of taxes paid under this article must file a refund claim with the director. (2) The claim must be filed on a form provided by the director, which shall be substantially similar to that prescribed by the state comptroller, and shall be submitted along with all documentation required by director, which information shall include, but not be limited to,the following: a. A copy of the hotel folio, billing statement, invoice, or other document, that contains the following information: 1. Name of the hotel; 2. Location address of hotel; 3 3. Name of city where hotel is located; 4. Name of county where hotel is located; 5. Date(s) of lodging; 6. Amount of municipal hotel tax paid; 7. Method of payment (travel voucher reimbursement, state credit card, state purchase order, direct billing, other); and 8. Name of employee, if tax reimbursed on travel voucher; and 9. Additional documentation as may be required by the director to ensure a proper refund is processed. (3) A claim for a refund may be filed only for each calendar quarter for all reimbursements accrued during that quarter. (4) A state agency may apply for a refund of state hotel tax no later than two years after the end of the fiscal year in which the travel occurred. (5) A hotel may apply for a refund of hotel occupancy tax erroneously paid under this article no later than twelve (12) months after the end of the month in which the payment was incurred. Sec. 74-83. Collection of tax. (a) Collection. Every person owning, operating, managing or controlling any hotel shall collect the tax imposed by this article for the city. (b) Withholding amount due in the event of a sale. Under the provisions of V.T.C.A., Tax Code § 351.0041, if a hotel is sold,the purchaser shall withhold an amount of the purchase price sufficient to pay any amount due under this article until the seller produces a receipt showing that any amount due has been paid or a certificate issued by the city showing that no tax is due. If the purchaser fails to withhold an amount,the purchaser is liable to the city for the amount required to be withheld. (c) Collection cost reimbursement. (1) Those persons who are required to collect the tax imposed herein and who report and pay such tax to the city in a timely manner, as required herein, may deduct and withhold from the payment to the city, as reimbursement for the cost of collecting such tax, an amount equal to one percent (1%) of the amount of tax collected in accordance with section 74-82 of this article. The reimbursement provided for 4 herein shall be forfeited for failure to pay the tax or to file a complete, accurate report in a timely manner as required in this article. (2) Any person participating in a hotel occupancy tax rebate with the city shall be prohibited, during the term of the rebate agreement, from withholding the one- percent reimbursement provided for in subsection(c) of this section. (3) If the city fords any underreporting of hotel revenue or late reporting of hotel revenue, the hotel will pay the city any amounts previously withheld pursuant to subsection(c)(1) of this section for any month that hotel revenue was not properly and timely reported. (d) Audit. (1) Performance of Audit. The city may perform or cause an audit to be performed to ensure the proper payment of tax under this article. (2) Costs. If the city finds that the underreporting of hotel revenue is greater than two percent(2%)of the hotel's reported receipts for any audit period,the hotel shall pay a fee for the cost of the audit. This audit fee will be assessed if(i) the taxes have been delinquent for at least two (2) complete municipal fiscal quarters at the time the audit is conducted and (ii) the city has not received a disbursement from the comptroller as contemplated in V.T.C.A. Tax Code §351.004. Sec. 74-84. Quarterly reports and payments. On or before the last day of the month following each quarterly period,every person required to collect the tax imposed by this article,shall file a report with the director. The report shall show the consideration paid for all room occupancies in the preceding quarter, the amount of the tax imposed by this article that was collected on such occupancies, the number of persons exempt from the tax imposed by this article during the quarter, and any other information the director may reasonably require. Such person shall pay the taxes due on such occupancies at the time of filing such report. For example, the report and taxes due for the quarterly period of January, February and March of a given year shall be paid to the city on or before April 30 of the same year. At the time of the quarterly report and payment of the state hotel occupancy tax, there shall also be furnished to the director a copy of such quarterly report. Sec. 74-85. Rules and regulations. The director shall have the power to make such rules and regulations as are reasonable and necessary to effectively collect the tax levied in this article,and shall,upon reasonable notice,have access to all books and records of each person who owns, operates, manages or controls a hotel, necessary to verify the accuracy of any report filed, as required by this article and the amount of taxes due under the provisions of this article. 5 Sec. 74-86. Penalties. (a) Criminal Penalties. Any person violating any of the provisions of this article, including persons who fail to collect the tax, fail to file a report, file a false report, fail to pay the tax, or who are delinquent in their payment, shall,upon conviction,be punished as provided in section 1-14 of this code. (b) Civil Penalties. A penalty of fifteen percent (15%) of the tax due shall be imposed on a person, who fails to pay a tax imposed by this article when due if the tax has been delinquent for at least one complete municipal fiscal quarter. (c) Interest on delinquent taxes. The tax imposed by this article that is not paid to the city when it is due shall accrue interest on the delinquent amount at the rate provided for in V.T.C.A., Tax Code § 351.0042. (d) Assessment. If any person fails to file a report for any period as required by this article, or shall fail to pay the tax for any period as required by this article,then the director is hereby authorized to make an assessment of the tax for such period. The tax assessed, together with any penalties provided by statute, shall be a prior and superior line on all property of the hotel. (e) Additional remedies. The city is hereby authorized to take additional actions against any person who violates any provision of this article in accordance with V.T.C.A., Tax Code ch. 351. The penalties provided for in this section,are in addition to other remedies and/or actions for collection available to the city by law. Section 2. That a person who violates any provision of this ordinance shall be deemed guilty of a misdemeanor and upon conviction, shall be fined in an amount not to exceed FIVE HUNDRED AND NO/100 DOLLARS ($500.00). Each day of violation shall constitute a separate offense. Section 3. All ordinances or parts of ordinances in conflict or inconsistent with this ordinance are hereby expressly repealed. Section 4. In the event any clause,phrase,provision,sentence,or part of this ordinance or the application of the same to any person or circumstances shall for any reason be adjudged invalid or held unconstitutional by a court of competent jurisdiction, it shall not affect, impair, or invalidate this ordinance as a whole or any part or provision hereof other than the part declared to be invalid or unconstitutional; and the City Council of the City of Friendswood, Texas, declares that it would have passed each and every part of the same notwithstanding the omission of any such part thus declared to be invalid or unconstitutional, whether there be one or more parts. Section 5. The City Secretary shall give notice of the enactment of this ordinance by promptly publishing the caption of this ordinance after final passage in the official newspaper of the City. 6 Section 6. This ordinance shall become effective on October 1, 2023, after its date of adoption and its publication, as provided by law. PASSED and APPROVED on first reading by the affirmative vote of the City Council this 28th day of August, 2023. M ORE N, Mayor ATT' T: A f' iláIk �of F R'EN�S LETICIA BRYSCH, City - - U( P ) ;111. 0 APPROVED AS TO FORM: N� qT-OF T �3"- KAREN L. HORNER, City Attorney PASSED, APPROVED and ADOPTED on second and final reading by the affirmative vote of the City Council l la'day of September, 202 A IKE Fe ' • N, Mayor ATT? : i , t / / /InMk F FRIENr, LETICIA BRYSCH, City Secreta .�O _ S 41111 APPROVED AS TO FORM. y * N��i�O F� --13"'� KAREN L. HORNER, City Attorney H:\City Council\Ordinances\2023\08-28-2023\HOT Ordinance 08182023.docx