HomeMy WebLinkAbout17 - Creation of Ad Hoc Committee on Resort Tax Policies�EWPpRT
o� Newport Beach City Council
z AGENDA ITEM 17
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g February 22, 1999 Council Meeting
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TO: MAYOR AND CITY COUNCIL
FROM: DAVE KIFF, ASSISTANT TO THE CITY MANAGER
SUBJECT: CREATION OF AD HOC COMMITTEE ON RESORT TAX POLICIES
RECOMMENDED ACTION:
(1) Approve Resolution 99-- creating the Ad Hoc Committee on Resort
Tax Policies;
(2) Direct the Committee to complete its work within 120 days; and
(3) Appoint council members and
to the Committee;
BACKGROUND:
In recent weeks, Council members have inquired about the manner in which the
City levies its Uniform Transient Occupancy Tax or "TOT." Council Members have
raised the following questions:
• Can the City collect TOT on `timeshare" or privately -owned resort units? If not, can
the City determine another way to collect non - property tax revenue on these types
of resort uses?
• What percentage of timeshare units is typically placed in a nightly rental pool and
therefore subject to TOT? How can the City maximize TOT revenue from these
nightly rental pool uses?
• Is the City's 30 -day "maximum stay" definition of a transient (subject to transient
taxation) appropriate? Can or should the 30 -day definition be extended to 45 days
or another period?
• Is area hotel operators' use of extended stay agreements and/or "qualifying rental
agreements" consistent across the City?
• Can or should the City collect TOT on the first 30 days of occupancy where a
person has entered into a qualifying rental agreement?
• What is the anticipated and/or historical percentage of tenants exempted from TOT
in extended stay hotels or residential rental locations?
• How can the City best administer and review recreational vehicle space rentals,
weekly or monthly oceanfront residential unit rentals, and other non -hotel rentals
subject to TOT collections?
Newport Beach City Council
Agenda Item _
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To further examine these and other questions, council members asked City staff
to establish an ad hoc committee consisting of three Council Members (voting members)
and an ex officio representative from the Newport Beach Conference and Visitors
Bureau (NBCVB).
This agenda item directs the formation of this ad hoc committee on Resort Tax
Policies with the following tasks:
1 — Review California law and case law relating to cities' ability to levy TOT on
privately -owned resort units or timeshares; and
2 — Review the City's procedures and ordinances regarding TOT as it applies to
resort uses, including timeshares and extended stay hotels; and
3 — Examine the TOT - related impacts of current and anticipated land uses that may
be subject to TOT; and
4 — Report back to the City Council on potential changes to the City's ordinances
and /or suggested changes to State law regarding TOT, timeshare uses, and
extended stay hotels.
City staff recommends that the Committee complete these tasks within 120 days
of the Committee's formation. As proposed in the resolution, the City Manager will
determine staffing for the committee and will direct City staff to provide appropriate
assistance to the Committee.
ATTACHMENT:
Attachment A — Resolution 99 -- Ad Hoc Committee on Resort Tax Policies
Agenda Item _
Page 3
RESOLUTION 99-
A RESOLUTION
OF THE CITY OF NEWPORT BEACH
ESTABLISHING THE AD HOC COMMITTEE
ON RESORT TAX POLICIES
WHEREAS, the City of Newport Beach levies a 10% Transient
Occupancy Tax ( "TOT ") on the room rental rate paid by visitors or transients
to the community; and
WHEREAS, TOT generates approximately $7.6 million for the City
each year, making it the City General Fund's third largest revenue source;
and
WHEREAS, the City seeks to maximize the amount of revenue
collected through TOT in order to continue providing high quality municipal
services to both visitors and residents; and
WHEREAS, the City has recently seen a renewed interest in the
placement of privately -owned or "timeshare" resort developments and
"extended stay" hotels in the region; and
WHEREAS, California Revenue and Taxation Code §7280 and
Chapters 3.16 and 20.84 of the Newport Beach Municipal Code are relevant
to the City's collection of TOT; and
WHEREAS, these State laws and City ordinances on TOT may limit the
City's ability to appropriately recover the service costs associated with
timeshare ownerships and/or extended stay hotels; and
WHEREAS, the City Council believes that the increasing number and
variety of visitor - serving facilities warrants a review of current City
ordinances regarding the collection of TOT and recommendations regarding
any appropriate changes to the Newport Beach Municipal Code;
NOW, THEREFORE BE IT RESOLVED, that the Newport Beach City
Council does hereby form the Ad Hoc Committee on Resort Tax Policies. The
Committee shall review State law and the City's current ordinances relating
to TOT administration and collection on resort uses, including timeshares and
extended stay hotels. After completing this review, the Committee shall
return to the full City Council with recommendations for ordinance
amendments as the Committee deems appropriate. The Ad Hoc Committee
on Resort Tax Policies shall consist of three members of the City Council
Agenda Item _
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serving as voting members and a representative of the Newport Beach
Conference and Visitors Bureau (NBCVB) as an ex officio member. The City
Manager shall determine and assign appropriate staff support for the
Committee.
ADOPTED this 22nd day of February, 1999.
MAYOR
ATTEST:
CITY CLERK