Local Hotel Occupancy Tax and
Hospitality Consulting Service

OBJECTIVES AND METHODS

Allen, McGee & Associates LLC Local Hotel Occupancy Tax and Hospitality Consulting Program is intended to assist the local government in realizing all the of lodging tax revenue to which it is entitled through conducting annual analyses of returns and, when warranted, on-site examinations of records; providing annual reports and reflecting and projecting revenue trends; identifying any providers who should be subjected to field auditing or other scrutiny; offering ordinance and administrative enhancements as needed; and educating lodging providers to ensure appropriate collection and remittance of the lodging tax. The term of this agreement is three years, although performance shall be annual with respect to certain services as indicated herein below.

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LOCAL HOTEL OCCUPANCY TAX AND HOSPITALITY CONSULTING (HOT) PROGRAM:

ORDINANCE, RETURN AND ADMINISTRATION REVIEW SERVICES (INCEPTION OF CONTRACT):

•Review local government’s lodging tax ordinance, return form and administrative procedures;

•Recommend potential enhancements to better acquaint the lodging providers with their responsibilities in collecting and paying-over the tax, and to improve revenue generation and administration by the local government.

•Provide a written report to the local government, including suggestions for new ordinance language, form design and process development, as applicable; and

•Meet with the local government to discuss findings, and to identify any recommendations for further review.

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ANALYSIS & COMPLIANCE REVIEW SERVICES (ANNUALLY):

•Obtain and analyze lodging provider return information in the possession of the local government initially for the prior three (3) year period, thereafter annually for the prior year;

•Conduct unobtrusive collection of information on each property, including number of rooms, occupancy rate, physical condition, business dynamics, etc.;

•Provide a report to the local government on trend analysis to include projections for gross rent revenue and occupancy rates, and other information conducive to assessment of visitation.

•Perform discovery services designed to identify and locate lodging providers not properly registered with the local government and not appearing on the local government rolls as lodging tax remitters;

•Analyze lodging provider return information from the past three years in order to identify unusual or suspicious reporting and/or activities that warrant further review; and

•Provide a detailed report to the local government identifying lodging providers who require additional investigation or examination to determine their compliance with the local government’s lodging tax ordinance.

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FIELD AUDIT SERVICES (AS DEEMED NEEDED BY ANALYSIS):

•Perform on-site examinations of the records of those providers identified through analysis to warrant further investigation, but only as authorized by the local government;

•Provide local government staff with a detailed list of all records required to be made available by lodging providers for the further reviews, together with a draft engagement announcement letter to be sent to each lodging provider requiring examination;

•In coordination with local government staff, schedule and conduct reviews at the property locations of those providers identified and authorized for examination;

•Verify accuracy of filed lodging tax returns with daily and monthly activity summaries;

•Review a random sample of the daily and monthly summaries to determine if the daily summaries reconcile to the monthly summaries;

•Review bank statements to verify that deposits reconcile with the reported revenue on the lodging tax returns;

•Review exempted revenue for proper qualifying documentation;

•Review a random sample of exempted guest revenue and trace registration and/or other source documents to verify compliance with the local government ordinance;

•Where possible, compare the State and federal tax filings with the lodging tax returns;

•For each error/omission identified and confirmed, submit substantiating documentation to designated local government staff in order to facilitate collection of revenue due from lodging providers for prior periods;

•Coordinate with designated local government official(s) as necessary to review findings and recommendations;

•Provide assistance to local government in reviewing any matters submitted in extenuation and mitigation by lodging providers in contesting a deficiency determination; and

Prepare and document any changes to the review findings and provide revised tax, interest or penalty amounts due the local government.

•In no event shall Allen, McGee & Associates LLC be required to perform field audit services respecting more than one-third of the local government’s lodging properties in any one year.

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SEMINAR SERVICES (ONCE WHEN DESIRED BY LOCAL GOVERNMENT):

Conduct a seminar session with local government staff to present and discuss issues pertaining to lodging tax administration. Key topics for normal city staff sessions include applicable state and federal law, return analysis, deficiency determination techniques and collections. Local government may add select topics of local government concern to be reviewed at this session;

•Conduct a seminar session for local lodging providers to disseminate information intended to further the providers’ understanding of their duties and responsibilities under the local government’s lodging tax ordinance, their responsibilities for collections and record keeping, and to address any points requiring clarification in the lodging providers’ understanding of the local government’s lodging tax ordinance;

City staff shall be encouraged to attend both seminar sessions so as to become familiar with the issues and concerns facing local lodging providers and to interact directly with the lodging providers.

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COST

HOT PROGRAM

Allen, McGee & Associates LLC shall provide the Local Hotel Occupancy Tax and Hospitality Consulting Services for a three year term. Such Services shall be provided at an annual Fixed Fee per lodging property locating the LOCAL GOVERNMENT as per the following classification of lodging properties: give hundred dollars ($500) per standard lodging property, five hundred dollars ($500) per timeshare property, and two hundred fifty dollars ( $250) per bed and breakfast facility. The Fixed Fee shall be invoiced upon execution of this Agreement, and on the first and second anniversary date of the execution of this Agreement. Additionally, Allen, McGee & Associates LLC shall be entitled to Reimbursement of reasonable travel and other out-of-pocket expenses associated with the conduct of field audits and seminars. Such reimbursement shall be billed incrementally.

All reimbursable expenses shall receive prior approval from the LOCAL GOVERNMENT and shall be reimbursed at cost to Allen, McGee & Associates LLC.