The city of San Francisco did not violate the law by applying its hotel tax to parking charges paid by hotel guests, the First District Court of Appeal Ruled on April 28.
In Angel Batt v. City and County of San Francisco, the plaintiff sought a refund of $7.70, which is the amount she paid in hotel taxes for a $55 parking charge during a one-night stay at the Ritz-Carlton Hotel in August 2005.
Ms. Batt, a resident of San Mateo County, noted that the hotel tax, adopted in 1961, imposes a levy of 14 percent "on the rent for every occupancy of a guest room in a hotel in the City and County." The city law defines "occupancy" as "The use or possession, or the right to the use or possession of any room or apartment in a hotel or the right to the use or possession of the furnishings or to the services and accommodations accompanying the use and possession of the room."
The city's tax collector/treasurer, who is authorized to promulgate regulations to administer the tax, promulgated a set of "Hotel Tax Guidelines" in December 2003, and advised hotel operators to apply the 14 percent tax on charges for parking, including valet services, for hotel guests.
Ms. Batt sued after her administrative claim for a refund was denied. Parking charges, she said, "are not 'rent for … occupancy of a guest room,' and the imposition of the Hotel Tax on such charges contravenes the (Hotel Tax) Ordinance and is unlawful." She noted that the city has a separate parking tax ordinance, which indicates that it did not intend the hotel tax to extend to parking, and added that the tax collector/treasurer had violated the state constitution by increasing the hotel tax without a vote of the electorate.
The Court of Appeal agreed with a trial court judge who rejected those claims. The portion of the hotel tax law referring to "services," the court said, "would appear to be that vast residuum of amenities offered or made available to guests, limited only by the imagination – or the nerve – of hoteliers to charge extra." The court listed other services that "would likely qualify" to be taxed, including barbering, spa, gym facilities, conference rooms, copying resources, specialized communication equipment and Wi-Fi access.
The court did not rule on whether the expansion of the tax without a vote of the people violated Proposition 218, because the issue was not raised in the trial court. While the appellate court had the discretion to consider the claim, it declined to do so, and added that even if it did consider the issue, "plaintiff would not prevail."
The opinion was written by Justice James Richman. Acting Presiding Justice Paul Haerle and Justice James Lambden concurred.
Ms. Batt previously attempted to file a class action on behalf of all hotel guests who paid the city's hotel tax on parking charges, but the courts held that an individual cannot maintain a class action for refund of a municipal tax absent statutory authorization.
Cal-TaxReports, May 10, 2010
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