TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
Steve Charelian, Revenue Services Manager
SUBJECT:Title
Shade Hotel Appeal of Transient Occupancy Tax Audit Findings (Finance Director Moe).
CONDUCT APPEAL HEARING
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council conduct an appeal hearing of the Shade Hotel Transient Occupancy Tax audit findings and render a decision on the collection of the tax.
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FISCAL IMPLICATIONS:
A total of $22,597.46 in Transient Occupancy Tax (TOT) is considered due and payable from the Shade Hotel as a result of an audit conducted in FY 2015-2016 for calendar years 2012-2015. This is based upon under-collection/under-reporting of the City's TOT on hotel revenue of $225,975.
BACKGROUND:
During FY 2016-2017, the City undertook an audit of Manhattan Beach hospitality industry providers (hotels, motels) to determine if the appropriate amount of Transient Occupancy Tax (TOT) had been collected during calendar years 2012-2015. The audit of all twelve businesses resulted in the following findings:
* Five of the twelve hotels were found to have no deficiencies, meaning TOT was collected appropriately for all fees, including pet fees, cancellation, no show fees, etc.
* The seven hotels with deficiencies under-reported/under-collected taxes of between $99.70 to $22,597.46
* The median amount due from the seven hotels was $8,834
* Seven of the hotels reported pet fees correctly
* Ten of twelve hotels collected TOT on no-shows correctly
Of the seven hotels with deficiencies, six ultimately complied with the audit findings and remitted the TOT due. The one remaining hotel, Shade, disagreed with the audit findings.
The City issued Shade a Notice of Deficiency Determination dated June 6, 2016 (Attachment #1) for which payment was due no later than June 17, 2016. In accordance with ...
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