California Parking Occupancy Tax Bond – City of Los Angeles
Effective September 1, 2013 the City of Los Angeles is requiring a Parking Occupancy Tax (POT) Bond to be filed with the Department of Finance. The bond guarantees that the parking lot operator forward the taxes collected as part of the parking fee. The bond itself ranges from $5,000 to $700,000 depending on the volume of the parking lot. The bond must be filed by October 31, 2013.
This requirement came from a recommendation from the Commission on Revenue Efficiency where it was estimated that the city was losing up to $100 Million in revenue annually. While it will still be difficult to enforce the collection of taxes from cash transactions the city is moving towards non-cash systems such as acceptance of credit cards and revenue control equipment. The city will employ an auditing process funded by the additional revenue collected.
This bond is a type of financial guarantee, similar to the State of California Bond of Seller. It is carefully underwritten as this class of business can be risky. Credit will be the main underwriting criteria. IOA has a program in place selling this bond for as low as 1.5%. We have negotiated a plan for lesser qualified applicants as well. We will be able to approve bonds up to $50,000 without the furnishing of financial statements using our easy online application. Most bonds can be approved within 1 business day.