Title 5
BUSINESS LICENSES, TAXES AND REGULATIONS

Chapters:

5.04 Business Licenses

5.05 Business and Occupation Tax

5.06 Administrative Provisions for Business and Occupation Taxes

5.08 Utilities Tax

5.10 Commercial Parking Tax

5.12 Amusement Games

5.16 Cabarets

5.20 Gambling

5.24 Games of Skill

5.28 Jukeboxes

5.32 Sale and Delivery of Kegs of Malt Beverages

5.36 Sale of Fireworks

5.40 Temporary Stationary Businesses

5.44 Closing Hours of Businesses

Chapter 5.04
BUSINESS LICENSES¹

Sections:

5.04.010 Purpose.

5.04.020 Definitions and presumption.

5.04.030 License required.

5.04.040 License – Application and issuance.

5.04.050 License – Nontransferable.

5.04.055 Standards of conduct.

5.04.060 License – Suspension, denial or revocation.

5.04.070 License – Multiple locations.

5.04.080 Exempt activities.

5.04.090 Payment of license fees.

5.04.190 License – Fee additional to others.

5.04.200 License fee – Collection.

5.04.210 Over or underpayment of fees.

5.04.220 Appeal procedure.

5.04.230 License – Confidentiality of applications.

5.04.240 Duties of the director.

5.04.250 Civil penalty.

5.04.260 Violation – Penalty.

5.04.270 Successor liability.

5.04.280 Limitations on license.

5.04.010 Purpose.

The provisions of this chapter are an exercise of the police and taxation powers of the city to license for revenue purposes and to govern the privilege of engaging in business in the city. (Ord. 99-28 § 1, 1999)

5.04.020 Definitions and presumption.

A. This chapter incorporates by reference all definitions set forth in Chapter 82.04 RCW, hereafter amended, except where a conflicting definition is stated in this chapter.

B. “Director” means the director of finance and administrative services for the city.

C. Businesses or persons soliciting business within the city or using either a business telephone number or business address within the city shall be presumed to be engaged in business within the city. (Ord. 99-28 § 1, 1999)

5.04.030 License required.

Every person who engages in business activities within the city shall apply for and obtain from the director a license for the privilege of engaging in business within the city for each calendar year or portion thereof. The fee for the business license shall be in the amount established by resolution of the city council. No person shall engage in any business for which a business license is required under this chapter without being so licensed, regardless of the amount of income received, except as otherwise provided in this title. (Ord. 99-28 § 1, 1999)

5.04.040 License – Application and issuance.

A. Business licenses must be obtained and the fee paid before a business commences operation within the city. The license fee shall be considered delinquent if not paid when due.

B. The business license required by this chapter shall expire on December 31st of the year for which it is issued. A new license shall be required for each year and the fee paid on or before the last day of February.

C. Applications for business licenses shall be made to and issued by the finance director on forms provided by the city, which shall state the residence of the applicant, the nature of each business activity in which the applicant desires to engage, and the place where the applicant proposes to conduct its business. If the director finds that the application is complete and correct, that all required fees have been paid, and all laws and requirements have been complied with, the business license shall be issued.

D. The director shall, when appropriate, refer applications to the department of planning and community development, the department of public safety, the Bainbridge Island fire department, and other governmental agencies for their review.

E. Multiple business activities under common ownership may be conducted under a single license.

F. Neither the filing of an application for a license, or the renewal thereof, nor the payment of any application or renewal fee, shall authorize a person to engage in or conduct a business until such license has been granted or renewed. (Ord. 99-28 § 1, 1999)

5.04.050 License – Nontransferable.

The business license issued under this chapter shall be personal and nontransferable, and shall at all times be posted in the place of business for which it is issued. Where a licensee’s place of business is changed, the licensee shall return the license to the director and a new license shall be issued for the new place of business without charge. No licensee shall allow another person to operate a business under, or display, the license, nor shall another person operate under or display the license. (Ord. 99-28 § 1, 1999)

5.04.055 Standards of conduct.

Every licensee under this chapter shall:

A. Permit reasonable inspections of the business premises by governmental authorities for the purpose of enforcing the provisions of this chapter;

B. Comply with all federal, state and city statutes, laws, ordinances and regulations relating to the business premises and the conduct of the business thereon;

C. Refrain from unfair or deceptive acts or practices, or consumer fraud, in the conduct of the business and avoid maintaining a public nuisance on the business premises;

D. Refrain from operating the business after expiration of a license or during the period that the license may be suspended or revoked. (Ord. 99-28 § 1, 1999)

5.04.060 License – Suspension, denial or revocation.

A. A business license may be suspended, denied or revoked by the city without notice for any of the following causes:

1. The licensee or any of its officers, directors, agents or employees while acting within the scope of their duties has violated or failed to keep the building, structure or equipment of the licensed premises in compliance with applicable health, building, fire or safety laws, ordinances or regulations;

2. The licensee or any of its officers, directors, agents or employees while acting within the scope of their duties has violated or failed to comply with the standards of conduct specified in this chapter;

3. The license was procured by fraud or false representation of fact;

4. The licensee or any of its officers, directors, agents or employees has been convicted of a crime involving the business;

5. The license was issued through mistake or inadvertence.

B. A business license may be revoked on 20 days’ written notice to the licensee where the licensee fails to pay the annual license fee and/or applicable business and occupation tax, together with any penalties due thereon, within six months after the fee or tax is due and owing. The licensee shall have the right to full reinstatement of the business license, if, within 10 days of such revocation, the licensee pays all amounts due and owing.

C. Upon suspension, denial or revocation of a license, the director shall, by certified mail, give written notice of such action to the applicant or licensee, including a written report summarizing the complaints, objections and/or information received and considered by the director and further stating the reason for the action. Notice mailed to the mailing address on the application or most recent renewal shall be deemed received three days after mailing. Appeal of the director’s decision shall follow the appeal procedures set forth in this chapter. (Ord. 2004-17 § 3, 2004: Ord. 99-28 § 1, 1999)

5.04.070 License – Multiple locations.

If business is transacted by one person at two or more separate locations within the city, a separate license shall be obtained and displayed in each location at which business is transacted. (Ord. 99-28 § 1, 1999)

5.04.080 Exempt activities.

The following activities shall be exempt from the licensing provisions of this chapter:

A. Nonprofit activities carried on by religious, charitable, educational, benevolent, fraternal or social organizations which have been determined by the Internal Revenue Service of the United States to be exempt from the payment of income tax;

B. The exercise of governmental functions performed by any instrumentality of the United States, the state of Washington, or any political subdivision thereof.

C. Farmers or gardeners selling their own farm products raised and grown exclusively upon lands owned or occupied by them;

D. Garage sales conducted on residential premises in compliance with this code;

E. The mere delivery of goods or services to the customer or client by businesses where the sale occurred on business premises outside of the city, and was the only event occurring within the city except that the performance of contracting or subcontracting services is not an exempt activity; or

F. Any business activity which is owned and operated solely by a person under the age of 18, and which does not generate a gross income of more than $2,500 per year. (Ord. 99-28 § 1, 1999)

5.04.090 Payment of license fees.

A. There shall be a license fee imposed for the privilege of doing business as set by resolution of the city council.

B. Payment of the fee imposed by this chapter shall be due on or before the commencement of business and renewed on or before the last day of February of each successive year.

C. On or before the due date, every person required to pay a license fee or a tax as set forth by this chapter shall file with the city a written return, upon such form and including such information as the director shall require, together with the payment of the amount of the fee. (Ord. 99-28 § 1, 1999)

5.04.190 License – Fee additional to others.

The license imposed and levied by this chapter shall be in addition to any license fee or tax imposed or levied under any law or other ordinance of the city, except as otherwise expressly provided. (Ord. 99-28 § 1, 1999)

5.04.200 License fee – Collection.

The license fee imposed by this chapter, and all penalties thereon, shall constitute a debt to the city, and may be collected by court proceedings in the same manner as any other debt in like amount, which remedy shall be in addition to all other existing remedies. Any judgment entered in favor of the city shall include an award to the city of all court and collection costs including attorneys’ fees. Amounts delinquent more than 90 days may be assigned to a third party for collection, in which case the amount of any collection charges shall be in addition to all other amounts owed. Amounts due shall not be considered paid until the city has received good funds for the full amount due or has discharged the amount due and not paid. (Ord. 99-28 § 1, 1999)

5.04.210 Over or underpayment of fees.

In the event that any person makes an overpayment, and within two years of the date of such overpayment makes application for a refund or credit, the person’s claim shall be allowed and a refund made by the city upon determination by the director that no other sums are owed by the person to the city. If a person determines that the fees have been underpaid and without notice by any party pays the amount due to the city, the amount underpaid and corrected by the person shall not be subject to penalty. (Ord. 99-28 § 1, 1999)

5.04.220 Appeal procedure.

A person who has had a license suspended, denied or revoked or who has been aggrieved by the amount of the license fee determined to be due to the city by the director under the provisions of this chapter may appeal to the city council from such determination by filing a written notice of appeal with the city clerk within 20 days from the date on which such person is given notice of the license fee. The city council or a committee of the city council shall, as soon as practicable, fix a time and place for the hearing for such appeal. Notice of the hearing shall be given to the appellant by certified mail at least five days prior to the date of the hearing. The licensee may appear at the hearing and be heard in opposition to such denial, suspension or revocation or to the fee imposed. The decision of the city council or its committee shall be announced at the conclusion of the hearing and shall be final, subject only to a writ of certiorari being filed with the Kitsap County superior court within 14 days following the date of the decision of the city council or a committee of the city council. (Ord. 99-28 § 1, 1999)

5.04.230 License – Confidentiality of applications.

The applications made to the city pursuant to this chapter shall be made public, and shall be subject to inspection excepting only that emergency telephone numbers shall not be made public except where required by law. (Ord. 99-28 § 1, 1999)

5.04.240 Duties of the director.

A. The director shall keep full and accurate records of all funds received under the provisions of this chapter. Upon receipt of any license fee or penalties collected under the provisions of this chapter, the director shall deposit the amounts collected into the current expense fund of the city.

B. In order to carry out the provisions of this chapter, the director shall have the power to adopt, publish and enforce rules and regulations consistent with this chapter. (Ord. 99-28 § 1, 1999)

5.04.250 Civil penalty.

In the event that any person fails to pay the license fee imposed by this chapter within 15 days of the due date, a civil penalty shall be imposed in the amount of 10 percent of the delinquent license fee plus any previously assessed and unpaid penalties under this chapter. For the purposes of calculating the penalty, each month that the amounts owed under this chapter are due and unpaid shall be considered a separate violation subject to penalty. Civil penalties shall be limited to not more than amount of the full license fee for each year for which a license is required and shall not commence until the business has been notified of the need for a license and failed to get one within thirty days. A fraction of a month shall be deemed a full month. In the event that a penalty has been wrongfully collected, the director shall refund the penalty. (Ord. 99-28 § 1, 1999)

5.04.260 Violation – Penalty.

A. It shall be a violation of this chapter:

1. For a person required to obtain a business license under this chapter to fail or refuse to secure the business license or to fail to pay the fee imposed;

2. For a person to make any false representation in connection with application for a business license under this chapter;

3. For a person to evade payment of the fee or any part thereof;

4. For a person to fail to appear and/or refuse to testify in response to a subpoena issued hereto;

5. For a person to testify falsely upon any investigation of the correctness of a return, or upon the heading of any appeal; or

6. For a person to in any manner hinder or delay the city or any of its officers in carrying out the provisions of this chapter.

B. It shall be unlawful for any person to conduct business within the city limits when not in compliance with this chapter.

C. A person violating any of the provisions of this chapter, upon conviction thereof, shall be punished by a fine of not more than $500.00 or by imprisonment for not more than six months, or by both such fine and imprisonment. Each such person is guilty of a separate offense for each and every day during the portion of which any violation of any provision of this chapter is committed, continued or permitted by any such person and he is punishable accordingly. (Ord. 99-28 § 1, 1999)

5.04.270 Successor liability.

A. Whenever any person required to be licensed by this chapter quits business, or sells out, exchanges or otherwise disposes of his/her business or stock of goods, any license fees or penalty payable to the city shall immediately become due and payable, and such person shall, within 30 days, file the required forms and pay the fees due. Any person who becomes a successor to such person shall become liable for the full amount of the license fees and penalties due and owing and shall withhold from the purchase price a sum sufficient to pay any amount due from the seller until such time as the seller shall produce a receipt from the city clerk showing payment in full of any amount due or a certificate that no license fees are due. The payment of the fees by the successor shall, to the extent thereof, be deemed a payment upon the purchase price, and if such payment is greater than the purchase price, the amount of the difference shall become a debt due such successor from the seller. The successor’s liability shall be limited to the purchase price or the fair market value of the business if no cash transaction took place.

B. No successor shall be liable for any license fees due from the person from whom he/she has acquired a business or stock of goods if he/she gives written notice to the city clerk or director of such acquisition, and no assessment is issued by the director within six months of receipt of such notice against the former operation of the business and a copy of the assessment mailed to the successor.

C. Each person’s account will remain on an active status and be subject to all license fees and penalties until such time as the director is notified in writing that the person has discontinued business activity within the city. (Ord. 99-28 § 1, 1999)

5.04.280 Limitations on license.

Notwithstanding any provisions to the contrary, a license issued under this chapter shall not be issued to any person who uses or occupies or proposes to use or occupy any real property or otherwise conducts or proposes to conduct any business in violation of the provisions of an ordinance of the city of Bainbridge Island, specifically including the city’s zoning laws, or of the laws of the state of Washington. The granting of a business license shall in no way be construed as permission or acquiescence in a prohibited activity or other violation. Because the issuance of a license under this chapter specifically denies the applicant authority to violate any law or regulation, the city shall not be held liable for the actions of any licensed business by virtue of having issued a license to conduct business. (Ord. 99-28 § 1, 1999)

Chapter 5.05
BUSINESS AND OCCUPATION TAX²

Sections:

5.05.010 Exercise of revenue license power.

5.05.020 Administrative provisions.

5.05.030 Definitions.

5.05.050 Imposition of the tax – Tax or fee levied.

5.05.060 Doing business with the city.

5.05.070 Multiple activities credit when activities take place in one or more cities with eligible gross receipt taxes.

5.05.075 Deductions to prevent multiple taxation of transactions involving more than one city with an eligible gross receipts tax.

5.05.090 Exemptions.

5.05.100 Deductions.

5.05.120 Tax part of overhead.

5.05.130 Severability clause.

5.05.010 Exercise of revenue license power.

The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue. The provisions of this chapter are subject to periodic statutory or administrative rule changes or judicial interpretations of the ordinances or rules. The responsibility rests with the licensee or taxpayer to reconfirm tax computation procedures and remain in compliance with this chapter and the city code. (Ord. 2004-16 § 1, 2004)

5.05.020 Administrative provisions.

Except as expressly stated to the contrary herein, the administrative provisions contained in Chapter 5.06 BIMC shall be fully applicable to the provisions of this chapter. (Ord. 2004-16 § 1, 2004)

5.05.030 Definitions.

In construing the provisions of this chapter, the following definitions shall apply. This chapter incorporates by reference all definitions set forth in Chapter 82.04 RCW, as hereafter amended, except where a conflicting definition is stated in this chapter. Words in the singular number shall include the plural, and the plural shall include the singular.

“Agricultural product” means any product of plant cultivation or animal husbandry including, but not limited to: a product of horticulture, grain cultivation, vermiculture, viticulture, or aquaculture as defined in RCW 15.85.020; plantation Christmas trees; turf; or any animal including but not limited to an animal that is a private sector cultured aquatic product as defined in RCW 15.85.020, or a bird, or insect, or the substances obtained from such an animal. “Agricultural product” does not include animals intended to be pets.

“Business” includes all activities engaged in with the object of gain, benefit, or advantage to the taxpayer or to another person or class, directly or indirectly.

“Business and occupation tax” or “gross receipts tax” means a tax imposed on or measured by the value of products, the gross income of the business, or the gross proceeds of sales, as the case may be, and that is the legal liability of the business.

“Commercial or industrial use” means the following uses of products, including byproducts, by the extractor or manufacturer thereof:

1. Any use as a consumer; and

2. The manufacturing of articles, substances or commodities.

“Eligible gross receipts tax” means a tax which:

1. Is imposed on the act or privilege of engaging in business activities within BIMC 5.05.050;

2. Is measured by the gross volume of business in terms of gross receipts and is not an income tax or value added tax;

3. Is not, pursuant to law or custom, separately stated from the sales price;

4. Is not a sales or use tax, business license fee, franchise fee, royalty or severance tax measured by volume or weight, or concession charge, or payment for the use and enjoyment of property, property right or a privilege; and

5. Is a tax imposed by a local jurisdiction, whether within or without the state of Washington, and not by a country, state, province, or any other nonlocal jurisdiction above the county level.

Engaging in Business.

1. The term “engaging in business” means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business. Without being all-inclusive, any one of the following activities conducted within the city by a person, or its employee, agent, representative, independent contractor, broker or another acting on its behalf, constitutes “engaging in business” and requires a person to register and obtain a business license:

a. Owning, renting, leasing, maintaining, or having the right to use, or using, tangible personal property, intangible personal property, or real property permanently or temporarily located in the city;

b. Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city;

c. Soliciting sales;

d. Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance;

e. Providing technical assistance or service, including quality control, product inspections, warranty work, or similar services on or in connection with tangible personal property sold by the person or on its behalf;

f. Installing, constructing, or supervising installation or construction of real or tangible personal property;

g. Soliciting, negotiating, or approving franchise, license, or other similar agreements;

h. Collecting current or delinquent accounts;

i. Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials;

j. Providing disinfecting and pest control services, employment and labor pool services, home nursing care, janitorial services, appraising, landscape architectural services, security system services, surveying, and real estate services including the listing of homes and managing real property;

k. Rendering professional services such as those provided by accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball clubs and other sports organizations, chemists, consultants, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, veterinarians;

l. Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings;

m. Training or recruiting agents, representatives, independent contractors, brokers or others, domiciled or operating on a job in the city, acting on its behalf, or for customers or potential customers;

n. Investigating, resolving, or otherwise assisting in resolving customer complaints;

o. In-store stocking or manipulating products or goods sold to and owned by a customer, regardless of where sale and delivery of the goods took place;

p. Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf; and

q. Accepting or executing a contract with the city, irrespective of whether goods or services are delivered within or without the city, or whether the person’s office or place of business is within or without the city.

The activities listed in this subsection are illustrative only and are not intended to narrow the definition of “engaging in business.” If an activity is not listed in this subsection, whether it constitutes “engaging in business” in the city shall be determined by considering all the facts and circumstances and applicable law.

2. A person, or its employee, agent, representative, independent contractor, broker or another acting on the person’s behalf, shall not be deemed to be “engaging in business” within the city, and shall not be required to register and obtain a business license and pay business and occupation tax if that person or its employee, agent, representative, independent contractor, broker or another acting on the person’s behalf engages in no other activities in or with the city but the following:

a. Meeting with suppliers of goods and services as a customer;

b. Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions;

c. Attending meetings, such as board meetings, retreats, seminars, and conferences, or other meetings wherein the person does not provide training in connection with tangible personal property sold by the person or on its behalf;

d. Renting tangible or intangible property as a customer when the property is not used in the city;

e. Attending, but not participating in, a “trade show” or “multiple vendor event.” Persons participating at a trade show shall review the city’s trade show or multiple vendor event ordinances;

f. Conducting advertising through the mail; and

g. Soliciting sales by phone from a location outside the city.

3. A seller located outside the city merely delivering goods into the city by means of common carrier shall not be considered to be “engaging in business” in the city and shall not be required to register and obtain a business license; provided, that it engages in no other business activities in the city.

The city expressly intends that “engaging in business” shall include any activity sufficient to establish nexus for purposes of applying the tax under the law and the Constitutions of the United States and the state of Washington. Nexus is presumed to continue as long as the taxpayer benefits from the activity that constituted the original nexus generating contact or subsequent contacts.

“Extracting” means the activity engaged in by an extractor and is reportable under the extracting classification.

“Farmer” means any person engaged in the business of growing or producing, upon the person’s own lands or upon the lands in which the person has a present right of possession, any agricultural product whatsoever for sale. “Farmer” does not include a person using such products as ingredients in a manufacturing process, or a person growing or producing such products for the person’s own consumption. “Farmer” does not include a person selling any animal or substance obtained therefrom in connection with the person’s business of operating a stockyard or a slaughter or packing house. “Farmer” does not include any person in respect to the business of taking, cultivating, or raising timber.

“Gross income of the business” means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.

“Gross proceeds of sales” means the value proceeding or accruing from the sale of tangible personal property or for services rendered, without any deduction on account of the cost of property sold, the cost of materials used, labor costs, interest, discount paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.

Manufacturer, To Manufacture.

1. “Manufacturer” means every person who, either directly or by contracting with others for the necessary labor or mechanical services, manufactures for sale or for commercial or industrial use from the person’s own materials or ingredients any products. When the owner of equipment or facilities furnishes, or sells to the customer prior to manufacture, materials or ingredients equal to less than 20 percent of the total value of all materials or ingredients that become a part of the finished product, the owner of the equipment or facilities will be deemed to be a processor for hire, and not a manufacturer. A business not located in the city that is the owner of materials or ingredients processed for it in the city by a processor for hire shall be deemed to be engaged in business as a manufacturer in the city.

2. “To manufacture” means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials or ingredients so that as a result thereof a new, different or useful product is produced for sale or commercial or industrial use, and shall include:

a. The production of special-made or custom-made articles;

b. The production of dental appliances, devices, restorations, substitutes, or other dental laboratory products by a dental laboratory or dental technician;

c. Crushing and/or blending of rock, sand, stone, gravel, or ore; and

d. The producing of articles for sale or for commercial or industrial use from raw materials or prepared materials by giving such materials, articles, and substances of trade or commerce new forms, qualities, properties or combinations including, but not limited to, such activities as making, fabricating, processing, refining, mixing, slaughtering, packing, aging, curing, mild curing, preserving, canning, and the preparing and freezing of fresh fruits and vegetables.

“Manufacturing” means the activity conducted by a manufacturer and is reported under the manufacturing classification.

“Person” means any individual, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint venture, club, company, joint stock company, business trust, municipal corporation, political subdivision of the state of Washington, corporation, limited liability company, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise and the United States or any instrumentality thereof.

“Retailing” means the activity of engaging in making sales at retail and is reported under the retailing classification.

“Retail service” shall include the sale of or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admission, and other service emoluments however designated, received by persons engaging in the following business activities:

1. Amusement and recreation services including but not limited to golf, pool, billiards, skating, bowling, swimming, bungee jumping, ski lifts and tows, basketball, racquetball, handball, squash, tennis, batting cages, day trips for sightseeing purposes, and others, when provided to consumers. “Amusement and recreation services” also includes the provision of related facilities such as basketball courts, tennis courts, handball courts, swimming pools, and charges made for providing the opportunity to dance. The term “amusement and recreation services” does not include instructional lessons to learn a particular activity such as tennis lessons, swimming lessons, or archery lessons;

2. Abstract, title insurance, and escrow services;

3. Credit bureau services;

4. Automobile parking and storage garage services;

5. Landscape maintenance and horticultural services but excluding:

a. Horticultural services provided to farmers; and

b. Pruning, trimming, repairing, removing, and clearing of trees and brush near electric transmission or distribution lines or equipment, if performed by or at the direction of an electric utility;

6. Service charges associated with tickets to professional sporting events; and

7. The following personal services: physical fitness services, tanning salon services, tattoo parlor services, steam bath services, Turkish bath services, escort services, and dating services.

“Retail service” shall also include the renting or leasing of tangible personal property to consumers and the rental of equipment with an operator.

Sale, Casual or Isolated Sale.

1. “Sale” means any transfer of the ownership of, title to, or possession of property for a valuable consideration and includes any activity classified as a “sale at retail,” “retail sale,” or “retail service.” It includes renting or leasing, conditional sale contracts, leases with option to purchase, and any contract under which possession of the property is given to the purchaser but title is retained by the vendor as security for the payment of the purchase price. It also includes the furnishing of food, drink, or meals for compensation whether consumed upon the premises or not.

2. “Casual or isolated sale” means a sale made by a person who is not engaged in the business of selling the type of property involved on a routine or continuous basis.

Sale at Retail, Retail Sale.

1. “Sale at retail” or “retail sale” means every sale of tangible personal property (including articles produced, fabricated, or imprinted) to all persons irrespective of the nature of their business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers, other than a sale to a person who presents a resale certificate under RCW 82.04.470 and who:

a. Purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person;

b. Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates real or personal property of or for consumers, if such tangible personal property becomes an ingredient or component of such real or personal property without intervening use by such person;

c. Purchases for the purpose of consuming the property purchased in producing for sale a new article of tangible personal property or substance, of which such property becomes an ingredient or component or is a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale;

d. Purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon; or

e. Purchases for the purpose of providing the property to consumers as part of competitive telephone service, as defined in RCW 82.04.065. The term shall include every sale of tangible personal property which is used or consumed or to be used or consumed in the performance of any activity classified as a “sale at retail” or “retail sale” even though such property is resold or utilized as provided in subsection (1)(a), (1)(b), (1)(c), (1)(d), or (1)(e) of this definition following such use.

2. “Sale at retail” or “retail sale” also means every sale of tangible personal property to persons engaged in any business activity which is taxable under BIMC 5.05.050.A.7.

3. “Sale at retail” or “retail sale” shall also include the sale of or charge made for tangible personal property consumed and/or for labor and services rendered in respect to the following:

a. The installing, repairing, cleaning, altering, imprinting, or improving of tangible personal property of or for consumers, including charges made for the mere use of facilities in respect thereto, but excluding charges made for the use of coin-operated laundry facilities when such facilities are situated in an apartment house, rooming house, or mobile home park for the exclusive use of the tenants thereof, and also excluding sales of laundry service to nonprofit health care facilities, and excluding services rendered in respect to live animals, birds and insects;

b. The constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for consumers; including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, and shall also include the sale of services or charges made for the clearing of land and the moving of earth excepting the mere leveling of land used in commercial farming or agriculture;

c. The charge for labor and services rendered in respect to constructing, repairing, or improving any structure upon, above, or under any real property owned by an owner who conveys the property by title, possession, or any other means to the person performing such construction, repair, or improvement for the purpose of performing such construction, repair, or improvement and the property is then reconveyed by title, possession, or any other means to the original owner;

d. The sale of or charge made for labor and services rendered in respect to the cleaning, fumigating, razing or moving of existing buildings or structures, but shall not include the charge made for janitorial services; and for purposes of this section the term “janitorial services” shall mean those cleaning and caretaking services ordinarily performed by commercial janitor service businesses including, but not limited to, wall and window washing, floor cleaning and waxing, and the cleaning in place of rugs, drapes and upholstery. The term “janitorial services” does not include painting, papering, repairing, furnace or septic tank cleaning, snow removal or sandblasting;

e. The sale of or charge made for labor and services rendered in respect to automobile towing and similar automotive transportation services, but not in respect to those required to report and pay taxes under Chapter 82.16 RCW;

f. The sale of and charge made for the furnishing of lodging and all other services, except network telephone service and cable service, by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property, and it shall be presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same. For the purposes of this definition, it shall be presumed that the sale of and charge made for the furnishing of lodging for a continuous period of one month or more to a person is a rental or lease of real property and not a mere license to enjoy the same;

g. The sale of or charge made for tangible personal property, labor and services to persons taxable under subsections (3)(a), (3)(b), (3)(c), (3)(d), (3)(e), and (3)(f) of this definition when such sales or charges are for property, labor and services which are used or consumed in whole or in part by such persons in the performance of any activity defined as a “sale at retail” or “retail sale” even though such property, labor and services may be resold after such use or consumption. Nothing contained in subsection 3 of this definition shall be construed to modify subsection 1 of this definition and nothing contained in subsection 1 of this definition shall be construed to modify subsection 3 of this definition.

4. “Sale at retail” or “retail sale” shall also include the providing of competitive telephone service to consumers.

5. “Sale at retail” or “retail sale” shall also include the sale of canned software other than a sale to a person who presents a resale certificate under RCW 82.04.470, regardless of the method of delivery to the end user, but shall not include custom software or the customization of canned software.

6. “Sale at retail” or “retail sale” shall also include the sale of or charge made for labor and services rendered in respect to the building, repairing, or improving of any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state, the state of Washington, or by the United States and which is used or to be used primarily for foot or vehicular traffic, including mass transportation vehicles of any kind (“public road construction”).

7. “Sale at retail” or “retail sale” shall also include the sale of or charge made for labor and services rendered in respect to the constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to Chapter 35.82 RCW, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation (“government contracting”).

8. “Sale at retail” or “retail sale” shall not include the sale of services or charges made for the clearing of land and the moving of earth of or for the United States, any instrumentality thereof, or a county or city housing authority. Nor shall the term include the sale of services or charges made for cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development. (This should be reported under the service and other classification.)

9. “Sale at retail” or “retail sale” shall not include the sale of or charge made for labor and services rendered for environmental remedial action as defined in RCW 82.04.2635(2). (This should be reported under the service and other classification.)

“Sale at wholesale” or “wholesale sale” means any sale of tangible personal property which is not a retail sale, and any charge made for labor and services rendered for persons who are not consumers, in respect to real or personal property, if such charge is expressly defined as a retail sale when rendered to or for consumers. “Sale at wholesale” also includes the sale of network telephone service to a telecommunications company as defined in RCW 80.04.010 for the purpose of resale, as contemplated by RCW 35.21.715.

Services. At such time as Chapter 82.04 RCW defines “services,” that definition shall apply. Until such time as Chapter 82.04 RCW shall define “services,” “services” means all business activities not defined elsewhere in this section.

“Taxpayer” means any “person,” as herein defined, required to have a business license under Chapter 5.04 BIMC or liable for the collection of any tax or fee under this chapter, or who engages in any business or who performs any act for which a tax or fee is imposed by this chapter.

“Value proceeding or accruing” means the consideration, whether money, credits, rights, or other property expressed in terms of money, a person is entitled to receive or which is actually received or accrued. The term shall be applied, in each case, on a cash receipts or accrual basis according to which method of accounting is regularly employed in keeping the books of the taxpayer. The value proceeding or accruing from sales on the installment plan under conditional contracts of sale shall be reported as of the dates when the payments become due.

Value of Products.

1. The “value of products,” including byproducts, extracted or manufactured, shall be determined by the gross proceeds derived from the sale thereof, whether such sale is at wholesale or at retail, to which shall be added all subsidies and bonuses received from the purchaser or from any other person with respect to the extraction, manufacture, or sale of such products or byproducts by the seller.

2. Where such products, including byproducts, are extracted or manufactured for commercial or industrial use; and where such products, including byproducts, are shipped, transported or transferred out of the city, or to another person, without prior sale or are sold under circumstances such that the gross proceeds from the sale are not indicative of the true value of the subject matter of the sale; the value shall correspond as nearly as possible to the gross proceeds from sales in this state of similar products of like quality and character, and in similar quantities by other taxpayers, plus the amount of subsidies or bonuses ordinarily payable by the purchaser or by any third person with respect to the extraction, manufacture, or sale of such products. In the absence of sales of similar products as a guide to value, such value may be determined upon a cost basis. In such cases, there shall be included every item of cost attributable to the particular article or article extracted or manufactured, including direct and indirect overhead costs. The director may prescribe rules for the purpose of ascertaining such values.

3. Notwithstanding subsection 2 of this definition, the value of a product manufactured or produced for purposes of serving as a prototype for the development of a new or improved product shall correspond to:

a. The retail selling price of such new or improved product when first offered for sale; or

b. The value of materials incorporated into the prototype in cases in which the new or improved product is not offered for sale.

“Wholesaling” means engaging in the activity of making sales at wholesale, and is reported under the wholesaling classification. (Ord. 2004-16 § 1, 2004)

5.05.050 Imposition of the tax – Tax or fee levied.

A. In addition to the business license fee required by Chapter 5.04 BIMC, and except as provided in subsection B of this section or elsewhere in this chapter, there is hereby levied upon and shall be collected from every person a tax for the act or privilege of engaging in business activities within the city, whether the person’s office or place of business be within or without the city. The tax shall be in amounts to be determined by the application of rates against gross proceeds of sale, gross income of business, or value of products, including byproducts, as the case may be, as follows:

1. Upon every person engaging within the city in business as an extractor, as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, extracted for sale or for commercial or industrial use, multiplied by the rate of one-tenth of one percent. The measure of the tax is the value of the products, including byproducts, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the city.

2. Upon every person engaging within the city in business as a manufacturer, as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, manufactured, multiplied by the rate of one-tenth of one percent. The measure of the tax is the value of the products, including byproducts, so manufactured, regardless of the place of sale or the fact that deliveries may be made to points outside the city.

3. Upon every person engaging within the city in the business of making sales at wholesale, [except persons taxable under subsection ___ of this section;] as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of such sales of the business without regard to the place of delivery of articles, commodities or merchandise sold, multiplied by the rate of one-tenth of one percent.

4. Upon every person engaging within the city in the business of making sales at retail, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of such sales of the business, without regard to the place of delivery of articles, commodities or merchandise sold, multiplied by the rate of one-tenth of one percent.

5. Upon every person engaging within the city in the business of (a) printing; (b) both printing and publishing newspapers, magazines, periodicals, books, music and other printed items; (c) publishing newpapers, magazines and periodicals; (d) extracting for hire; and (e) processing for hire, as to such person, the amount of tax on such business shall be equal to the rate of one-tenth of one percent.

6. Upon every person engaging within the city in the business of making sales of retail services, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales multiplied by the rate of one-tenth of one percent.

7. Upon every other person engaging within the city in any business activity other than or in addition to those enumerated in this section, as to such persons, the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of one-tenth of one percent. This subsection includes but is not limited to (regardless of whether title to material used in the performance of such business passes to another by accession, merger or other than by outright sale) persons engaged in the business of developing or producing custom software or of customizing canned software, producing royalties or commissions, and persons engaged in the business of rendering any type of service which does not constitute a sale at retail, a sale at wholesale, or a retail service.

B. The gross receipts tax imposed in this section shall not apply to any person whose gross proceeds of sales, gross income of the business, and value of products, including byproducts, as the case may be, from all activities conducted within the city during any calendar year is equal to or less than $250,000. Persons with gross income exceeding $250,000 per year shall by taxed only on the amount of gross income exceeding $250,000 per year. (Ord. 2004-16 § 1, 2004)

5.05.060 Doing business with the city.

Except where such a tax is otherwise levied and collected by the city from such person, there is hereby levied a tax on the privilege of accepting or executing a contract with the city. Such tax shall be levied and collected whether goods or services are delivered within or without the city and whether or not such person has an office or place of business within or without the city. As to such persons, the amount of tax shall be equal to the gross contract price multiplied by the rate under BIMC 5.05.050 that would otherwise apply if the sale or service were taxable pursuant to that section. (Ord. 2004-16 § 1, 2004)

5.05.070 Multiple activities credit when activities take place in one or more cities with eligible gross receipt taxes.

A. Persons who engage in business activities that are within the purview of two or more subsections of BIMC 5.05.050 shall be taxable under each applicable subsection.

B. Notwithstanding anything to the contrary herein, if the imposition of the city’s tax would place an undue burden upon interstate commerce or violate constitutional requirements, a taxpayer shall be allowed a credit to the extent necessary to preserve the validity of the city’s tax; provided, that the city tax shall still apply to as much of the taxpayer’s activities as may be constitutionally subject to the city’s taxing authority.

C. As a condition to taking the credit authorized by this section, a taxpayer must be able to document that the amount of tax sought to be credited was paid upon the same gross receipts used in computing the tax against which the credit is applied.

D. Persons engaged in the retailing or wholesaling business with respect to selling products in the city shall be allowed a credit against those taxes for any eligible gross receipts taxes paid (1) with respect to the manufacturing of the products sold in the city, and (2) with respect to the extracting of the products, or the ingredients used in the products, sold in the city. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the sale of those products.

E. Persons engaged in a manufacturing business with respect to manufacturing products in the city shall be allowed a credit against those taxes for any eligible gross receipts tax paid with respect to extracting the ingredients of the products manufactured in the city. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the manufacturing of those products.

F. Persons engaged in a retailing or wholesaling business with respect to selling products in the city shall be allowed a credit against those taxes for any eligible gross receipts taxes paid with respect to the printing, or the printing and publishing, of the products sold within the city. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the sale of those products. (Ord. 2004-16 § 1, 2004)

5.05.075 Deductions to prevent multiple taxation of transactions involving more than one city with an eligible gross receipts tax.

A. A taxpayer that is subject to an eligible gross receipts tax on the same activity in more than one jurisdiction may be entitled to a deduction as follows:

1. A taxpayer that has paid an eligible gross receipts tax, with respect to a sale of goods or services, to a jurisdiction in which the goods are delivered or the services are provided may deduct an amount equal to the gross receipts used to measure that tax from the measure of the tax owed to the city.

2. Notwithstanding subsection A.1 of this section, a person that is subject to an eligible gross receipts tax in more than one jurisdiction on the gross income derived from intangibles such as royalties, trademarks, patents, or goodwill shall assign those gross receipts to the jurisdiction where the person is domiciled or where its headquarters is located.

3. A taxpayer that has paid an eligible gross receipts tax on the privilege of accepting or executing a contract with another city may deduct an amount equal to the contract price used to measure the tax due to the other city from the measure of the tax owed to the city.

B. A person manufacturing products within the city and using products manufactured by the same person outside the city may deduct from the measure of the manufacturing tax the value of products manufactured outside the city and included in the measure of an eligible gross receipts tax paid to the other jurisdiction with respect to manufacturing such products. (Ord. 2004-16 § 1, 2004)

5.05.090 Exemptions.

A. Public Utilities. This chapter shall not apply to any person conducting a business activity upon which tax liability is specifically imposed under the provisions of Chapters 3.88, 5.08, or 5.10 BIMC.

B. Investments – Dividends from Subsidiary Corporations. This chapter shall not apply to amounts derived by persons, other than those engaging in banking, loan, security, or other financial businesses, from investments or the use of money as such, and also amounts derived as dividends by a parent from its subsidiary corporations.

C. Employees.

1. This chapter shall not apply to any person with respect to the person’s employment in the capacity as an employee or servant as distinguished from that of an independent contractor. For the purposes of this subsection, the definition of “employee” shall include those persons that are defined in the Internal Revenue Code, as hereafter amended.

2. For purposes of this chapter, a booth renter, as defined by RCW 18.16.020, is an independent contractor.

D. Amounts Derived from Sale of Real Estate. This chapter shall not apply to gross proceeds derived from the sale of real estate; provided, that this exemption shall not be construed to exempt amounts received as commissions from the sale of real estate, nor as fees, handling charges, discounts, interest or similar financial charges resulting from, or relating to, real estate transactions. This chapter shall also not apply to amounts received for the rental of real estate if the rental income is derived from a contract to rent for a continuous period of 30 days or longer.

E. Mortgage Brokers’ Third-Party Provider Services Trust Accounts. This chapter shall not apply to amounts received from trust accounts to mortgage brokers for the payment of third-party costs if the accounts are operated in a manner consistent with RCW 19.146.050 and any rules adopted by the director of financial institutions.

F. Amounts Derived from Manufacturing, Selling or Distributing Motor Vehicle Fuel. This chapter shall not apply to the manufacturing, selling, or distributing of motor vehicle fuel, as the term “motor vehicle fuel” is defined in RCW 82.36.010 and as exempt under RCW 82.36.440; provided, that any fuel not subjected to the state fuel excise tax, or any other applicable deduction or exemption, will be taxable under this chapter.

G. Amounts Derived from Liquor, and the Sale or Distribution of Liquor. This chapter shall not apply to liquor as defined in RCW 66.04.010 and exempt in RCW 66.08.120.

H. Casual and Isolated Sales. This chapter shall not apply to the gross proceeds derived from casual or isolated sales.

I. Accommodation Sales. This chapter shall not apply to sales for resale by persons regularly engaged in the business of making retail sales of the type of property so sold to other persons similarly engaged in the business of selling such property where (1) the amount paid by the buyer does not exceed the amount paid by the seller to the vendor in the acquisition of the article, and (2) the sale is made as an accommodation to the buyer to enable the buyer to fill a bona fide existing order of a customer or is made within 14 days to reimburse in kind a previous accommodation sale by the buyer to the seller.

J. Taxes Collected as Trust Funds. This chapter shall not apply to amounts collected by the taxpayer from third parties to satisfy third party obligations to pay taxes, such as the retail sales tax, use tax, and admission tax.

K. Nonprofit Activities. This chapter shall not apply to the nonprofit activities of religious, charitable, educational, benevolent, fraternal, or social organizations which have been determined by the Internal Revenue Service of the United States to be exempt from the payment of income tax.

L. Governmental Activities. This chapter shall not apply to the exercise of governmental functions performed by any instrumentality of the United States, the state of Washington, or any political subdivision thereof. (Ord. 2004-16 § 1, 2004)

5.05.100 Deductions.

In computing the license fee or tax, there may be deducted from the measure of tax the following items:

A. Receipts from Tangible Personal Property Delivered outside the State. In computing tax, there may be deducted from the measure of tax under retailing or wholesaling amounts derived from the sale of tangible personal property that is received by the purchaser or its agent outside the state of Washington.

B. Cash Discount Taken by Purchaser. In computing tax, there may be deducted from the measure of tax the cash discount amounts actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount under the extracting or manufacturing classifications with respect to articles produced or manufactured, the reported values of which, for the purposes of this tax, have been computed according to the “value of product” provisions.

C. Credit Losses of Accrual Basis Taxpayers. In computing tax, there may be deducted from the measure of tax the amount of credit losses actually sustained by taxpayers whose regular books of account are kept upon an accrual basis.

D. Constitutional Prohibitions. In computing tax, there may be deducted from the measure of the tax amounts derived from business which the city is prohibited from taxing under the Constitution of the state of Washington or the Constitution of the United States.

E. Other Deductions. All other items allowed by the state of Washington as deductions from the business and occupation tax imposed by the state; provided, that the items being deducted have been included in the remaining income after having subtracted the exemptions in BIMC 5.05.090. (Ord. 2004-16 § 1, 2004)

5.05.120 Tax part of overhead.

It is not the intention of this chapter that the taxes or fees herein levied upon persons engaging in business be construed as taxes or fees upon the purchaser or customer, but that such taxes or fees shall be levied upon, and collectible from, the person engaging in the business activities herein designated and that such taxes or fees shall constitute a part of the cost of doing business of such persons. (Ord. 2004-16 § 1, 2004)

5.05.130 Severability clause.

If any provision of this chapter or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances shall not be affected. (Ord. 2004-16 § 1, 2004)

Chapter 5.06
ADMINISTRATIVE PROVISIONS FOR BUSINESS AND OCCUPATION TAXES

Sections:

5.06.010 Purpose.

5.06.015 Application of chapter stated.

5.06.020 Definitions.

5.06.030 Registration/license requirements.

5.06.040 When due and payable – Reporting periods – Annual returns – Threshold provisions or relief from filing requirements – Computing time periods – Failure to file returns.

5.06.050 Payment methods – Mailing returns or remittances – Time extension – Deposits – Recording payments – Payment must accompany return – NSF checks.

5.06.060 Records to be preserved – Examination – Estoppel to question assessment.

5.06.070 Accounting methods.

5.06.080 Public work contracts – Payment of fee and tax before final payment for work.

5.06.090 Underpayment of tax, interest, or penalty – Interest.

5.06.095 Time in which assessment may be made.

5.06.100 Overpayment of tax, penalty, or interest – Credit or refund – Interest rate – Statute of limitations.

5.06.110 Late payment – Disregard of written instructions – Evasion – Penalties.

5.06.120 Cancellation of penalties.

5.06.130 Taxpayer quitting business – Liability of successor.

5.06.140 Administrative appeal.

5.06.150 Judicial review of administrative appeal decision.

5.06.160 Director to make rules.

5.06.170 Ancillary allocation authority of director.

5.06.180 Mailing of notices.

5.06.190 Tax declared additional.

5.06.200 Public disclosure – Confidentiality – Information sharing.

5.06.210 Tax constitutes debt.

5.06.220 Unlawful actions – Violation – Penalties.

5.06.230 Closing agreement provisions.

5.06.240 Charge-off of uncollectible taxes.

5.06.250 Severability.

5.06.010 Purpose.

The provisions of this chapter are intended to provide a structure for the efficient administration of the city’s business and occupation tax with the minimum administrative imposition upon the businesses taxed. (Ord. 2004-17 § 1, 2004)

5.06.015 Application of chapter stated.

The provisions of this chapter shall apply with respect to the taxes imposed under Chapter 5.05 BIMC and under other titles, chapters, and sections in such manner and to such extent as indicated in each such title, chapter or section. (Ord. 2004-17 § 1, 2004)

5.06.020 Definitions.

For purposes of this chapter, the definitions contained in Chapter 5.05 BIMC shall apply equally to the provisions of this chapter unless the term is defined otherwise in this chapter. In addition to those definitions contained in Chapter 5.05 BIMC, the following definitions will apply:

A. “Director” means the director of finance and administrative services of the city or any officer, agent or employee of the city designated to act on the director’s behalf.

B. “Reporting period” means the 12-month period, or portion thereof, beginning the first day of January of each year.

C. “Return” means any document a person is required by the city to file to satisfy or establish a tax or fee obligation that is administered or collected by the city and that has a statutorily defined due date.

D. “Successor” means any person to whom a taxpayer quitting, selling out, exchanging, or disposing of a business sells or otherwise conveys, directly or indirectly, in bulk and not in the ordinary course of the taxpayer’s business, any part of the materials, supplies, merchandise, inventory, fixtures, or equipment of the taxpayer. Any person obligated to fulfill the terms of a contract shall be deemed a successor to any contractor defaulting in the performance of any contract as to which such person is a surety or guarantor.

E. “Tax year” or “taxable year” means the calendar year. (Ord. 2004-17 § 1, 2004)

5.06.030 Registration/license requirements.

Every person who engages in business activities within the city shall register for and obtain a business license from the city as required in Chapter 5.04 BIMC. (Ord. 2004-17 § 1, 2004)

5.06.040 When due and payable – Reporting periods – Annual returns – Threshold provisions or relief from filing requirements – Computing time periods – Failure to file returns.

A. For purposes of the tax imposed by Chapter 5.05 BIMC, any person whose value of products, gross proceeds of sales, or gross income of the business, subject to tax after all allowable deductions, is greater than or equal to $100,000 in the current calendar year shall file a return, submit the return to the director and shall pay the correlating business and occupation tax on such products, gross proceeds of sales and/or gross income of the business as set forth in this chapter and Chapter 5.05 BIMC. [A person whose value of products, gross proceeds of sales, or gross income of the business, subject to tax after all allowable deductions, is less than $100,000 in the current calendar year shall file a return, declare that no tax is due on that person’s return, and submit the return to the director.] [The gross receipts and deduction amounts shall be entered on the tax return regardless of whether any tax may be due].

B. Any person whose value of products, gross proceeds of sales, or gross income of the business, subject to tax after all allowable deductions, is less than $100,000 in the current calendar year is not required to file a return but is required to certify the total gross income of the business on the business license renewal required by Chapter 5.04 BIMC.

C. A taxpayer that commences to engage in business activity in the city shall file a return and pay the tax or fee for the portion of the reporting period during which the taxpayer is engaged in such business activity.

D. Except as otherwise specifically provided by any other provision of this chapter, in computing any period of days prescribed by this chapter the day of the act or event from which the designated period of time runs shall not be included. The last day of the period shall be included unless it is a Saturday, Sunday, or city or federal legal holiday, in which case the last day of such period shall be the next succeeding day which is neither a Saturday, Sunday, or city or federal legal holiday.

E. If any taxpayer fails, neglects or refuses to make a return as and when required in this chapter, the director is authorized to determine the amount of the tax or fees payable by obtaining facts and information upon which to base the director’s estimate of the tax or fees due. Such assessment shall be deemed prima facie correct and shall be the amount of tax owed to the city by the taxpayer. The director shall notify the taxpayer by mail of the amount of tax so determined, together with any penalty, interest, and fees due; the total of such amounts shall thereupon become immediately due and payable. (Ord. 2004-17 § 1, 2004)

5.06.050 Payment methods – Mailing returns or remittances – Time extension – Deposits – Recording payments – Payment must accompany return – NSF checks.

A. Taxes shall be paid to the director in United States currency by bank draft, certified check, cashier’s check, personal check, money order, cash, or by wire transfer or electronic payment if such wire transfer or electronic payment is authorized by the director. If payment so received is not paid by the bank on which it is drawn, the taxpayer, by whom such payment is tendered, shall remain liable for payment of the tax and for all legal penalties, the same as if such payment had not been tendered. Acceptance of any sum by the director shall not discharge the tax or fee due unless the amount paid is the full amount due.

B. A return or remittance that is transmitted to the city by United States mail shall be deemed filed or received on the date shown by the cancellation mark stamped by the Post Office upon the envelope containing it. The director may allow electronic filing of returns or remittances from any taxpayer. A return or remittance which is transmitted to the city electronically shall be deemed filed or received according to procedures set forth by the director.

C. If a written request is received prior to the due date, the director, for good cause, may grant, in writing, additional time within which to make and file returns.

D. The director shall keep full and accurate records of all funds received or refunded. The director shall apply payments first against all penalties and interest owing, and then upon the tax, without regard to any direction of the taxpayer.

E. For any return not accompanied by a remittance of the tax shown to be due thereon, the taxpayer shall be deemed to have failed or refused to file a return and shall be subject to the penalties and interest provided in this chapter.

F. Any payment made that is returned for lack of sufficient funds or for any other reason will not be considered received until payment by certified check, money order, or cash of the original amount due, plus a “nonsufficient funds (NSF)” charge of $20.00 is received by the director. Any license issued upon payment with a NSF check will be considered void, and shall be returned to the director. No license shall be reissued until payment (including the $20.00 NSF fee) is received.

G. The director is authorized, but not required, to mail tax return forms to taxpayers, but failure of the taxpayer to receive any such forms shall not excuse the taxpayer from filing returns and making payment of the taxes or fees, when and as due under this chapter. (Ord. 2004-17 § 1, 2004)

5.06.060 Records to be preserved – Examination – Estoppel to question assessment.

Every person liable for any fee or tax imposed by this chapter shall keep and preserve, for a period of five years after filing a tax return, such records as may be necessary to determine the amount of any fee or tax for which the person may be liable; which records shall include copies of all federal income tax and state tax returns and reports made by the person. All books, records, papers, invoices, vendor lists, inventories, stocks of merchandise, and other data including federal income tax and state tax returns and reports shall be open for examination at any time by the director or its duly authorized agent. Every person’s business premises shall be open for inspection or examination by the director or a duly authorized agent.

A. If a person does not keep the necessary books and records within the city, it shall be sufficient if such person (1) produces within the city such books and records as may be required by the director, or (2) bears the cost of examination by the director’s agent at the place where such books and records are kept; provided, that the person electing to bear such cost shall pay in advance to the director the estimated amount thereof, including round-trip fare, lodging, meals and incidental expenses, subject to adjustment upon completion of the examination.

B. Any person who fails or refuses the director’s request to provide or make available records or to allow inspection or examination of the business premises shall be forever barred from questioning in any court action the correctness of any assessment of taxes made by the city for any period for which such records have not been provided, made available or kept and preserved, or in respect of which inspection or examination of the business premises has been denied. The director is authorized to determine the amount of the tax or fees payable by obtaining facts and information upon which to base the estimate of the tax or fees due. Such fee or tax assessment shall be deemed prima facie correct and shall be the amount of tax owing the city by the taxpayer. The director shall notify the taxpayer by mail the amount of tax so determined, together with any penalty, interest, and fees due; the total of such amounts shall thereupon become immediately due and payable. (Ord. 2004-17 § 1, 2004)

5.06.070 Accounting methods.

A. A taxpayer may file tax returns in each reporting period with amounts based upon cash receipts only if the taxpayer’s books of account are kept on a cash receipts basis. A taxpayer that does not regularly keep books of account on a cash receipts basis must file returns with amounts based on the accrual method.

B. The taxes imposed and the returns required hereunder shall be upon a calendar-year basis. (Ord. 2004-17 § 1, 2004)

5.06.080 Public work contracts – Payment of fee and tax before final payment for work.

The director may, before issuing any final payment to any person performing any public works contract for the city, require such person to pay in full all license fees or taxes due under this title from such person on account of such contract or otherwise, and may require such taxpayer to file with the director a verified list of all subcontractors supplying labor and/or materials to the person in connection with said public works. (Ord. 2004-17 § 1, 2004)

5.06.090 Underpayment of tax, interest, or penalty – Interest.

A. If, upon examination of any returns, or from other information obtained by the director, it appears that a tax or penalty less than that properly due has been paid, the director shall assess the additional amount found to be due and shall add thereto interest on the tax only. The director shall notify the person by mail of the additional amount, which shall become due and shall be paid within 30 days from the date of the notice, or within such time as the director may provide in writing.

B. For the purposes of this section:

1. The rate of interest to be charged to the taxpayer for taxes on the taxable gross receipts prior to January 1, 2005, shall be one percent per month.

2. Interest imposed as of January 1, 2005, and thereafter shall be computed from the last day of the month following the end of the reporting period and will continue to accrue until payment is made. In case of an audit the interest shall be computed from the first day of the month following each calendar year or portion thereof included in the audit period.

3. The rate of interest to be charged to the taxpayer for taxes on the taxable gross receipts as of January 2005 and thereafter shall be an average of the federal short-term rate as defined in 26 U.S.C. Section 1274(d) plus two percentage points. The rate shall be computed by taking an arithmetical average to the nearest percentage point of the federal short-term rate, compounded annually. That average shall be calculated using the rates from four months: January, April, and July of the calendar year immediately preceding the new year, and October of the previous preceding year. The rate shall be adjusted on the first day of January of each year for use in computing interest for that calendar year. (Ord. 2004-17 § 1, 2004)

5.06.095 Time in which assessment may be made.

The director shall not assess, or correct an assessment for, additional taxes, penalties, or interest due more than four years after the close of the calendar year in which they were incurred, except that the director may issue an assessment:

A. Against a person who is not currently registered or licensed or has not filed a tax return as required by this chapter for taxes due within the period commencing 10 years prior to the close of the calendar year in which the person was contacted in writing by the director;

B. Against a person that has committed fraud or who misrepresented a material fact; or

C. Against a person that has executed a written waiver of such limitations. (Ord. 2004-17 § 1, 2004)

5.06.100 Overpayment of tax, penalty, or interest – Credit or refund – Interest rate – Statute of limitations.

A. If, upon receipt of an application for a refund, or during an audit or examination of the taxpayer’s records and tax returns, the director determines that the amount of tax, penalty, or interest paid is in excess of that properly due, the excess amount shall be credited to the taxpayer’s account or shall be refunded to the taxpayer, in the director’s discretion. Except as provided in subsection B of this section, no refund or credit shall be made for taxes, penalties, or interest paid more than four years prior to the beginning of the calendar year in which the refund application is made or examination of records is completed.

B. The execution of a written waiver shall extend the time for applying for, or making a refund or credit of any taxes paid during, or attributable to, the years covered by the waiver if, prior to the expiration of the waiver period, an application for refund of such taxes is made by the taxpayer or the director discovers that a refund or credit is due.

C. Refunds shall be made by means of vouchers approved by the director and by the issuance of a city check or warrants drawn upon and payable from such funds as the city may provide.

D. Any final judgment for which a recovery is granted by any court of competent jurisdiction for tax, penalties, interest, or costs paid by any person shall be paid in the same manner as provided in subsection C of this section, upon the filing with the director a certified copy of the order or judgment of the court.

E. No interest shall be paid on overpayments of taxes for periods ending on or before December 31, 2004. Interest on overpayments of taxes for periods beginning on or after January 1, 2005, shall be the average federal short-term interest rate as outlined for assessments under BIMC 5.06.090.B.3 plus two percentage points. (Ord. 2004-17 § 1, 2004)

5.06.110 Late payment – Disregard of written instructions – Evasion – Penalties.

A. If payment of any tax due on a return to be filed by a taxpayer is not received by the director by the due date, the director shall add a penalty equal to five percent of the amount of the tax; and if the tax is not received on or before the last day of the month following the due date, the director shall add a total penalty equal to 15 percent of the amount of the tax; and if the tax is not received on or before the last day of the second month following the due date, the director shall add a total penalty equal to 25 percent of the amount of the tax. No penalty assessed herein shall be less than $5.00.

B. If a tax deficiency is assessed by the director, there shall be added a penalty equal to five percent of the amount of the deficiency. If payment of any tax deficiency assessed by the director is not received by the due date specified in the notice, or any extension thereof, the director shall assess a penalty equal to 15 percent of the amount of the additional tax found due. If payment of any tax deficiency assessed by the director is not received on or before the thirtieth day following the due date specified in the notice, or any extension thereof, the director shall assess a penalty equal to 25 percent of the amount of additional tax found due. No penalty added shall be less than $5.00.

C. If a citation or criminal complaint is issued by the director for the collection of taxes, fees, assessments, interest or penalties, there shall be added thereto a penalty of 10 percent of the amount due, but not less than $10.00.

D. If the director finds that a person has engaged in any business or performed any act upon which a tax is imposed under this title and that person has not obtained from the director a license as required by Chapter 5.04 BIMC, the director shall impose a penalty of five percent of the amount of tax due from that person for the period that the person was not licensed. No penalty shall be imposed under this subsection if the person who has engaged in business without a license obtains a license prior to being notified by the director of the need to be licensed.

E. If the director determines that all or any part of a deficiency resulted from the taxpayer’s failure to follow specific written tax reporting instructions, there shall be assessed a penalty of 10 percent of the amount of the additional tax due.

1. A taxpayer fails to follow specific written tax reporting instructions when the director has informed the taxpayer in writing of the taxpayer’s tax obligations and the taxpayer fails to act in accordance with those instructions unless the director has not issued final instructions because the matter is under appeal pursuant to this chapter. The director shall not assess the penalty under this subsection E upon any taxpayer that has made a good faith effort to comply with the specific written instructions provided by the director to that taxpayer.

2. Specific written instructions may be given as a part of a tax assessment, audit, determination or closing agreement; provided, that such specific written instructions shall apply only to the taxpayer addressed or referenced on such documents.

3. Any specific written instructions by the director shall be clearly identified as such and shall inform the taxpayer that failure to follow the instructions may subject the taxpayer to the penalties imposed by this subsection.

F. If the director finds that all or any part of the deficiency resulted from an intent to evade the tax payable, the director shall assess a penalty of 50 percent of the additional tax found to be due.

G. The director may impose the penalties authorized under subsections A through E of this section on the same tax found to be due or anytime thereafter. This subsection does not prohibit or restrict the application of other penalties authorized by law.

H. The director shall assess the penalties authorized by subsections E and F of this section in accordance with the provisions of this chapter governing assessment of tax deficiencies. The director shall not impose both the evasion penalty and the penalty for disregarding specific written instructions on the same tax found to be due.

I. For the purposes of this section, “return” means any document a person is required by the city to file to satisfy or establish a tax or fee obligation that is administered or collected by the city, and that has a statutorily defined due date. (Ord. 2004-17 § 1, 2004)

5.06.120 Cancellation of penalties.

A. The director may cancel any penalties imposed under BIMC 5.06.110.A if the taxpayer shows that its failure to timely file or pay the tax was due to reasonable cause and not willful neglect. Willful neglect is presumed unless the taxpayer shows that it exercised ordinary business care and prudence in making arrangements to file the return and pay the tax but was, nevertheless, due to circumstances beyond the taxpayer’s control, unable to file or pay by the due date. The director has no authority to cancel any other penalties or to cancel penalties for any other reason except as provided in subsection C of this section.

B. A request for cancellation of penalties must be received by the director within 30 days after the date the department of finance and administrative services mails the notice that the penalties are due. The request must be in writing and contain competent proof of all pertinent facts supporting a reasonable cause determination. In all cases the burden of proving the facts rests upon the taxpayer.

C. The director may waive the penalties in BIMC 5.06.110.A one time if a person:

1. Is not currently licensed and filing returns;

2. Was unaware of its responsibility to file and pay tax; and

3. Obtained business licenses and filed past due tax returns within 30 days after being notified by the department of finance and administrative service of the violation.

D. The director shall not cancel any interest charged upon amounts due. (Ord. 2004-17 § 1, 2004)

5.06.130 Taxpayer quitting business – Liability of successor.

A. Whenever any taxpayer quits business, sells out, exchanges, or otherwise disposes of his business or its stock of goods, any tax payable hereunder shall become immediately due and payable. Such taxpayer shall, within 10 days thereafter, make a return and pay the tax due.

B. Any person who becomes a successor shall become liable for the full amount of any tax owing. The successor shall withhold from the purchase price a sum sufficient to pay any tax due to the city from the taxpayer until such time as:

1. The taxpayer shall produce a receipt from the city showing payment in full of any tax due or a certificate that no tax is due; or

2. More than six months has passed since the successor notified the director of the acquisition and the director has not issued and notified the successor of an assessment.

C. Payment of the tax by the successor shall, to the extent thereof, be deemed a payment upon the purchase price. If such payment is greater in amount than the purchase price, the amount of the difference shall become a debt due such successor from the taxpayer.

D. Notwithstanding the above, if a successor gives written notice to the director of the acquisition, and the department does not within six months of the date it received the notice issue an assessment against the taxpayer and mail a copy of that assessment to the successor, the successor shall not be liable for the tax. (Ord. 2004-17 § 1, 2004)

5.06.140 Administrative appeal.

A. Except to the extent that such appeal may be barred pursuant to BIMC 5.06.060.B, any person aggrieved by the amount of the fee or tax determined by the director to be required under the provisions of this chapter, or any other determination by the director pursuant to this chapter, may, upon paying the amount determined by the director to be due, appeal such determination to the city [hearing examiner/council or a committee of the city council].

B. The appeal shall be in writing and shall contain the following:

1. The name and address of the taxpayer appealing the director’s decision;

2. A statement identifying the determination of the director from which the appeal is taken;

3. A statement setting forth the grounds upon which the appeal is taken and identifying the specific errors that the director is alleged to have made in making the determination;

4. A statement identifying the requested relief from the determination being appealed; and

5. The appeal fee as provided by city council resolution.

C. The appeal must be filed with the city clerk within 30 days from the date written notice of the amount determined to be due, or other notice of the director’s determination, is mailed to the taxpayer.

D. The [city council or a committee of the city council/hearing examiner] shall, as soon as practical, fix a time and place for the hearing of such appeal, and shall cause a notice of the time and place thereof to be delivered or mailed to the parties.

[The hearing examiner shall conduct an appeal hearing in accordance with the applicable hearing procedures set forth in BIMC 2.16.100, and] [to be used if hearing examiner only] the taxpayer and the director or designee shall have the opportunity to be heard and to introduce evidence relevant to the subject of the appeal. [The hearing examiner shall establish rules for such hearings consistent with the provisions of this section] [to be used if hearing examiner only].

F. The [hearing examiner/city council or committee of the city council] shall give substantial weight to the director’s decision.

G. Following the hearing, the [hearing examiner/city council or committee of the city council] shall render a decision on the appeal, and shall enter written findings and conclusions of law in support thereof. A copy of the findings, conclusion and decision shall be mailed to the taxpayer and the director. The decision shall state the correct amount of tax owing as determined by the [hearing examiner/city council or committee of the city council], and/or any other information relevant to the hearing examiner’s decision. (Ord. 2004-17 § 1, 2004)

5.06.150 Judicial review of administrative appeal decision.

The taxpayer or the city may obtain judicial review of the [hearing examiner’s/city council’s or committee of the city council’s] decision by appealing the decision to the Kitsap County superior court within 21 days from the date of such decision, in accordance with state law. (Ord. 2004-17 § 1, 2004)

5.06.160 Director to make rules.

The director shall have the power, from time to time, to adopt, publish and enforce rules and regulations not inconsistent with this chapter or with law for the purpose of carrying out the provisions of this chapter and it shall be unlawful to violate or fail to comply with any such rule or regulation. (Ord. 2004-17 § 1, 2004)

5.06.170 Ancillary allocation authority of director.

The director is authorized to enter into agreements with other Washington cities which impose an “eligible gross receipts tax”:

A. To conduct an audit or joint audit of a taxpayer by using an auditor employed by the city, another city, or a contract auditor; provided, that such contract auditor’s pay is not in any way based upon the amount of tax assessed;

B. To allocate or apportion in a manner that fairly reflects the gross receipts earned from activities conducted within the respective cities the gross proceeds of sales, gross receipts, or gross income of the business, or taxes due from any person that is required to pay an eligible gross receipts tax to more than one Washington city.

C. To apply the city’s tax prospectively where a taxpayer has no office or place of business within the city and has paid tax on all gross income to another Washington city where the taxpayer is located; provided, that the other city maintains an eligible gross receipts tax, and the income was not derived from contracts with the city. (Ord. 2004-17 § 1, 2004)

5.06.180 Mailing of notices.

Any notice required by this chapter to be mailed to any taxpayer or licensee shall be sent by ordinary mail, addressed to the address of the taxpayer or licensee as shown by the records of the director. Failure of the taxpayer or licensee to receive any such mailed notice shall not release the taxpayer or licensee from any tax, fee, interest, or any penalties thereon, nor shall such failure operate to extend any time limit set by the provisions of this chapter. It is the responsibility of the taxpayer to inform the director in writing about a change in the taxpayer’s address. (Ord. 2004-17 § 1, 2004)

5.06.190 Tax declared additional.

The license fee and tax herein levied shall be additional to any license fee or tax imposed or levied under any law or any other ordinance of the city except as herein otherwise expressly provided. (Ord. 2004-17 § 1, 2004)

5.06.200 Public disclosure – Confidentiality – Information sharing.

A. For purposes of this section, unless a different meaning is clearly established by context, the following definitions apply:

1. “Disclose” means to make known to any person in any manner.

2. “Tax information” means:

a. A taxpayer’s identity;

b. The nature, source, or amount of the taxpayer’s income, payments, receipts, deductions, exemption, credits, assets, liability, net worth, tax liability deficiencies, over assessments, or tax payments, whether taken from the taxpayer’s books and records or any other source;

c. Whether the taxpayer’s return was, is being, or will be examined or subject to other investigation or processing; or

d. Other data received by, recorded by, prepared by, or provided to the director with respect to a taxpayer;

provided, that tax information shall not include data, material, or documents that do not disclose information related to a specific or identifiable taxpayer.

B. Tax returns and information may be “public records” as that term is defined in RCW 42.17.020. The director shall not disclose tax information if disclosure would violate Chapter 42.17 RCW or any other law prohibiting disclosure.

C. Reserved.

D. Tax information may be disclosed to the following:

1. The mayor, city administrator, members of the city council, city attorney, city clerk, or their authorized designees, for official purposes;

2. Any agency or officer of the United States of America, the state of Washington, or a tax department of any state, county, city or town; provided, that the agency or officer grants substantially similar privileges to the city, and further provided that the agency or officer shall not further disclose the tax information except as authorized in this section;

3. The taxpayer to whom it pertains or to such person or persons as the taxpayer may designate in writing as the taxpayer’s designee; except that tax information not received from the taxpayer shall not be so disclosed if the director determines that such disclosure would compromise any investigation or litigation by any federal, state, or local government agency in connection with the civil or criminal liability of the taxpayer or another person, or that such disclosure would identify a confidential informant, or that such disclosure is contrary to any agreement entered into by the director that provides for the reciprocal exchange of information with other government agencies, which agreement requires confidentiality with respect to such information unless such information is required to be disclosed to the taxpayer by the order of any court.

E. Nothing in this section shall prevent the use of tax information by the director or any other agency in any civil or criminal action involving any license, tax, interest, or penalty.

F. A person disclosing tax information to a person not entitled to receive that information under this section is guilty of a misdemeanor, and if the person violating this privacy requirement is an officer or employee of the city, such person may be required to forfeit their office or employment. (Ord. 2004-17 § 1, 2004)

5.06.210 Tax constitutes debt.

Any license fee or tax due and unpaid under this chapter, and all interest and penalties thereon, shall constitute a debt to the city and may be collected in the same manner as any other debt in like amount, which remedy shall be in addition to all other existing remedies. (Ord. 2004-17 § 1, 2004)

5.06.220 Unlawful actions – Violation – Penalties.

A. It shall be unlawful for any person liable for fees under this chapter (or other chapters as listed):

1. To violate or fail to comply with any of the provisions of this chapter or any lawful rule or regulation adopted by the director;

2. To make any false statement on any license application or tax return;

3. To aid or abet any person in any attempt to evade payment of a license fee or tax;

4. To fail to appear or testify in response to a subpoena issued pursuant to applicable federal, state or local law;

5. To testify falsely in any investigation, audit, or proceeding conducted pursuant to this chapter.

B. Violation of any of the provisions of this chapter is a gross misdemeanor. Any person convicted of a violation of this chapter may be punished by a fine not to exceed $1,000, imprisonment not to exceed one year, or both fine and imprisonment. Penalties or punishments provided in this chapter shall be in addition to all other penalties provided by law.

C. Any person or officer of a corporation convicted of continuing to engage in business after the revocation of a license shall be guilty of a gross misdemeanor and may be punished by a fine not to exceed $5,000, or imprisonment not to exceed one year, or both fine and imprisonment. (Ord. 2004-17 § 1, 2004)

5.06.230 Closing agreement provisions.

The director may enter into an agreement in writing with any person relating to the liability of such person in respect of any tax imposed by any of the chapters within this title and administered by this chapter for any taxable period(s). Upon approval of such agreement, evidenced by execution thereof by the director and the person so agreeing, the agreement shall be final and conclusive as to the tax liability or tax immunity covered thereby, and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact:

A. The case shall not be reopened as to the matters agreed upon, or the agreement modified, by the director or the taxpayer; and

B. In any suit, action or proceeding such agreement or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance therewith shall not be annulled, modified, set aside, or disregarded. (Ord. 2004-17 § 1, 2004)

5.06.240 Charge-off of uncollectible taxes.

The director may charge off any tax, penalty, or interest that is owed by a taxpayer, if the director reasonably ascertains that the cost of collecting such amounts would be greater than the total amount that is owed or likely to be collected from the taxpayer. Charge-offs in excess of $500.00 shall require city council approval. (Ord. 2004-17 § 1, 2004)

5.06.250 Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances shall not be affected. (Ord. 2004-17 § 1, 2004)

Chapter 5.08
UTILITIES TAX

Sections:

5.08.010 Exercise of revenue license powers.

5.08.020 Definitions.

5.08.030 Repealed.

5.08.040 Tax – Levy.

5.08.045 Solid waste utility tax – Levied.

5.08.050 Tax – Payment.

5.08.060 Tax – Exemptions.

5.08.070 Taxpayer records required.

5.08.080 Penalty for failure to pay tax.

5.08.090 Credit or refund upon overpayment.

5.08.100 Procedure upon annexations to city.

5.08.110 Enforcement.

5.08.120 Violation – Penalty.

5.08.010 Exercise of revenue license powers.

The provisions of this chapter shall be deemed to be an exercise of the power of the city to license for revenue. (Ord. 81-38 § 1, 1981)

5.08.020 Definitions.

For purposes of this chapter, the following definitions shall apply:

A. Repealed by Ord. 2003-22.

B. 1. “Gross income” means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes or other expense whatsoever paid or accrued and without any deduction on account of losses.

2. Gross income does not include charges that are passed on to customers by the taxpayers pursuant to tariffs required by regulatory order to compensate for the cost to the company of tax imposed by this chapter. (Ord. 2003-22 § 5, 2003; Ord. 90-33 § 1, 1990: Ord. 81-38 § 2, 1981)

5.08.030 Occupation license required.

Repealed by Ord. 98-26. (Ord. 81-38 § 3, 1981)

5.08.040 Tax – Levy.

There is levied upon and there shall be collected from every person, firm or corporation engaged in carrying on the following business for hire or for sale of a commodity or a service within or partly within the corporate limits of the city a tax for the privilege of so doing business as hereinafter defined:

A. Upon any city-owned utility selling, transmitting or distributing water a tax to be equal to a percent of the total gross income derived from the operation of such business within the city as established by resolution of the city council.

B. Upon any city-owned utility providing sewer service, a tax to be equal to a percent of the total gross income from the operation of such business within the city as established by resolution of the city council.

C. Upon any city-owned utility providing storm drain service, a tax to be equal to a percent of the total gross income from the operation of such business within the city as established by resolution of the city council.

D. Upon any person selling or otherwise providing coaxial or other cable distribution of entertainment or information including television, radio, computer data, or any other electronically transmitted information, a tax equal to a percentage of the total gross income derived from the operation of such business within the city which percentage shall be the lower of the percentage charged to utility providers under Chapter 3.88 BIMC or the percentage charged to utility providers under other subsections of this section. (Ord. 2000-46 § 1, 2000; Ord. 99-53 § 1, 1999; Ord. 98-26 § 2, 1998: Ord. 90-33 § 2, 1990: Ord. 88-16 § 2, 1988: Ord. 85-14 § 1, 1985: Ord. 84-24 § 1, 1984: Ord. 83-13 § 1, 1983: Ord. 82-37 § 1, 1982: Ord. 81-38 § 4, 1981)

5.08.045 Solid waste utility tax – Levied.

From and after October 1, 1998, there is levied upon and there shall be collected from every person, firm or corporation engaged in the business of providing solid waste collection and disposal services within or partly within the city, a tax for the privilege of doing such business in the city in the amount of five percent of the total gross income from the operation of such business within the city, except that for purposes of this section, gross income does not include amounts received for the sale of materials obtained in the operation of a recycling facility. (Ord. 98-17 § 1, 1998)

5.08.050 Tax – Payment.

A. The tax imposed by this chapter shall be due and payable in quarterly installments and remittance shall be made on or before the last day of the month next succeeding the end of the quarterly period in which the tax accrued. These quarterly periods are as follows:

1. First quarter, January, February, March;

2. Second quarter, April, May, June;

3. Third quarter, July, August, September;

4. Fourth quarter, October, November, December.

B. The first payment made under this chapter shall be made by April 30th for the 3-month period ending March 31st. On or before said due date the taxpayer shall file with the clerk a written return, upon such form and setting forth such information as the clerk shall reasonably require, together with the payment of the amount of the tax. (Ord. 81-38 § 5, 1981)

5.08.060 Tax – Exemptions.

In computing the tax there shall be deducted from said gross operating revenues the following items:

A. Amounts derived from transactions in interstate or foreign commerce or from any business which the city is prohibited from taxing under the Constitutions of the United States or the state;

B. Amounts derived by the taxpayer from the city. (Ord. 81-38 § 6, 1981)

5.08.070 Taxpayer records required.

Each taxpayer shall keep records reflecting the amount of the taxpayer’s gross income. In addition, each taxpayer required to pay tax under BIMC 5.08.045 shall keep records reflecting the amount of gross income received for the sale of materials obtained in the operation of a recycling facility. Such records shall be open at all reasonable times to the inspection of the finance director or the finance director’s designee, for verification of the tax returns or for the fixing of the tax of a taxpayer who fails to make such returns. (Ord. 98-17 § 2, 1998: Ord. 81-38 § 7, 1981)

5.08.080 Penalty for failure to pay tax.

If any person, firm or corporation subject to this chapter fails to pay any tax required by this chapter within 30 days after the due date thereof, there shall be added to such tax a penalty of 10 percent of the amount of such tax, and any tax due under this chapter and unpaid, and all penalties thereon, shall constitute a debt to the city and may be collected by court proceedings, which remedy shall be in addition to all other remedies. Any judgment entered in favor of the city shall include recovery by the city of all court costs including attorney fees. (Ord. 81-38 § 8, 1981)

5.08.090 Credit or refund upon overpayment.

Any money paid to the city through error or otherwise not in payment of the tax imposed by this chapter or in excess of such tax shall, upon request of the taxpayer, be credited against any tax due or to become due from such taxpayer under this chapter or, upon the taxpayer’s ceasing to do business in the city, be refunded to the taxpayer. (Ord. 81-38 § 9, 1981)

5.08.100 Procedure upon annexations to city.

Whenever the boundaries of the city are extended by annexation, all persons, firms and corporations subject to this chapter will be provided copies of all annexation ordinances by the city. (Ord. 81-38 § 11, 1981)

5.08.110 Enforcement.

The clerk is authorized to adopt, publish and enforce, from time to time, such rules and regulations for the proper administration of this chapter as shall be necessary, and it shall be a violation of this chapter to violate or to fail to comply with any such rule or regulation lawfully promulgated under this chapter. (Ord. 81-38 § 13, 1981)

5.08.120 Violation – Penalty.

Any person, firm or corporation subject to this chapter who fails or refuses to file a tax return or pay tax when due, or who makes any false statement or representation in or in connection with a tax return, or otherwise violates or refuses or fails to comply with this chapter, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not to exceed $500.00 or by imprisonment not to exceed six months, or by both. (Ord. 98-26 § 3, 1998: Ord. 81-38 § 10, 1981)

Chapter 5.10
COMMERCIAL PARKING TAX

Sections:

5.10.010 Definitions.

5.10.020 Tax levied.

5.10.030 Payment of tax.

5.10.040 Tax – Collection.

5.10.050 Overpayment or underpayment of tax.

5.10.060 Appeal procedure.

5.10.070 Confidentiality of tax returns.

5.10.080 Duties of the director.

5.10.090 Use of proceeds of tax.

5.10.100 Civil penalty.

5.10.110 Violation – Penalty.

5.10.010 Definitions.

For the purposes of this chapter, the following definitions shall apply unless the context indicates otherwise:

A. “Commercial parking business” means the ownership, lease, operation, or management of a commercial parking lot in which fees are charged.

B. “Commercial parking lot” means a covered or uncovered area with stalls for the purpose of parking motor vehicles.

C. Repealed by Ord. 2003-22.

D. “Gross proceeds” means and includes the gross receipts collected or accruing by reason of the transaction of the commercial parking business, without any deduction on account of the cost of tangible property sold, labor costs, interest, discount, taxes, or any other costs or expenses whatsoever paid or accrued and without any deduction on account of losses.

E. Repealed by Ord. 2003-22. (Ord. 2003-22 § 6, 2003; Ord. 92-11 § 2, 1992)

5.10.020 Tax levied.

There is levied upon and shall be collected from every person engaged in a commercial parking business within the city a commercial parking tax in an amount equal to 30 percent of the gross proceeds of the commercial parking business less a discount to be determined by resolution of the city council. (Ord. 2004-32 § 1, 2004; Ord. 2000-47 § 1, 2000: Ord. 99-54 § 1, 1999: Ord. 92-47 § 1, 1992: Ord. 92-11 § 3, 1992)