Subd. 1. Definitions. The following terms, as used in this section, shall have the meanings stated.
A. The term "lodger" means the person obtaining lodging from an operator.
B. The term "lodging" means the furnishing for a consideration of lodging by a hotel, motel or rooming house, except where the lodging shall be for a continuous period of 30 days or more to the same lodger(s). The furnishing of rooms by religious, educational or non-profit organizations shall not constitute "lodging" for purposes of this section.
C. The term "operator" means a person who provides lodging to others or any officer, agent or employee of the person.
D. The term "rent" means the total consideration valued in money charged for lodging whether paid in money or otherwise, but shall not include any charges for services rendered in connection with furnishing lodging other than the room charge itself.
Subd. 2. Imposition of Tax. There is hereby imposed a tax of 3% on the rent charged by an operator for providing lodging to any person after 10-1-1990. The tax shall be stated and charged separately and shall be collected by the operator from the lodger. The tax collected by the operator shall be a debt owed by the operator to the city and shall be extinguished only by payment to the city. In no case shall the tax imposed by this section upon an operator exceed the amount of tax which the operator is authorized and required by this section to collect from a lodger.
Subd. 3. Collections. Each operator shall collect the tax imposed by this section at the time the rent is paid. The tax collections shall be deemed to be held in trust by the operator for the city. The amount of tax shall be separately stated from the rent charged for the lodging and those persons paying the tax shall receive a receipt of payment from the operator.
Subd. 4. Advertising No Tax. It is unlawful for any operator to advertise, or hold out or state to the public or any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent or that, if added, it or any part thereof will be refunded. In computing the tax to be collected, amounts of tax less than $0.01 shall be considered an additional cent.
Subd. 5. Payment and Returns.
A. The taxes imposed by this section shall be paid by the operator to the city monthly not later than 15 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 the forms and containing the information as the City Administrator may require. The return shall contain the following minimum information:
1. The total amount of rent collected for lodging during the period covered by the return;
2. The amount of tax required to be collected and due for the period;
3. The signature of the person filing the return or that of his or her agent duly authorized in writing;
4. The period covered by the return; and
5. The amount of uncollectible rental charges subject to the lodging tax.
B. The operator may offset against the taxes payable with respect to any reporting period, the amount of taxes imposed by this section previously paid as a result of any transaction, the consideration for which became uncollectible during the reporting period, but only in proportion to the portion of the consideration which became uncollectible.
Subd. 6. Examination of Return, Adjustments, Notices and Demands. The City Administrator shall, after return is filed, examine the same 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 the examination shall be the tax to be paid. If the tax due is found to be greater than that paid, the excess shall be paid to the city ten 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 days after determination of the refund.
Subd. 7. Refunds. Any person may apply to the City Administrator 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 the tax was paid, or within one year from the filing of the return, whichever period is the longer. The City Administrator 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 the person at the address stated upon the return. If the claim is allowed in whole or in part, the City Administrator shall credit the amount of the allowance against any taxes due under this section from the claimant and the balance of the allowance, if any, shall be paid by the City Administrator to the claimant.
Subd. 8. Failure to File a Return.
A. If any operator required by this section 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, the operator shall, upon written notice and demand, file the return or corrected return within five days of receipt of the written notice and shall at the same time pay any tax due on the basis thereof. If the person shall fail to file the return or corrected return, the City Administrator shall make a return or corrected return, for the person from the knowledge and information as the City Administrator 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 the return) shall be paid within five days of the receipt of written notice and demand for the payment. Any such return or assessment made by the City Administrator shall be prima facie correct and valid and the person shall have the burden of establishing its incorrectness or invalidity in any action or proceeding in respect thereto.
B. If any portion of a tax imposed by this section, including penalties thereon, is not paid within 30 days after it is required to be paid, the City Attorney may institute the legal action as may be necessary to recover the amount due plus interest, penalties, the costs and disbursements of any action.
C. Upon a showing of good cause, the City Administrator may grant an operator one 30-day extension of time within which to file a return and make payment of taxes as required by this section provided that interest during the period of extension shall be added to the taxes due at the rate of 10% per annum.
Subd. 9. Penalties.
A. If any tax imposed by this section is not paid within the time herein specified for the payment, or any extension thereof, there shall be added thereto a specific penalty equal to 10% of the amount remaining unpaid.
B. In case of any failure to make and file a return within the time prescribed by this section, unless it is shown that the failure is not due to willful neglect, there shall be added to the tax, in addition to the 10% specific penalty provided in Subd. 9.A. above, 10% if the failure is for not more than 30 days with an additional 5% for each additional 30 days or fraction thereof during which the failure continued, not exceeding 25% in the aggregate. If the penalty as computed does not exceed $10, a minimum penalty of $10 shall be assessed. The amount so added to any tax shall be collected at the same time and the same manner and as a part of the tax unless the tax has been paid before the discovery of the negligence, in which case the amount so added shall be collected in the same manner as the tax.
C. If any person willfully fails to file any return or make any payment required by this section, or willfully files a false or fraudulent return, or willfully attempts in any manner to evade or defeat any such tax or payment thereof, there shall also be imposed as a penalty an amount equal to 50% of any tax (less any amounts paid on the basis of the false or fraudulent return) found due for the period to which the return related. The penalty imposed by this subdivision shall be collected as part of the tax, and shall be in addition to any other penalties provided by this section.
D. All payments received shall be credited first to penalties, next to interest and then to the tax due.
E. The amount of tax not timely paid, together with any penalty provided by this section, shall bear interest at the rate of 8% per annum from the time the tax should have been paid until paid. Any interest and penalty shall be added to the tax and be collected as part thereof.
F. In addition to any other penalties provided for hereunder, the Council may, subject to the provisions set forth in this section, suspend or revoke any license or permit issued by the city to the operator of the facility.
Subd. 10. Administration of Tax. The City Administrator shall administer and enforce the assessment and collection of the taxes imposed by this section. The City Administrator shall cause to be prepared blank forms for the returns and other documents required by this section and shall distribute the same throughout the city and furnish them on application, but failure to receive or secure them shall not relieve any person from any obligation required of him or her under this section.
Subd. 11. Examine Records. The City Administrator and those persons acting on behalf of the City Administrator authorized in writing by the City Administrator, may examine the books, papers and records of any operator in order to verify the accuracy of any return made, or if no return was made, to ascertain the tax as provided in this section. Every such operator is directed and required to give to the City Administrator or to his or her duly authorized agent or employee the means, facilities and opportunity for the examination and investigations as are hereby authorized.
Subd. 12. Contract With State. The City Administrator is authorized to confer with the Minnesota Commissioner of Taxation to the end that an agreement between the city and the Commissioner of Taxation may be entered into for the purpose of providing for the administration and collection of the taxes imposed by this section. Such an agreement shall not become effective until presented to the Council for its approval and, when so approved, the tax imposed by this section shall be collected and administered pursuant to the terms of the agreement.
Subd. 13. Violations. Any person who shall willfully fail to make a return authorized by this section 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 section after written demand for the payment, or who shall refuse to permit the City Administrator or any duly authorized agents or employees 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.
Subd. 14. Use of Proceeds. The 95% of the proceeds obtained from the collection of taxes pursuant to this section shall be used in accordance with M.S. § 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. The city may use up to 5% of the proceeds obtained hereunder to defray the costs and expenses of collection and administration of the tax. The city may contract with the person or organizations as it deems proper and necessary to establish and operate a tourism and convention bureau.
Subd. 15. Appeals.
A. Any operator aggrieved by any notice, order or determination made by the City Administrator under this section may file a petition for review of the notice, order or determination. The petition shall contain the name of the petitioner, the petitioner's address, the location of the lodging subject to the order, notice or determination and the grounds for a petition for review.
B. The petition shall be filed with the City Administrator within ten days after the notice, order or determination for which review is sought has been mailed or served upon the person requesting review.
C. Upon receipt of the petition, the City Administrator, or his or her designee, shall set a date for a hearing and give the petitioner at least five days prior written notice of the date, time and place of the hearing.
D. At the hearing, the petitioner shall be given an opportunity to show cause why the notice, order or determination should be modified or withdrawn. The petitioner may be represented by counsel of petitioner's choosing at petitioner's own expense.
E. The hearing shall be conducted by the City Administrator, or his or her 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.
F. The person conducting the hearing shall make written findings of fact and conclusions based upon this section and the evidence presented. The person conducting the hearing may affirm, reverse or modify the notice, order or determination made by the City Administrator.
G. Any decision rendered by the City Administrator pursuant to this subdivision may be appealed to the Council. A petitioner seeking to appeal a decision must file a written notice of appeal with the City Administrator within ten days after the decision has been mailed to the petitioner. The 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 Administrator, or his or her designee, upon the same standards as set forth in this section.