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A Lodging TaxA CITYOF C SEN ~90 O9, Center D~ive, PO Box I47 Chanhassen, Minnesota 55317 Phone 612.93Z 1900 General Fax 612937.5739 E'agi, mi,g F~r 612.937.9152 Public SafeO, FAr 612.934.2524 lt~b www. ci. chanhasse,, mn. tts MEMORANDUM TO: Mayor City Council FROM: Scott A. Botcher, Cit3.' Manager DATE: SUB J: May 10, 2001 Lodging Tax and Promotional Committee You will find attached a draft copy of an ordinance authorizing a local lodging tax and identifying its use. The template of this ordinance was provided by Mr. Knutson from another community that he represents. Please read this ordinance and ensure that it meets your expectations. If so, I will have the ordinance prepared into a form acceptable for our code book, (i.e. numbering system). You may wish to include as a part of your ordinance a description as to how you wish to have a promotional committee established. If not, you still need to decide the make-up of this body so that it can be accomPlished parallel with the establishment of the room tax. It is fairly obvious that the establishment of a room tax absent a promotional committee would be a waste of our time. I might recommend that you consider the establishment of a five-member body, perhaps chaired by the Mayor, or his or her designee, along with a member of the lodging community, perhaps a businessperson, and two citizens within the community. Frankly the make-up of the committee, once you get passed the representation of the city and lodging interests, is one that appears to me to have more flexibility. However, you should give this issue some tho,aght prior to the meeting on Monday so that you can give staff direction as to how to incorporate this creation into what you approve at the next meeting. If this process is acceptable to you, the ordinance will be available for you to approve on May 29th. he Ci~. v£Chanhassen. A ~owh~g community with clean lakes, ttuality schools, a charmine downtown, thrivin~ businesses, and beauti&l oarks. A creat olace to live, work. and olay. ORDINANCE NO. CITY OF CHANHASSEN CARVER COUNTY, MINNESOTA AN ORDINANCE AMENDING XXXX TO ADD A NEW CHAPTER PROVIDING A LOCAL LODGING TAX THE CITY COUNCIL OF THE CITY OF CHANHASSEN ORDAINS: SECTION 1. XXXX of the Chanhassen City Code is amended by adding XXXX to read as follows: CHAPTER 17 LOCAL LODGING TAX 3-17-1: DEFINITIONS: Unless otherwise expressly stated, wherever used in this Chapter, the following words shall have the meanings given to them by the Section. LODGING: The furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it for a continuous peri'od of thirty (30) days or more. OPERATOR: A person who provides lodging to others, or any office, agent or employee of such person. 3-17-2: IMPOSITION OF TAX: There is hereby imposed a tax of three percent (3%) on the gross receipts from the furnishing for consideration of lodging. 3-17-3: COLLECTION: Each operator shall collect the tax imposed by this Chapter at the time rent is paid. The operator shall hold the tax collections in trust to the benefit of the City. The amount of tax shall be separately stated from the rent charged for the lodging. 3-17-4: PAYMENT AND RETURNS: The taxes imposed by this Chapter shall be paid by the operator to the City not later than twenty-five (25) days after the end of the month in which the taxes were collected. At the time of payment the operator shall submit a return upon such forms and containing such information as the City may require. The return shall contain the following minimum information: (A) The total amount of rent collected for lodging during the period covered by the return. (B) The amount of tax required to be collected and due for the period. 33256 r04/09./96 (c) (D) (E) The signature of the person filing the return or that of his agent duly authorized in writing. The period covered by the return. The amount of uncollectible rental charges subject:to the lodging tax. The operator may offset against the taxes payable with respect to any reporting period, the amount of taxes imposed by this Chapter previously paid as a result of any transaction the consideration for which became uncollectible during such reporting period, but only in proportion to the portion of such consideration which became uncollectible. 3-17-5: EXAMINATION OF RETURN, ADJUSTMENTS, NOTICES AND DEMANDS: After a return is filed, the City shall examine it and make any investigation or examination of the records and accounts of the person making the return deemed necessary for determining its correctness. The tax computed on the basis of such examination shall be the tax to be paid. If the tax due is found to be greater than that paid, such excess shall be paid to the City within ten (10) days after receipt of a notice thereof given either personally or sent by registered mail to the address shown on the return. If the tax paid is greater than the tax found to be due, the excess shall be refunded to the person who paid the tax to the City within ten (10) days after determination of such refund. 3-17-6: REFUNDS: Any person may apply to the City for a refund of taxes paid for a prescribed period in excess of the amount legally due.for that period, provided that no application for refund shall be considered unless filed within one year after such tax was paid, or within one year from the filing of the return, whichever period is the longer. The City shall examine the claim and make and file written findings thereon denying or allowing the claim in whole or in part and shall mail a notice thereof by registered mail to such person at the address stated upon the return. If such claim is allowed in whole or in part, the City shall credit the amount of the allowance against any taxes due under this Chapter from the claimant and the balance of the allowance, if any, shall be paid by the City to the claimant. 3-1%7: FAILURE TO FILE A RETURN: If any operator required by this Chapter to file a return shall fail to do so within the time prescribed, or shall make, willfully or otherwise, an incorrect, false, or fraudulent return, fne operator shall, upon written notice and demand, file such return or corrected return within five (5) days of receipt of such written notice and shall at the same time pay any tax due on the basis thereof. If such person shall fail to file such return or corrected return, the City shall make a return or corrected return, for such person from such knowledge and information as the City can obtain, and assess a tax on the basis thereof, which tax (less any payments theretofore made on account of the tax for the taxable period covered by such return) shall be paid within five (5) days of the receipt of written notice and demand for such payment. Any such return or assessment made by the' City shall be prima facie correct and valid, and such person shall have the burden of establishing its incorrectness or invalidity in any action or proceeding in respect thereto. If any portion of a tax imposed by this Chapter, including penalties thereon, is not paid within thirty (30) days after it is required to be 33256 r04/09/96 -2- paid, the City Attorney may institute such legal action as may be necessary to recover the amount due plus interest, penalties, the costs and disbursements of any action. Upon a showing of good cause, the City may grant an operator one thirty (30) day extension of time within which to file a return and make payment of taxes as required by this Chapter provided that interest during such period of extension shall be added to the taxes due at the rate often percent (10%) per annum. 3-17-8: PENALTIES: If any tax imposed by this Chapter is not paid within the time therein specified for the payment, or an extension thereof, there shall be added thereto a specific penalty equal to ten percent (10%) of the amount remaining unpaid. The amount of tax not timely paid, together with any penalty provided by this Section, shall bear interest at the rate of eight percent (8%) per annum from the time such tax should have been paid until paid. Any interest and penalty shall be added to the tax and be collected as ~,~ thereof. 3-17-9: VIOLATIONS: Any person who shall willfully fail to make a return required by this Chapter; or who shall fail to pay the tax after written demand for payment, or who shall fail to remit the taxes collected or any penalty or interest imposed by this Chapter after written demand for such payment or who shall refuse to permit the City to examine the books, records and papers under his or her control, or who shall willfully make any incomplete, false or fraudulent return shall be guilty of a misdemeanor. 3-17-10: USE OF PROCEEDS: Ninety five percent (95%) of the proceeds obtained from the collection of taxes pursuant to this Chapter shall be used in accordance with Minnesota Statutes, section 469.190 as the same may be amended from time to time to fund a local convention or tourism bureau for the purpose of marketing and promoting the City as a tourist or convention center. . 3-17-11: APPEALS: Any operator aggrieved by any notice, order or determination made by the City under this Chapter may file a petition for review of such notice, order or determination detailing the operator's reasons for contesting the notice, order or determination. The petition shall contain the name of the petitioner, the petitioner's address and the location of the lodging subject to the order, notice or determination. The petition for review shall be filed with the City Manager within ten (10) days after the notice, order or determination for which review is sought has been mailed or served upon the person requesting review. Upon receipt of the petition the City Manager, or the Manager's designee, shall set a date for a hearing and give the petitioner at least five (5) days' prior written notice of the date, time and place of the hearing. At the hearing, the petitioner shall be given an opportunity to show cause why the notice, order or determination should be modified or withdrawn. Counsel of petitioner's choosing at petitioner's own expense may represent the petitioner. The hearing shall be conducted by the City Manager or the Manager's designee, provided only that the person conducting the hearing shall not have participated in the drafting of the order, notice or determination for which review is sought. The person conducting the hearing shall make written findings of fact and conclusions based upon the applicable sections of this Chapter and the evidence presented. The person conducting the hearing may affirm, reverse or modify the notice, order or determination made by the City. Any decision rendered by the City Manager pursuant to this subdivision may be appealed to the City Council. A petitioner seeking to appeal a decision must file a written notice of appeal with the City Manager within ten (10) days after the decision has been mailed to the petitioner. The 33256 r04/09/96 -3- matter will thereupon be placed on the Council agenda as soon as is practical.- The Council shall then review the findings of fact and conclusions to determine whether they were correct. Upon a determination by the Council that the findings and conclusions Were incorrect, the Council may modify, reverse or affirm the decision of the City Manager or his designee upon the same standards as set forth in this subdivision. : SECTION '~.. This ordinance shall be effective on July 1,2001, following its passage and publication. ADOPTED this day of Chanhassen. ,2001, bythe City Council of the City of CITY OF CHANHASSEN ATTEST: BY: Linda C. Jansen, Mayor Scott A. Botcher, City Manager 33256 r04/09/96 -4-