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(a) (1) Every operator receiving payment of charges from a customer shall collect the amount of the third-party tax from the customer. All amounts of third-party tax so collected shall be considered to be a special fund in trust for the City. For purposes of this Section, a person who otherwise qualifies as an operator under Section 6.2-13 shall not, by reason of the fact that the person is exempt from the tax, be exempted from the other obligations of an operator, including without limitation the obligation to collect and remit to the City all third-party taxes collected from non-exempt customers. An exemption from a third-party tax is enjoyed by the customer, not by the operator responsible for collecting and remitting such taxes. The operator may not exclude from taxation charges claimed to be exempt unless the operator has records of each transaction, which demonstrate:
(A) the basis for the claim of exemption, and
(B) that an amount was not in fact collected from the exempt customer as a tax.
(2) Where a customer is not the end user of a good or service subject to such tax, the customer shall be deemed an operator. The existence of such deemed operator shall not relieve any other operator of obligations under the Business and Tax Regulations Code, including without limitation the obligation to collect and remit the tax to the City. The liability of such deemed operator and any other operator for the tax, including applicable interest and penalties accrued through the date of payment, shall be joint and several; provided, the City shall be limited to only one satisfaction thereof.
(b) Third-party taxes shall be collected, to the extent practicable, at the same time as and along with the collection of charges made in accordance with the regular billing practice of the operator. If the amount paid by a customer is less than the full amount of the charges and tax which has accrued for the billing period, a proportionate share of both the charges and the tax shall be deemed to have been paid.
(c) Where a customer receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period. In all cases of transactions upon credit or deferred payment, the payment of tax to the Tax Collector may be deferred in accordance therewith, and the operator shall be liable therefor at the time and to the extent that such credits are paid or deferred payments are made in accordance with the rate of tax owing on the amount thereof.
(d) Any third-party tax imposed upon customers shall be deemed a debt owed by the customer to the City. Any such tax required to be collected from customers which has not been remitted to the Tax Collector shall be deemed a debt owed to the City by the person required to collect and remit such tax to the City.
(e) The Tax Collector shall have the power to adopt rules and regulations prescribing methods and schedules for the collection and payment of third-party taxes and such methods and schedules shall provide that the fractional part of 1 cent shall be disregarded unless it amounts to one-half of 1 cent or more, in which case the amount (determined without regard to the fractional part of 1 cent) shall be increased by 1 cent.
(f) The Tax Collector may, in the exercise of his or her discretion, require an operator under this Section to maintain trust accounts for deposit of third-party taxes collected from customers. The Tax Collector may direct an operator regarding how such trust accounts shall be created and maintained, and may prescribe the terms of such accounts. An operator's refusal to comply with the Tax Collector's direction regarding a trust account shall be grounds for revocation of a certificate of authority and/or of any license or permit to do business in San Francisco.
(g) When third-party taxes are not paid when due, or when there is any deficiency determination or jeopardy determination against an operator for third-party taxes, the Tax Collector may collect said liabilities, including interest and penalties accrued through the date of payment, from any person or persons the Tax Collector determines was responsible for performing the acts of collecting, accounting for, and remitting third-party taxes to the City and failed to do so, or who had the power to control the financial decision-making process by which the operator allocates funds to creditors in preference to the operator's obligation to remit third-party taxes to the City. When the person or persons responsible for the acts of collecting, accounting for, and remitting third-party taxes to the City cannot otherwise be determined, the Tax Collector may presume the President, Chief Executive Officer, and/or Chief Financial Officer of a corporation or any managing partner or member of an association to be a person responsible for performing such acts. The Tax Collector is authorized to name all such persons potentially responsible for performing such acts in a notice of deficiency determination or jeopardy determination and, in such case, the Tax Collector shall identify the person or persons responsible for such acts in the final decision. The final decision shall be based on the information available to the Tax Collector or based on the above presumption. The liability of such persons shall be joint and several with each other and with the operator, and shall be established in the manner provided for under this Article for other determinations.
(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 291-10, File No. 101099, App. 11/18/2010)