Transient Occupancy Tax Audits, Transient Occupancy Tax Calendar Year 2017 Summary of Audits

COUNTY OF SAN LUIS OBISPO BOARD OF SUPERVISORS AGENDA ITEM TRANSMITTAL (1) DEPARTMENT (2) MEETING DATE (3) CONTACT/PHONE Auditor - Controller - 9/11/2018 Mark Maier 781-4267 Treasurer -Tax Collector Kerry Bailey 788-2979 (4) SUBJECT Report of the annual fiscal and compliance audits of establishments subject to the County Transient Occupancy Tax Ordinance for calendar year 2017. All Districts. (5) RECOMMENDED ACTION It is recommended that the Board receive the item and file. (6) FUNDING SOURCE(S) (7) CURRENT YEAR FINANCIAL (8) ANNUAL FINANCIAL (9) BUDGETED? N/A IMPACT IMPACT Yes $0.00 $0.00 (1 0) AGENDA PLACEMENT {X} Consent { } Presentation { } Hearing (Time Est. __) { } Board Business (Time Est. __) (11) EXECUTED DOCUMENTS { } Resolutions { } Contracts { } Ordinances {X } N/A (12) OUTLINE AGREEMENT REQUISITION NUMBER (OAR) (13) BUDGET ADJUSTMENT REQUIRED? BAR ID Number: N/A { } 4/5 Vote Required {X} N/A (14) LOCATION MAP (15) BUSINESS IMPACT STATEMENT? (16) AGENDA ITEM HISTORY N/A No { } N/A Date: january 23, 2018 (17) ADMINISTRATIVE OFFICE REVIEW N~J.S~ (18) SUPERVISOR DISTRICT(S) All Districts Page 1 of 3 COUNTY OF SAN LUIS OBISPO TO: Board of Supervisors FROM: james P. Erb, CPA, Auditor -Controller -Treasurer -Tax Collector DATE: 9/11/2018 SUBJECT: Report of the annual fiscal and compliance audits of establishments subject to the County Transient Occupancy Tax Ordinance for calendar year 2017. All Districts. RECOMMENDATION It is recommended that the Board receive the item and file. DISCUSSION The County currently collects a 9% Transient Occupancy Tax (TOT) and a 1% Tourism Marketing District (TM D) assessment from 1,554 lodging establishments throughout the unincorporated area. 1,117 establishments collect and remit an additional 2% San Luis Obispo County Business Improvement District (BID) assessment. The purpose of our audits was to determine the accuracy of the transient occupancy related amounts remitted to the County and to verify that the tax and assessments were calculated in accordance with Chapters 3.08 and 3.09 of the San Luis Obispo County Code and County Resolution 2015-153. To achieve our purpose, we reviewed the 2017 calendar year TOT returns submitted by 9 establishments and compared the returns to supporting documentation. In addition, we evaluated the existence and posting of current business licenses. Overall, we identified $5,420 in TOT, Bl D, TM D, penalties, and interest due to the County. We have attached our report and Summary of Monetary Audit Findings with details by establishment. We also found most establishments in compliance with obtaining and posting the required business licenses. Page 2 of 3 OTHER AGENCY INVOLVEMENT/IMPACT Individualized audit reports were issued to each establishment. The Auditor-Controller-Treasurer-Tax Collector is responsible for the enforcement of all audit findings and recommendations. FINANCIAL CONSIDERATIONS The County collected the following total amounts for calendar year 2017: Transient Occupancy Tax $9,510,398 Tourism Marketing District Assessment $1,883,991 Business Improvement District Assessment $1,054,650 RESULTS Annual fiscal and compliance reviews of TOT along with Bl D and TM D assessments are one of the tools used to monitor receipts of tax and assessments in the unincorporated area. Annual tax and assessment monitoring activities help maintain reporting accountability and contribute to the County's vision of a prosperous and well governed community. ATTACHMENTS 1. Summary of Audit Findings Transient Occupancy Tax CY 2017 Page 3 of 3 SUMMARY OF MONETARY AUDIT FINDINGS TAXABLE REVENUES AMOUNT DUE BY AUDIT FINDINGS %OF CALENDAR YEAR REPORTED TAXES/FEES TOTAL ESTABLISHMENT* AUDITED REPORTED AUDITED DIFFERENCE AMOUNT DUE /(REFUND) PENALTIES INTEREST DUE/(REFUND) 1 2017 769,314 769,316 2 0.0% - - - - 2 2017 404,986 404,986 - 0.0% - - - - 3 • 2017 24,209 42,091 17,882 73.9% 1,788 358 18 2,164 4 2017 72,713 99,215 26,502 36.4% 2,650 530 27 3,207 5 • 2017 217,293 217,273 (20) 0.0% - - - 6 2017 142,388 141,422 (966) -0.7% (116) - - (116) 7 2017 144,132 144,115 (18) 0.0% - - - - 8 2017 95,888 97,031 1! 142 1.2% 137 27 1 166 9 2017 37,488 37,118 (370) -1.0% "" - - - $1,908,411 $1,952,566 $44,154 $4,460 $915 $46 $5,420 * Establishment names have not been included for purposes of confidentially. • Establishment did not post the business license in a conspicuous place. oo No refund is recommended because the proprietor was unable to provide complete supporting documentation NOTE: The Transient Occupancy Tax (TOT) rate for 1/1/17 to 12/31/17 is 9%, the SLOCTBID rate is 2%, and the TMD is 1%. Page 1 of 1