title
Consider introducing an ordinance to amend Chapter 11 Article II of the Solano County Code relating to procedures for collection of the Transient Occupancy Tax
body
Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board:
1. Read the proposed ordinance by title only and waive further reading of the ordinance by majority vote; and
2. Introduce an ordinance amending Chapter 11, Article II of the Solano County Code relating to procedures for collection of the Transient Occupancy Tax (TOT). The proposed ordinance would expand the definition of a hotel operator to include online booking services that arrange rental space for transient lodging. In addition, the revisions clarify and modernize collection processes to include expanded enforcement and collection tools at the same level as those currently available for the collection of any other unsecured tax collected by the Department of the Treasurer - Tax Collector - County Clerk (TTCCC).
SUMMARY:
The TTCCC department is charged with collecting TOT in accordance with the provisions found in Chapter 11 Article II of the Solano County Code. When last reviewed, this ordinance was focused on the types of facilities available and subject to TOT collection in the unincorporated area. At the time this consisted of a single rural hotel and a few rural properties that might on occasion provide Bed & Breakfast (BNB) facilities in addition to other services such as event hosting or horse boarding.
Technological changes have enabled online providers to develop lists of available properties in a given area and, as a result, have greatly expanded the provision of on demand BNB facilities in the unincorporated areas of Solano County. The recommended ordinance changes will clarify that these activities are subject to the collection of TOT and allow the TTCCC to work with the online booking service provider to collect and remit TOT payments on behalf of the hotel owner or manager. This should provide enhanced enforcement of the TOT and generate additional revenue to the County.
Additional revisions to the ordinance expand the collection tools available to the TTCCC to align them with the tools currently available for the collection of any other unsecured Tax collected by the TTCCC.
FINANCIAL IMPACT:
There is no cost associated with these ordinance revisions. The TTCCC may be able to increase TOT collections through the improved collection processes that will be available as a result of the revisions.
As a result of the rise in popularity of short-term rental services, TOT collections in the unincorporated area have increased for each of the prior four fiscal years; with collections of $0.00, $3,845, $7,515 and $10,835 in FY2015/16, FY2016/17, FY2017/18, and FY2018/19 respectively.
FY2019/20 actual collections are $4,584 year to date through August 8th, with an adopted budget of $14,000 for the fiscal year.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2019/20 Adopted Budget.
ALTERNATIVES:
The Board could choose not to amend the TOT ordinance. This is not recommended as it will increase the challenges associated with the collection of revenues owed to the county.
OTHER AGENCY INVOLVEMENT:
County Counsel, the County Administrator and Resource Management have reviewed the Ordinance.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION