Amended in Assembly June 20, 2016

Amended in Assembly June 10, 2016

Senate Bill No. 133

Introduced by Senator McGuire

January 22, 2015

An act to add Chapter 1.1 (commencing with Section 7283.60) to Part 1.7 of Division 2 of the Revenue and Taxation Code, relating to hosting platforms.

LEGISLATIVE COUNSEL’S DIGEST

SB 133, as amended, McGuire. Transient occupancy taxes: hosting platforms: collection.

Existing law authorizes a city, county, or city and county to impose taxes within its jurisdiction, as provided, including a transient occupancy tax.

This bill would authorize a city, county, or city and county to elect to allow platforms, as defined, that elect to assume the responsibility of collecting and remitting transient occupancy taxes on behalf of operators, to collect and remit those taxes to that city, county, or city and county, as specified. For cities, counties, and cities and counties that notify the Controller of their election by April 30, 2017, and for platforms that notify the Controller of their election by March 1, 2017, this collection and remittance would begin on July 1, 2017. For platforms and cities, counties, or cities and counties that provide notifications to the Controller after those dates, the collection and remittance would begin at least 6 months after notification, as specified. The bill would authorize a city, county, or city and county to discontinue an election and would make this discontinuance effective at least 6 months after notification to the Controller. The bill would also authorize a platform to discontinue its election, entirely or in part, effective as specified.

This bill, by December 31, 2018, and by December 31 of each year thereafter, would require the Controller to review or audit a platform’s collection and remittance of tax revenue pursuant to the above-described provisions, would further require the Controller to submit a final report containing specific information to each city, county, or city and county in which the platform collected and remitted taxes, and would authorize the platform or the city, county, or city and county to appeal findings identified in the report begin insert , as provided end insert .

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Chapter 1.1 (commencing with Section 7283.60)
is added to Part 1.7 of Division 2 of the Revenue and Taxation
Code, to read:

 

Chapter  1.1. Voluntary Occupancy Tax Collection

 

7283.60.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Participating platform” means a platform that assumes the
responsibility for collecting and remitting to a city, county, or city
and county on behalf of an operator in a participating jurisdiction
pursuant to this chapter, the amount of transient occupancy tax on
a rental transaction that is facilitated by the platform for a unit that
is offered for occupancy for tourist or transient use for
compensation to the operator within a participating jurisdiction.

(b) “Participating jurisdiction” means a city, county, or city and
county that has adopted a resolution that permits a participating
platform to collect and remit all transient occupancy tax on rental
transactions that are facilitated by the platform for any unit that is
offered for occupancy for tourist or transient use for compensation
to an operator within its jurisdiction and has notified the Controller
pursuant to subdivision (b) of Section 7283.63, and in which a
participating platform is collecting and remitting transient
occupancy tax on rental transactions that are facilitated by the
platform for any unit that is offered for occupancy for tourist or
transient use for compensation to an operator within its jurisdiction.

(c) “Operator” means a person offering, through a platform, to
make a unit available for tourist or transient use.

(d) “Personally identifiable information” means operator
information and identifiable transaction-level records. “Operator
information” means a taxpayer’s or operator’s identifying
information, including without limitation, the taxpayer’s or
operator’s name, the taxpayer’s or operator’s address, and the
property address of any unit made available by an operator or
occupied by a taxpayer through a participating platform.
“Identifiable transaction-level records” means begin delete records of individual
rental transactions that, when taken together with other information
that is publicly accessible, would be reasonably likely, as
determined by the Controller, to reveal the identity or business
records of an individual operator or taxpayer. There shall be a
presumption that individual transaction records in a participating
jurisdiction with fewer than 500 monthly transactions qualify as
identifiable transaction-level records. end delete begin insert any information that reveals
the amount of rent collected or the amount of transient occupancy
tax collected with respect to any individual transaction or any
individual operator. end insert

(e) “Platform” means a marketplace that is created for the
primary purpose of facilitating the rental of a unit offered for
occupancy for tourist or transient use for compensation to the
operator of that unit, and the owner of the marketplace derives
revenues, including booking fees or advertising revenues, from
providing or maintaining that marketplace. “Facilitating” includes,
but is not limited to, the act of allowing the operator of the unit to
offer or advertise the unit on the Internet Web site provided or
maintained by the owner of the platform.

(f) “Transient occupancy tax” means a tax on the privilege of
occupying a room or rooms, or other living space, in a hotel, inn,
tourist home or house, motel, or other lodging unless the occupancy
is for a period of more than 30 days.

7283.61.  

On and after July 1, 2017, every participating platform
shall collect on behalf of an operator the amount of any transient
occupancy tax on every rental transaction that is facilitated by the
participating platform for a unit that is offered for occupancy for
tourist or transient use for compensation to the operator and is
located within a participating jurisdiction. The participating
platform shall remit the amount to the participating jurisdiction
pursuant to applicable requirements of local ordinances governing
the remission, but not the reporting, of the tax.

7283.62.  

On or before March 1, 2017, the Controller shall
develop and publicly notice both of the following:

(a) Procedures that a platform shall use to notify the Controller
if the platform elects to, or discontinues its election to, become a
participating platform.

(b) Procedures that a city, county, or city and county shall use
to notify the Controller if the city, county, or city and county elects
to, or discontinues its election to, become a participating
jurisdiction.

7283.63.  

(a) On or before March 1, 2017, a platform may elect
to become a participating platform by using the procedures
developed pursuant to subdivision (a) of Section 7283.62 to notify
the Controller of the platform’s election.

(b) On or before April 30, 2017, a city, county, or city and
county may elect by resolution to become a participating
jurisdiction by using the procedures developed pursuant to
subdivision (b) of Section 7283.62 to notify the Controller of the
city’s, county’s, or city and county’s election.

(c) An election made pursuant to this section is effective upon
receipt by the Controller and until discontinued by the platform
or city, county, or city and county pursuant to Section 7283.65,
except that a city, county, or city and county’s election pursuant
to this section shall not be effective as to a participating platform
that, on or before June 15, 2017, notifies the Controller that the
participating platform will not collect and remit transient occupancy
tax in the city, county, or city and county.

(d) The Controller shall publicly identify, by posting on the
Controller’s Internet Web site, each platform and each city, county,
or city and county that has provided a notification to the Controller
pursuant to this section as soon as possible upon receipt, but in no
event later than May 31, 2017.

7283.64.  

On or after July 1, 2017, a platform that did not elect
to become a participating platform pursuant to Section 7283.63 or
had previously elected to discontinue its status as a participating
platform may elect or reelect to become a participating platform
by using the procedures developed pursuant to subdivision (a) of
Section 7283.62 to notify the Controller of the platform’s election.
An election made pursuant to this section is effective six months
after receipt by the Controller or the date specified in the notice,
whichever is later, and until discontinued by the platform pursuant
to Section 7283.65. The Controller shall publicly identify, by
posting on the Controller’s Internet Web site, each platform that
has provided a notification to the Controller pursuant to this section
as soon as possible upon receipt.

7283.65.  

(a) A participating platform may elect to discontinue
its status as a participating platform by using the procedures
developed pursuant to subdivision (a) of Section 7283.62 to notify
the Controller of the participating platform’s election. An election
made pursuant to this subdivision is effective on the first day of
the month that is six months after the date of the election. A
participating platform may notify the Controller that the
participating platform will discontinue collecting and remitting
transient occupancy tax in any participating jurisdiction that
amends or otherwise alters the ordinance, rules, or provisions
applicable to transient occupancy tax in the participating
jurisdiction upon the effective date of the amendments or
alterations.

(b) On or before June 30, 2018, or June 30 of any year thereafter,
a participating jurisdiction may elect to discontinue its status as a
participating jurisdiction, or a city, county, or city and county may
elect to become a participating jurisdiction, by using the procedures
developed pursuant to subdivision (b) of Section 7283.62 to notify
the Controller of the participating jurisdiction’s or city’s, county’s,
or city and county’s election. An election made by June 30 of any
year pursuant to this subdivision is effective on January 1 of the
following year after the election, except that a city, county, or city
and county’s election pursuant to this subdivision shall not be
effective as to a participating platform that, on or before November
15 of the year in which the election is made, notifies the Controller
that the participating platform will not collect and remit transient
occupancy tax in the city, county, or city and county.

(c) The Controller shall publicly identify, by posting on the
Controller’s Internet Web site, each platform and each city, county,
or city and county that has provided a notification to the Controller
pursuant to this section as soon as possible upon receipt.

7283.66.  

(a) By December 31, 2018, and by December 31 of
each year thereafter, the Controller shall review or audit a
participating platform’s collection and remittance of tax revenue
pursuant to Section 7283.61 and shall submit a final report to each
participating jurisdiction in which the participating platform
collected and remitted taxes. The final report shall not disclose
any personally identifiable information and shall contain only the
following information:

(1) A general description of the Controller’s review or audit
findings.

(2) The aggregate amount of taxes collected and remitted to
each participating jurisdiction by each participating platform during
the period covered by the report.

(3) An identification of any errors in the collection and
remittance of tax revenues within the participating jurisdiction that
were determined as a result of any review or audit in the
participating jurisdiction that were not remediated, including by
payment of all amounts owing, within 90 days.

(4) The participating platform’s response, if any, to errors
identified by any audit or review in the participating jurisdiction
that were not remediated, including by payment of all amounts
owing, within 90 days.

(b) (1) The Controller shall only request the participating
platform to submit personally identifiable information as
reasonably necessary to (i) verify a participating platform’s proper
application of geographic boundaries and (ii) verify proper
collection and remittance of transient occupancy tax, and shall not
disclose to a participating jurisdiction, publicly disclose, or
otherwise make known in any manner whatsoever any personally
identifiable information obtained from a participating platform or
other person in the course of conducting an audit or review required
by this section.

(2) When requested by a participating jurisdiction, the Controller
shall permit any duly authorized officer or employee of that
participating jurisdiction to examine the records of the Controller,
excluding any personally identifiable information, pertaining to
any audit or review of collections by a participating platform within
that participating jurisdiction. Except as otherwise provided herein,
this paragraph shall not be construed to allow any officer or
employee of that participating jurisdiction to request or examine
any records other than records in the Controller’s possession that
were obtained in the course of its review or audit of transient
occupancy taxes collected by a participating platform within that
participating jurisdiction.

(c) A platform or a participating jurisdiction may appeal any
findings identified in a review or audit report submitted pursuant
to subdivision (a) by providing a notice of appeal to the
Controller’s General Counsel. The notice of appeal shall be filed
within 60 days from the date of the final review or audit report
and shall identify the issues being appealed and the basis and
reason for the appeal. The Controller’s General Counsel shall
review the issues appealed and may hold an informal appeal
conference for purposes of taking additional information and shall
issue a determination within 90 days of receipt of the appeal.

(d) The Controller may recover the reasonable costs, measured
by the Controller’s standard rate, of an audit or review conducted
pursuant to subdivision (a) or an appeal conducted pursuant to
subdivision (c) from the participating platform that was audited
or reviewed.

(e) This section shall not apply to cities, counties, or cities and
counties that are not participating jurisdictions.

7283.67.  

This chapter does not limit the existing authority of
a city, county, or city and county to regulate operators, including
any local regulation that requires operators to provide information
concerning transactions conducted in the city, county, or city and
county, provided that the requirements do not discriminate against
transactions facilitated through a platform.

7283.68.  

A participating platform’s collection and remittance
of transient occupancy tax pursuant to this chapter shall be subject
to audit or review only by the Controller, pursuant to the
requirements of Section 7283.66. A participating platform shall
not be required to comply with audit or review requirements or
requests regarding the participating platform’s collection and
remittance of transient occupancy tax pursuant to this chapter in
any participating jurisdiction, or to related requests or requirements
for personally identifiable information, by any participating
jurisdiction.

7283.69.  

A participating platform that complies with audit or
review parameters established by the Controller pursuant to Section
7283.66 shall not be required to provide personally identifiable
information to begin delete any city, county, or city and county, including end delete a
participating jurisdiction, except pursuant to an order by a court
of competent jurisdiction.

7283.70.  

This chapter shall not be construed as creating any
legal duty or requirement for a participating platform to collect or
remit transient occupancy taxes in a city, county, or city and county
that is not a participating jurisdiction.

SEC. 2.  

The Legislature finds and declares that Section 1 of
this act, which adds Section 7283.66 to the Revenue and Taxation
Code, imposes a limitation on the public’s right of access to the
meetings of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

People who rent units for tourist or transient use through
platforms have a reasonable expectation of privacy, as against
public disclosure, in their rental of those units and in the personally
identifiable information they provide to platforms in connection
with those rentals. Limiting the disclosure of that personally
identifiable information in any records obtained or generated by
the Controller pertaining to audits or reviews of a platform’s
collection and remittance of transient occupancy taxes furthers the
purposes of Section 3 of Article I of the California Constitution
by appropriately balancing the interest in public disclosure with
the interest in preserving the privacy and confidentiality of that
personally identifiable information.