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HomeMy Public PortalAbout1990_04_24_O010OLeesBurg ORDINANCE NO. AN ORDINANCE: PRESENTED April 24, 1990 90-0-10 ADOPTED April 24, 1990 AMENDING THE CODE OF THE TOWN OF LEESBURG, VIRGINIA, AS AMENDED, BY THE ADDITION OF ARTICLE VI "DAILY SHORT-TERM RENTAL TAX" TO CHAPTER 17, "TAXATION AND LICENSES" IN ORDER TO IMPOSE A TAX ON TANGIBLE PERSONAL PROPERTY HELD FOR RENTAL AND OWNED BY AN INDIVIDUAL ENGAGED IN THE SHORT- TERM RENTAL BUSINESS WHEREAS, the Town of Leesburg under Section 3-1 of its Charter and Section 15.1-841, Code of Virginia (1950), as amended, is authorized to enact taxes on property and other lawful subjects as in the judgment of the Town Council are necessary to pay the debts, defray the expenses, accomplish the purposes and perform the functions of the town; and WHEREAS, under Section 58.1-3510.1, 3510.2 and 3510.3 of the Code of Virgirfia (1950), as amended, and the aforesaid authority, the town is anthorized to levy a tax upon daily short-term rental businesses within the town; and WHEREAS, this Council deems the levy of such a tax on daily short-term rental businesses necessary to pay the debts, defray the expenses, accomplish the purposes and perform the functions of the town; and WHEREAS, a public hearing was held on April 24, 1990, as required by the Town Code. THEREFORE, ORDAINED, by the Council of the Town of Leesburg in Virginia as follows: SECTION I. The Town Code is amended by adding an Article to be numbered Article VI, which said article reads as follows: ARTICLE VI - DAILY SHORT-TERM RENTAL T.~X Section 17-124. Definitions. For the purpose of this chapter, the following words and phases shall have the mearfings respectively ascribed to them by this section. (a) Affiliated - for the purposes of this Article shall mean any common ownership interest, in excess of five percent (5%), of any officers or partners in common with the lessor and lessee. -2- ORDINANCE - DAILY SHORT-TERM RENTAL TAX Certificate of Registration - shall refer to the anmml certificate issued by the Director of Finance to persons engaged in the short-term rental business in the Town of Leesburg who make application for such certificate pursuant to Section 17-126 of this Article; (c) Director of Finance - shall mean the Director of Finance of the Town of Leesburg, Virginia and any of the director's duly authorized deputies or agents; (d) Town - shall mean the Town of Leesburg, Virginia; (e) Daily Rental Property - shall mean all tangible personal property held for rental and owned by a person engaged in the short-term rental business as defined in Section 17- 124(i) of this Article, except trailers, as de£med in Section 46.1(33) of the Code of Virginia and other tangible personal property required to be licensed or registered with the Department of Game and Inland Fisheries, or the Department of Aviation; (f) Gross Proceeds - shall mean the total amount charged including penalties, late charges or interest, to each person for the rental of daily rental property from a short-term rental business with a valid certificate of registration, excluding any state and local sales taxes paid pursuant to Chapter 6 of Title 58.1 of the Code of Virgini~ Gross proceeds is the taxable basis for the daily rental tax; Gross Rental Receipts - shall mean all proceeds from rentals during a calendar year except the proceeds from the rental of personal property which also involves the provision of personal services for the operation of the personal property rented shall not be treated as gross receipts from rental. For purposes of this section the delivery and instsllation of tangible personal property shall not mean operation; (h) Person - shall mean and include individuA!~, fh~nS, partnerships, associations, corporations and combinations of individusl.~ of whatever form and character; (~) Short-term Rental Business - shall include any person engaged in the short-term rental of clAily rental property as defined in Section 17-124(e) of this Article 1F; (1) not less than eighty percent (80%) of the gross rental receipts of such business in any year from are transactions involving rental periods of ninety-two (92) consecutive days or less, including all extensions and renewals to the same person or a person affiliated with the lessor; and provided that; (2) any rental to a person affiliated with the lessor shall be treated as rental receipts but shall not quslWy for purposes of the eighty (80%) requirement. Section 17-125. Levy and Rate of Daily Rental Tax. Pursuant to Section 58.1-3510.1 of the Code of Virginia, and in addition to all other taxes of every kind now or hereafter imposed by law, the Town of Leesburg hereby levies and imposes on every person engaged in the short-term rental business a tax of one percent (1%) on the gross proceeds as defined in Section 17-124(f) of such business. Such tax shall be in addition to the tax levied pursuant to Section 58.1-605 of the Code of Virginia -3- ORDINANCE - DAILY SHORT-TERM RENTAL TAX Section 17-126. Exemptions from Daily Rental Tax. No tax hereunder shall be collected or payable on rentals to the Commonwealth of Virginia, to any political subdivision of the Commonwealth or to the United States. No tax hereunder shall be collected or payable for any rental of durable medical equipment as der'reed in Subdivision 22 of Section 58.1-608 of the Code of Virginia (c) All rentals exempt from the Virginia Sales and Use Tax pursuant to Chapter 6 of Title 58.1 of the Code of Virginia shall be exempt from this daily rental tax. (d) All exemptions from this tax ~_lalmed by short-term rental businesses at the time of payment of collected taxes shall be proved by rding of appropriate documentation as directed by the director. Section 17-127. Short-term Rental Business Application for Certificate of Registration. Every person engaging in the business of short-term rental as defmed in Section 17-124(i) of this Article, shall fde ann-ally for an application for a certificate of registration with the Director of Finance for each place of business in the town from which short-term rental business will be conducted by the applicant. Such application shall be £ded by January 31st of each year or within thirty (30) days of the beginning of a short-term rental business. The application shall be on a form prescribed by the Director of Finance and shall contain; (a) the name under which the applicant intends to operate the rental business; (b) the location in the town from which the rental business will be conducted as well as the location of the rental business headquarters; and (c) the ftgures for the previous year's business including the total gross receipts from all business, the total gross rental receipts and the total receipts from short-term daily rental property; (d) a list of all tangible personal property used for rental the previous year including a list of all property leased or licensed to the short-term rental business with the parne and address of the owner of such property; (e) such other information as the director may require; an oath by the person malrin~ the application or an officer or partner for such applicant that they are in fact qualified for tax treatment as a short-term rental business and they shall collect only those daily rental taxes due under the law and they shall remit all daily rental taxes collected to the town. ORDINANCE -4- - DAILY SHORT-TERM RENTAL TAX Section 17-128. Issuance and Effect of Certificate of Registration for Short-term Daily Rental Business. Upon approval of the application required by Section 17-127, by the director, a certificate of registration shall be issued from which a d~ily rental business is conducted in the town by the applicant. The certificate shall be conspicuously displayed at all times at the place of business for which it is issued. The certificate is not assigaable and shall be valid only for the person in whese name it is issued and the place of business designated. Section 17-129. Collection and Record-keeping. Every person engaged in the short-term rental business with a valid certificate or registration from the director shall collect this daily rental tax from the lessee of the daily rental property at the time of rental. The person collecting this tax shall maintain a record of all rental transactions for which this tax is collected, which record shall contain: (a) a description of the property rented; (b) the period of time for which the property was rented; (c) the name of the person to whom the property was rented; and (d) the mount charged for each rental including all late charges, penalties and interest. Section 17-130. Filing of Ouarterlv Tax Returns and Remittance of Tax. Each certified short-term rental business under the provisions of this Article shall Fie a quarterly tax return with the director, indicating for the quarters just past; (a) the total business gross receipts of the return Filer; (b) the gross proceeds derived from the short-term rental business; (c) all rental gross proceeds claimed to be exempt from the daily rental tax and documentation of each such claim; (d) the total daily rental tax due the town for the previous quarter's short-term rental business. Each return shall be accompanied by payment of the taxes due and collected by the certified, short-term rental b~,siness. The quarterly returns and payment of the tax shall be fded with the director on or before the 20th day of each of the months of April, July, October and January, representing, respectively, the gross proceeds and taxes collected during the preceding quarters ending March 31, June 30, September 30 and December 31. -5- ORDINANCE - DAILY SHORT-TERM RENTAL TAX Section 17-131. Taxes Held in Trust for the Town. The taxes required to be collected under this Article shall be deemed to be held in trust by the person required to collect such taxes until remitted as required in this Article. Section 17-132. Penalty for Failure or Refusal to Collect Tax. If any certified short-term rental business in the town fails or refuses to collect the tax imposed under this Article, their current Certificate of Registration shall be revoked and the business shall not be subject to the provision of Sections 58.1-3510, 58.1-3510.1 and 58.1-3706.C of the Virginia Code nor the provisions of Article VI of the Leesburg Town Code for the calendar year in which the certificate was revoked. Any payments of daily rental tax made previous to the revocation of the Certificate shall be refunded to the such lessees as can be identified with the balance being credited to the omitted assessment of personal property and business license taxes due to the change in taxable status of the short-term rental b, miness. Section 17-133. Penalties and Interest - Failure to File Return or Pay Over Taxes Collected. If any certified short-term rental business fails to fde the returns required by thi~ Section or fAil.~ or refuses to remit to the director the tax collected and paid under this Article at the time specified in this Article, there shall be added to such tax a penalty in the amount of ten percent (10%) of the tax past due or the sum of ten dollars ($10.00), whichever is greater. The assessment of such penalty shall not be deemed a defense to any crimirud prosecution for failure to comply with any of the requirements of this Article. Interest on late payments of any taxes due shall be added at the rate of ten percent (10%) per annum. Penalty and interest for failure to t'de the return or to pay the tax due pursuant to this Article shall be assessed on the first day following the day such quarterly return and tax payment is due. Section 17-134. Uncertified Renters Prohibited From Collecting Tax. No person renting any property or services to any other person shall collect from the lessee the d~ily rental tax authorized by this Article unless they have a valid Certificate of Registration issued for the current year by the director. Any taxes collected in a mariner not authorized by law shall be forfeited to the town. Section 17-135. Criminal Penalties. Persons violating or failing to comply with any provision of this Article shall be guilty of a Class 3 misdemeanor, except as provided below. If the amount of tax due and unpaid for any quarter exceeds $1,000.00 any person failing to £de a return or remit payment when due and charged with such failure on a criminal warrant shall be guilty of a Class i misdemeanor. ORDINANCE - DAILY SHORT-TERM RENTAL TAX Section 17-138. Failure to File for Certificate of Registration. In the event a newly established business or previously classified short-term rental business fails to fde for certification as a short-term rental business, they will relinquish the right to be classified as a short-term rental business and all tangible personal property will be subject to taxation under Section 58.1-3503 of the Code of Virginia. Section 17-137. Taxation of Rental Property That is Not Daily Rental Property. Except for daily rental passenger cars, rental property that is not classified as "daily rental property" shall be liable for taxation pursuant to Section 58.1-3503 of the 1950 Code of Virginia, as amended. SECTION II. This ordinance shall be in effect upon its passage. PASSED this 24th day of April Robert E. Sevila, Mayor Town of Leesburg ATTEST: Clerk of Council O:rental-tax