(a) (1) A purchaser, transferee, or other person or entity attempting to obtain ownership of a property, the owner of which is required to collect the tax imposed pursuant to this chapter, may request the city, county, or city and county in which that property is located to issue a tax clearance certificate under this section.
(2) A city, county, or city and county that issues a tax clearance certificate under this section may charge an administrative fee to cover its costs in issuing the certificate.
(b) Within 90 days of receiving a request described in subdivision (a), a city, county, or city and county shall do either of the following:
(1) Issue the tax clearance certificate.
(2) (A) Request the current owner of the property to make available that owner’s transient occupancy tax records for the purpose of conducting an audit regarding transient occupancy taxes that may be due and owing from the owner of the property.
(B) (i) Complete the audit described in subparagraph (A) on or before 90 days after the date that the current or former owner’s records are made available to the auditing jurisdiction and issue a tax clearance certificate within 30 days of completing the audit.
(ii) If, after completing the audit, the city, county, or city and county makes a determination that the current owner’s records are insufficient to make a determination of whether transient occupancy taxes may be due and owing, the city, county, or city and county is not required to issue a tax clearance certificate as otherwise required by this subdivision. The city, county, or city and county shall, within 30 days of making that determination, notify the purchaser, transferee, or other person or entity that made the request that it will not issue a tax clearance certificate due to the insufficiency of the prior owner’s records.
(c) If a city, county, or city and county does not comply with subdivision (b), the purchaser, transferee, or other person or entity that obtains ownership of the property shall not be liable for any transient occupancy tax obligations incurred prior to the purchase or transfer of the property.
(d) For a tax clearance certificate issued under this section, all of the following apply:
(1) The certificate shall state the amount of tax due and owing for the subject property, if any.
(2) The certificate shall state the period of time for which it is valid.
(3) The purchaser, transferee, or other person or entity who obtains ownership of the property may rely upon the tax clearance certificate as conclusive evidence of the tax liability associated with the property as of the date specified on the certificate.
(e) Any purchaser, transferee, or other person or entity described in subdivision (a) who does not obtain a tax clearance certificate under this section, or who obtains a tax clearance certificate that indicates that tax is due and fails to withhold, for the benefit of the city, county, or city and county, sufficient funds in the escrow account for the purchase of the property to satisfy the transient occupancy tax liability, shall be held liable for the amount of tax due and owing on the property.
(f) This section may not be construed to relieve a property owner of transient occupancy tax obligations incurred when that owner owned the property.
(Added by Stats. 2004, Ch. 936, Sec. 2. Effective January 1, 2005.)
Last modified: October 25, 2018