Dana Point : Suit Seeks $120,000 in Hotel Bed Taxes

The city has filed a lawsuit against the Dana Point Hilton, seeking more than $120,000 in allegedly unpaid bed taxes.

The suit, filed Dec. 30 in Orange County Superior Court, claims that the nearly 2-year-old, 197-room hotel has only intermittently paid its share of taxes since April. Hotels in Dana Point are required by law to pay the city 10% of their room rental receipts as transient occupancy taxes--often called bed taxes.

About one-third of the city’s $10.25 million in annual revenues come from bed taxes from Dana Point’s 15 hotels and motels, according to a city spokeswoman. Bed taxes are due to the city within 20 days of the final day of every month, according to city law.

The city’s lawsuit alleges that the Hilton first failed to pay its complete share of taxes last April. During that month, the hotel paid only half of a total of $30,974.30 in taxes, the suit says.

Since then, the hotel has also failed to pay any taxes for the months of June, October and November, according to papers filed in court. Including interest and penalties, the hotel has accumulated a debt of more than $120,000 to the city, the lawsuit alleges.

A city spokesman said all attempts to negotiate with the hotel have failed. A meeting between hotel and city officials is scheduled for this week.

The hotel, at 34402 Pacific Coast Highway, is owned by the Rowland Heights-based Taj Development Corp., whose president and chief owner is Chandulal K. Patel.

Dana Point Hilton Manager Barry Dean said Monday he knew nothing of the suit or problems with bed taxes and referred questions to Patel. Patel couldn’t be reached for comment.