AGENDA TITLE:
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Receive Information on Tourism Business Improvement District And The Transient Occupancy Tax Audit Conducted By Hinderliter de Llamas And Associates (HdL) For The Period Covering January 2019 To September 2022 (Fin)
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MEETING DATE:
January 23, 2024
PREPARED BY:
Melissa Munoz, Accounting Manager
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RECOMMENDED ACTION:
Receive information on Tourism Business Improvement District and the Transient Occupancy Tax Audit conducted by Hinderliter de Llamas and Associates (“HdL”) for the period covering January 2019 to September 2022.
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BACKGROUND INFORMATION:
The Transient Occupancy Tax (“TOT”) is a tax that vacation rental hosts in California are required to charge to their guests. The proceeds from the tax go to the General Fund, funding local public services such as police, fire, and general services.
HdL’s TOT Audit Service employs a business-friendly approach which educates hoteliers in TOT regulations and filing procedures, ensures compliance, and maximizes agency revenues.
A TOT Audit was conducted remotely on nine hotels covering the period from January 2019 to September 2022, and completed an analysis and a detailed review of the sample periods from within each filing year. There were eight reported findings: Reported vs. Recorded, Untaxed Guest Charges, Comped Rooms, Assessed Markup 20%, CTAF Untaxed, Untaxed Guest Charges, Resort Fees, and Exemptions. The total of these findings came to $481,908.08. Of that, the City accepted $167,205.06, resulting in a loss of $314,703.02 in TOT Revenue.
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
N/A
FUNDING AVAILABLE:
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Melissa Munoz
Accounting Manager
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Andrew C. Keys
Interim City Manager