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Home My WebLink AboutMarriott Vacations - Appeal Waiver of Penalty Late TOT CITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT Request: Consideration of Appeal relative to waiver of penalty resulting from late payment of Transient Occupancy Tax for the periods of May � 2013 and June 2013. Applicant: Marriott Vacations Worldwide Corporation (MVWC) 1200 Bartow Road Lakeland, FL 33801 Case No.: T.O.T. — Marriott Vacations Worldwide Submitted By: Paul S. Gibson, Finance Director Date: September 12, 2013 Contents: Application to Appeal Recommendation By Minute Motion, that the City Council consider an appeal relative to waiver of penalty resulting from late payment of Transient Occupancy Tax (TOT) for the periods of May 2013 and June 2013, and recommend that the City Manager determine the status of the waiver. Discussion As outlined and defined in the City of Palm Desert's Municipal Code Section 3.28, all operators located within the city are required to collect Transient Occupancy Tax (TOT) on behalf of the City, and remit said tax when it is due on the first day of the month following the close of each calendar month. According to Section 3.28.070, TOT becomes delinquent on the first day of the second succeeding calendar month following the close of the calendar month; i.e. the payment of tax for the month of January becomes due and payable on the first day of February, and delinquent on the first day of March. For the periods of May and June 2013, MVWC submitted their TOT payments on Tuesday, July 1 and Friday, August 2, respectively, resulting in the application of penalties and interest. MVWC requested a waiver, which was declined by the Finance Director. Pursuant to Section 3.28.100, MVWC has exercised their right to appeal the decision as Staff Report Consideration of Appeal - Marriott Vacations Worldwide Corporation September 12, 2013 Page 2 of 2 evidenced in the attached application. It should be noted that MVWC has agreed to pay the interest, and is only requesting a waiver of applicable penalties. In the interest of maintaining confidentiality regarding TOT payments, the amount is being withheld from this report, and can be disclosed only in a closed meeting. It is suggested that instead of speaking during the public Council meeting, a separate meeting be established between the operator and the Finance Director, City Manager, and City Attorney, all of whom serve on the Audit, Investment and Finance Committee. A tentative meeting has been scheduled in the City Manager's office on September 17, 2013 at 11:00 a.m., pending Council approval of this report. Fiscal Analvsis Due to the confidential nature of TOT taxes, the specific fiscal impact can only be disclosed during a closed meeting. Submitted by: Approval: aul S. Gi son, Finance Director J hn Wohlmuth, City Manager nmo . CITY COUNCILA�TION APPROVED ��._--.—DF,NTED 12ECENED OTHER ,�........---.. MEETII�IG DATE ��-��- `�� AY ES: �'��n 17�1 NOES: ��"' ABSENT: ABSTAIN: VCR[F[ED BY: Original on File with Ci Clerk's Office G:\Finance\Niamh Ortega\Staff Reports\SR-TOT late payment-Marriott Vacations Worldwide 082713.docx CITY OF PALM DESERT, CALIFORNIA _� . � APPLICATIC�N TO APPEAL DECISION OF THE FINANCB DEPA8IIffiiT (Name of Oetermini�g Body) - --- Case No. x.o.T — 1�larriott Vacation Date af Decision: Au�ust 1, 20�3 Worldvide t,�.., � _( Name of Appellant M.{�(��C��I' V��(fl�t(''fl WC;{`��N!��hone�.��4,�J} ��`7 r��, ��f- ��--7 IQ Address �Z�� {3Ca�"�`�4nf �fi�c'�y; �f t S,�l��, ��_ �� Description of _ , Appl' ation or Matter Considered:_ �eC� �.S� �7 r W�(1 V2t`� ��,-� ��(�„Ct ��1�Y . U( f. � " e.i_.� 1C�� `, l -,-� j ?.��f r---- ---r- � � Reason for Appeal(attach additionaJ sheets if necessary): � '�� ._r—(T1 � �' C 2.�fC( _" �,'"c} Ccs-- �r�t ,�e. �� .,�C � � m ..�� cm -n , �y x,,,� �:��'�C' �_ r��,. �° �'� �.. .� (Signature of Appellant) FOR OFFICIAL USE ONLY ,�. .,,,, �, Date Appeal Filed: ��'L� � `�``,�_ Fee Received: � �� , ^- _, " Treasurer's Receipt No.�'��r..�'��`�?�"� Received by: Date of Consideration by City Council or City O�cial: � Actton Takem Date: Rachelle D. Klassen, City Clerk � � .�. C Y T '� `{�-� l 'J M�4klas�m�WPds41WPDOCB�FORM3�sPptoaPDeal.wpa �A3rE��ys'��..,,�L�,� Rw8/29102 � � M 1\ f2 t`� I O T T RECEI�ED ..._�.._..__..W�_a_._.. __._ CIT Y CLER a 5 OFFICE � V 1� C 11�T�' 1 C� N '� � p t,L F�S D E.��.�_�'�". C A W O t� L D W I D E 2n13 At3G 15 Ah9 $� 28 August 13,2013 The City of Palm Desert c/o Ms.Grace Mendoza,Deputy City Clerk 73-510 Fred Waring Drive Palm Desert,CA 92260-2578 RE: Request for Penalty Waiver(Appeat); Late Filing/Late Payment Penalty Taxpayer: Marriott Vacations Wortdwide Corporation Account#: Permit#2673 Tax Type: Transient Occupancy Tax Tax Period: May 2013 and June 2Q13 Dear Ms. Mendoza: I hope all is well in the beautiful city of Palm Desert. The purpose of this letter is to appeal the decision to deny the above referenced taxpayer a waiver of penalties for the above referenced periods. The returns/payments for the periods May 2013 and June 2013 were mailed from our office on June 26 and July 2b,respectively. According to the return receipt,the May 2013 and June 20]3 returns/payments were delivered to your o�ce on July 1 and August 2,respectively(see Exhibit D attached). Although the returns were mailed and postmarked before the end of the month,they reached your office a day or so late and thus a 10%penalty, lus interest,was assessed. The total penalty and interest assessed is�of which�represents penalties.The taxpayer is prepared to pay the interest,but respectfully requests a waiver of penalties. Marriott Vacations Worldwide Corpotation("NNWC")spun-off from Marriott International in November 2011. As a result of this spin-off,Marriott International Business Services,the group previously responsible for MVWC's tax filings,recently began transitioning that work to MVWC who was in the infancy stages of building their own tax department. During the periods in question,we experienced some delays with respect to obtaining the information necessary to file a complete return. In addition,key personnel who oversaw the indirect tax compliance left the organization in early June 2013. It should be noted that MVWC had a"clean"filing history prior to these periods and we now have controls in place to ensure filings are timely in the future. Based on the circumstances explained above,we respectful(y request the City show leniency and waive the penalties assessed for the above referenced periods. . � , _ . ' � �� . ��' n�ar�rirai(vac��tion�;worinwide�.�;am Page 2 Ms. Grace Mendo�a We sincerety appreciate your consideration in this matter. Please feel free to contact me if you have any questions. Sin ely % DaNa � son Director, Indirect Taxes