Chapter 3.24
TAXATION AND REGULATION
OF GAMBLING

Sections:

3.24.010  Definitions.

3.24.015  Cardrooms prohibited.

3.24.016  Legal nonconforming uses.

3.24.020  Persons subject to tax – Tax rate.

3.24.030  Tax to be computed and paid quarterly – Exceptions.

3.24.040  Administration and collection of tax.

3.24.050  Method of payment.

3.24.060  Failure to make timely payment of tax or fee.

3.24.070  Notice of intention to engage in activity to be filed.

3.24.080  Records required.

3.24.090  Overpayment or underpayment of tax.

3.24.100  Failure to make return.

3.24.110  Tax additional to others.

3.24.120  City clerk to make rules.

3.24.130  Taxes, penalties and fees constitute debt to municipality.

3.24.140  Limitation on right of recovery.

3.24.200  Violation – Penalties.

3.24.300  Severability.

3.24.010 Definitions.

For the purposes of this chapter, the words and terms used herein shall have the same meaning given to each pursuant to Chapter 9.46 RCW as same exists or may from time to time be amended; and as set forth under the Rules of the Washington State Gambling Commission, WAC Title 230 as the same exists or may hereafter be amended, unless otherwise specifically provided. [Ord. 3152 § 1, 1997; Ord. 1766 § 2, 1975].

3.24.015 Cardrooms prohibited.

The conduct or operation of social card games as commercial stimulants as defined in RCW 9.46.0217 and 9.46.0282 shall be prohibited. [Ord. 3328 § 1, 2000; Ord. 3319 § 1, 2000].

3.24.016 Legal nonconforming uses.

All land uses operating social card games which are currently in existence with the city, which were legally established under land use regulations in effect at the time of the establishment, and which have current gambling licenses issued by the State Gambling Commission may continue to operate at a current level; provided, that such level is authorized by the current gambling license. All such land uses operating social card games:

A. Shall be considered legal nonconforming uses under this act.

B. Shall not be expanded or intensified by the addition of tables at which social card games are played beyond the numbers authorized by current gambling license.

C. Shall permanently cease operation upon revocation or failure to renew license issued by the Washington State Gambling Commission.

D. Shall permanently cease operation of any table for social card games where operation is discontinued for more than 30 days.

E. Shall permanently cease operation if site or tables for social card games are relocated, reconstructed or redeveloped.

F. Shall permanently cease operation five years after the ordinance codified in this section is enacted. [Ord. 3328 § 2, 2000].

Code reviser's note: The Court of Appeals of Washington, Division I, held in Edmonds Shopping Center Associates v. City of Edmonds, 177 Wn. App. 344, 71 P.3d 233 (2003) that ECC 3.24.016 is preempted by state law – RCW 9.46.295.

3.24.020 Persons subject to tax – Tax rate.

There is hereby levied upon all persons, associations and organizations conducting or operating within this jurisdiction any of the activities listed below a tax to be paid to the city of Edmonds in the amount hereafter specified:

A. Bingo and Raffles. A tax in an amount equal to five percent of the gross receipts from a bingo game or raffle less the amount awarded as cash or merchandise prizes;

B. Amusement games shall not be subject to the levy of a tax; provided, however, that such games are authorized for operation pursuant to the provisions of the Washington Administrative Code, and shall be subject to the levy of a fee in the amount of two percent of the gross receipts from the amusement game, less the amount awarded as prizes for the purpose of providing for the city's actual costs of enforcement of the laws of the state of Washington and the ordinances of the city of Edmonds;

C. Punchboards or Pulltabs.

1. Bona fide charitable or nonprofit organizations shall pay a tax in an amount equal to 10 percent of the gross receipts from the operation of the games, less the amount awarded as prizes or merchandise; and

2. Commercial stimulant operators shall pay a tax in an amount equal to five percent of the gross receipts from the operation of punchboards and pulltabs;

D. Card Playing. Operators shall pay a tax equal to the maximum tax rate allowed by the Revised Code of Washington including RCW 9.46.110;

E. Exemptions.

1. Bingo and amusement games conducted by a bona fide charitable or nonprofit organization shall be exempt from the tax imposed by subsections A and B of this section, when such organization has no paid operating or management personnel, and gross receipt from bingo or amusement games or a combination thereof does not exceed $5,000 per year less the amount awarded as cash or merchandise;

2. No tax may be imposed on the first $10,000 of gross receipts, less the amount awarded as cash or merchandise prizes, from raffles conducted by any bona fide charitable or nonprofit organization. [Ord. 3328 § 4, 2000; Ord. 3304 § 1, 2000; Ord. 3152 § 2, 1997; Ord. 2746 § 1, 1990; Ord. 2687 § 1, 1988; Ord. 1943 §§ 1, 2, 1977; Ord. 1837, 1976; Ord. 1766 § 3, 1975].

3.24.030 Tax to be computed and paid quarterly – Exceptions.

A. Each of the various taxes imposed by this chapter shall be computed on the basis of activity during each calendar quarter year, be due and payable in quarterly installments and remittance therefor, together with the return forms, and be made to the city on or before the last day of the next month succeeding the quarterly period in which the tax accrued. Such payments shall be due on January 31st, April 30th, July 31st and October 31st of each respective year.

B. Whenever any person, association or organization taxed under this chapter quits business, sells out or otherwise disposes of its business, or terminates the business, any tax due shall become due and payable immediately, and such taxpayer shall, within 10 days thereafter, make a return and pay the tax due.

C. Whenever it appears to the city clerk that the collection of taxes from any person, association or organization may be in jeopardy, the clerk, after not less than 10 days' notice to the taxpayer, is authorized to require that the taxpayer remit taxes due and returns at such shorter intervals than otherwise provided, as the clerk deems appropriate under the circumstances. [Ord. 1766 § 4, 1975].

3.24.040 Administration and collection of tax.

A. Administration and collection of the various taxes imposed by this chapter shall be the responsibility of the city clerk. Remittance of the amount due shall be accompanied by a completed return form prescribed and provided by the clerk. The taxpayer shall be required to swear and affirm that the information given in the return is true, accurate and complete.

B. The clerk is authorized, but not required, to mail to taxpayers forms for returns. Failure of the taxpayer to receive such a form shall not excuse the taxpayer from making the return and timely paying all taxes due. The clerk shall have forms available to the public in reasonable numbers at the civic center during regular business hours.

C. In addition to the return form, a copy of the taxpayer's quarterly report to the Washington State Gambling Commission required by Chapter 230-08 WAC for the period in which the tax accrued, shall accompany remittance of the tax amount due. [Ord. 1766 § 5, 1975].

3.24.050 Method of payment.

Taxes payable hereunder shall be remitted to the city clerk on or before the time required by bank draft, certified check, cashier's check, personal check, money order or in cash. If payment is made by draft or check, the tax shall not be deemed paid until the draft or check is honored in the usual course of business, nor shall the acceptance of any sum by the clerk be an acquittance or discharge of the tax unless the amount paid is the full amount due. The return and copy of the quarterly report to the Washington State Gambling Commission shall be filed in the office of the city clerk after notation by the clerk upon the return of the amount actually received from the taxpayer. [Ord. 1766 § 6, 1975].

3.24.060 Failure to make timely payment of tax or fee.

A. If full payment of any tax or fee due under this chapter is not received by the city clerk on or before the due date, there shall be added to the amount owing, a penalty fee as follows:

1. Fifteen to 45 days late: 10 percent of the tax due, with a minimum penalty of $1.00;

2. Forty-six to 76 days late: 15 percent of the tax due, with a minimum penalty of $2.00;

3. Seventy-six or more days late: 20 percent of the tax due, with a minimum penalty of $3.00.

B. In addition to this penalty, the clerk shall charge the taxpayer interest of one percent of all taxes and fees due for each 30-day period, or portion thereof, that the amounts are past due.

C. Failure to make payment in full of all tax amounts, fees, interest and penalties due within 60 days following the day the tax amount initially became due shall be both a civil and criminal violation of this chapter. [Ord. 2590 § 1, 1986; Ord. 1766 § 7, 1975].

3.24.070 Notice of intention to engage in activity to be filed.

In order that the city may identify those persons who are subject to taxation under this chapter, each person, association or organization shall file with the city clerk a sworn declaration of intent to conduct an activity taxable under this chapter, upon a form to be prescribed by the clerk, together with a copy of the license issued therefor by the Washington State Gambling Commission. The filing shall be made not less than 10 days prior to conducting or operating the taxable activity. No fee shall be charged for such filing. Failure to timely file such declaration of intent shall not excuse any person, association or organization from any tax liability. [Ord. 1766 § 8, 1975].

3.24.080 Records required.

A. Each person, association or organization engaging in an activity taxable under this chapter shall maintain records respecting that activity which truly, completely and accurately disclose all information necessary to determine the taxpayer's tax liability hereunder during each base tax period. Such records shall be kept and maintained for a period of not less than three years. In addition, all information and items required by the Washington State Gambling Commission under Chapter 230-08 WAC, and the United States Internal Revenue Service, respecting taxation, shall be kept and maintained for the periods required by those agencies.

B. All books, records and other items required to be kept and maintained under this section shall be subject to, and immediately made available for inspection and audit at any time, with or without notice, at the place where such records are kept upon the demand of the city clerk or his designee for the purpose of enforcing the provisions of this chapter.

C. Where the taxpayer does not keep all of the books, records or items required to be kept or maintained under this section within the jurisdiction of the city so that the city clerk may examine them conveniently, the taxpayer shall either:

1. Produce and make available for inspection in this jurisdiction all of the required books, records or other items within 10 days following a request by the city clerk that he do so;

2. Bear the actual cost of inspection by the city clerk or his designee at the location of which books, records or items are located; provided, that a taxpayer choosing to bear these costs shall pay in advance to the city clerk the estimated costs thereof, including but not limited to, round trip fare by the most rapid means, lodging, meals and incidental expenses. The actual amount due or to be refunded for expenses shall be determined following the examination of the records.

D. A taxpayer who fails, neglects or refuses to produce such books and records either within or without this jurisdiction, in addition to being subject to other civil and criminal penalties provided by this chapter, shall be subject to a jeopardy fee or tax assessment by the city clerk which penalty fee or jeopardy assessment shall be deemed prima facie correct and shall be the amount of the fee or tax owing by the taxpayer unless he can prove otherwise. The taxpayer shall be notified by the city clerk by posting in the mails of the United States, addressed to the taxpayer to the last address on file with the city clerk, a statement of the amount of tax so determined by jeopardy assessment, together with any penalty and/or interest, and the total of such amounts shall thereupon become immediately due and payable. [Ord. 1766 § 9, 1975].

3.24.090 Overpayment or underpayment of tax.

If, upon application by a taxpayer for a refund or for an audit of his records, or upon any examination of the returns or records of any taxpayer, it is determined by the city clerk that within three years immediately preceding receipt by the city clerk of the application by the taxpayer for a refund or an audit, or in the absence of such an application, within three years immediately preceding the commencement by the city clerk of such examination:

A. A tax or other fee has been paid in excess of that properly due, the total excess paid over all amounts due to the city within such period of three years shall be credited to the taxpayer's account or shall be credited to the taxpayer at the taxpayer's option. No refund or credit shall be allowed for any excess paid more than three years before the date of such application or examination.

B. A tax or other fee has been paid which is less than that properly due, or no tax or other fee has been paid, the city clerk shall mail a statement to the taxpayer, showing the balance due, including the tax amount or penalty assessments and fees, and it shall be a separate, additional violation of this chapter, both civil and criminal if the taxpayer fails to make payment in full within 10 calendar days of such mailing. [Ord. 1766 § 10, 1975].

3.24.100 Failure to make return.

If any taxpayer fails, neglects or refuses to make and file his return as and when required under this chapter, the city clerk is authorized to determine the amount of tax payable, together with any penalty and/or interest assessed under the provisions of this chapter and by mail to notify such taxpayer of the amount so determined, which amount shall thereupon become the tax and penalty and/or interest and shall become immediately due and payable. [Ord. 1766 § 11, 1975].

3.24.110 Tax additional to others.

The taxes levied herein shall be additional to any license fee or tax imposed or levied under any law or other ordinance of the city except as otherwise herein expressly provided. [Ord. 1766 § 12, 1975].

3.24.120 City clerk to make rules.

The city clerk shall have the power, and it shall be his duty, from time to time, to adopt, publish and enforce rules and regulations not inconsistent with this chapter or other applicable laws for the purpose of carrying out the provisions hereof, and it is unlawful to violate or fail to comply with any such rule or regulation. [Ord. 1766 § 13, 1975].

3.24.130 Taxes, penalties and fees constitute debt to municipality.

Any tax due and unpaid under this chapter and all penalties or fees shall constitute a debt to the city and may be collected by court proceedings the same as any other debt or like amount which shall be in addition to all other existing remedies. [Ord. 1766 § 14, 1975].

3.24.140 Limitation on right of recovery.

The right of recovery by the city from the taxpayer for any tax provided hereunder shall be outlawed after the expiration of three calendar years from the date the tax became due. The right of recovery against the city because of overpayment of tax by any taxpayer shall be outlawed after the expiration of three calendar years from the date such payment was made. [Ord. 1766 § 15, 1975].

3.24.200 Violation – Penalties.

A. Any person violating or failing to comply with any of the provisions of this chapter, except ECC 3.24.015, or any lawful rule or regulation adopted by the city clerk pursuant thereto, upon conviction thereof, shall be subject to being punished by a fine in a sum not to exceed $250.00, or by imprisonment in jail for a term not exceeding 90 days or by both such fine and imprisonment. Any taxpayer who engages in or carries on in a gambling activity subject to a tax hereunder without having complied with the provisions of this chapter is guilty of a violation of this chapter for each day during which the gambling activity is conducted.

B. Any person violating ECC 3.24.015 shall have committed a gross misdemeanor and, upon conviction thereof, shall be punished by fine in an amount not to exceed $5,000 or imprisonment for a term not to exceed one year, or both such fine and imprisonment. [Ord. 3328 § 3, 2000; Ord. 1766 § 16, 1975].

3.24.300 Severability.

If any provision or section of this chapter is held void or unconstitutional for any reason, all other parts, provisions and sections of this chapter not expressly so held to be void or unconstitutional shall continue in full force and effect. [Ord. 1766 § 17, 1975].