Ojai council upholds tax determination against Sunnito Inn operator Cameron Lner, reduces penalties

The Ojai City Council on May 12 upheld a tax collector determination that assessed unpaid transient-occupancy tax against Cameron Lner, operator of the Sunnito Inn, while voting to reduce or waive penalties and interest.

City counsel Chelsea Ballot, representing staff, told the council the tax collector’s April 8, 2025 determination is supported by the city’s ordinance and a compliance audit by HDL. "The city is authorized under California Revenue and Taxation Code section 7280 to impose and enforce a transient occupancy tax on hotels located within the city," Ballot said, summarizing the legal framework and the audit process. Ballot said the city’s uniform transient occupancy code, as amended by Measure C, expressly treats cancellation fees, certain resort and parking fees and other fees tied to occupancy as "rent" subject to the 15% tax.

Appellant Cameron Lner contested that reading. Preserving a procedural objection about notice and record access, Lner argued the audit used trial-balance summaries rather than transaction-level folios and that deposit forfeiture and many ancillary fees are not consideration for occupancy. "I'm here because this has become a matter of principle, process, and the rule of law," Lner said, urging the council to require clearer evidence and to treat uncollected transient tax as the transient’s debt unless the operator actually collected it.

Public commenters urged clearer rules for local businesses. A local resident, Larry Stangled, told the council the ordinance and audit approach appear ambiguous and recommended that the city "clean up the law" so operators know which fees to tax.

HDL audit manager Carrie Callaway described the audit practice used for the Sunnito review, saying auditors request folios and use sampling techniques to reconcile reported room revenue with tax filings. City counsel said the appellant had opportunities to provide folios and supporting documents during the audit and prior hearings.

After debate about statutory text and fairness, council members voted to uphold the tax collector’s April 8, 2025 determination that unpaid TOT for the audited period was properly assessed against the operator but agreed to reduce or waive assessed penalties and interest as a compromise. The motion carried by a majority vote; Council member Rule recorded a dissenting vote. Council members asked staff to prepare clearer written guidance about which fees should be treated as taxable rent under the municipal code and Measure C.

The public hearing record, administrative audit reports and exhibits will remain part of the city file. The decision closes the Sunnito appeal but council asked staff to return with clarifying guidance for hotels to prevent similar disputes.

What’s next: council directed staff to provide clearer written guidance to hoteliers on taxable items and to consider whether ordinance clarifications are warranted before future enforcement.