By admin 
A Woodland hotel was ordered to pay more than $1 million in back taxes and associated penalties, the Woodland City Council decided last week.
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The city determined that Shadow Oaks Hospitality Inc., which operates the Best Western Shadow Inn at 584 N. East St. in Woodland, missed more than 30 monthly payments to the city and a local tourism business improvement district between May 2023 and June 2026.
Woodland’s hotel tax was 10% of room rates, paid monthly. The Woodland Tourism Business Improvement District, created in 2022, charged hotels an additional 2%, also paid monthly. The city clerk and tax administrator determined that Shadow Oaks failed to make most of the required payments for nearly three years.
The city determined the company owed about $695,580 in unpaid taxes and assessments, more than $141,700 in late payment fees, $173,895 in fraud penalties and about $78,000 in interest. Under a tax-sharing agreement, about $124,000 of the total was owed to Yolo County, and the business improvement district was owed a similar amount, according to a staff report.
Hotel records showed the company collected hotel taxes from customers but made only three monthly payments between May 2023 and June 2026, one of which was returned for insufficient funds. No payments had been made since October 2023, Woodland Administrative Services Director Kim McKinney told the council.
The company also failed to consistently file required tax and assessment paperwork, filing some returns late and others not at all, McKinney said. The company did not file returns between January and July 2026, she said. For those months, “there are taxes due, but we have no information to calculate what those might be.”
The company repeatedly cited financial hardship in response to city inquiries, pointing to increased utility and lending costs as well as “general economic factors”, McKinney said.
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A company representative told the council that renovation problems left many rooms out of service for an extended period. At one point, about half of the hotel’s rooms could not be occupied, he said. Coupled with a loan interest rate that increased from about 6% to about 15%, the hotel was unable to pay its taxes, he said.
Shadow Oaks Hospitality’s attorney told the city that the company intended to make the 34 missed payments and did not dispute the city’s calculation of outstanding taxes and assessments. But the company filed an appeal last month, challenging the 25% fraud penalty levied by the city, leading to last week’s City Council hearing.
McKinney’s office said the fraud penalty was appropriate because the company collected the taxes from customers and knowingly withheld them from the city.
“It’s been almost three years since we received any payment whatsoever from the appellant,” McKinney said. “They walked through here the financial hardships they are facing and in doing so they basically admitted that they took the city’s money and spent it on other things.”
The city council agreed, voting 4-0 to uphold the assessed totals, including the fraud penalty.
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