Chapter 8.04
Gambling Tax

Sections:

8.04.010 Definitions.

8.04.020 Tax Levied.

8.04.030 Exemptions.

8.04.040 Time of Payment.

8.04.050 Tender of Payment.

8.04.055 Allocation of Payment.

8.04.060 Procedure upon Underpayment.

8.04.070 Procedure upon Overpayment.

8.04.080 Interest and Penalties.

8.04.090 Pre-Registration.

8.04.100 Furnishing of Returns.

8.04.110 Procedure upon Failure to Make Return.

8.04.120 Books and Records.

8.04.130 Rules and Regulations.

8.04.150 Chapter Cumulative.

8.04.160 Violation – Penalty.

8.04.170 Severability.

8.04.010 Definitions.

The definitions in RCW chapter 9.46 and WAC chapter 230-02 apply throughout this chapter.

8.04.020 Tax Levied.

There is levied upon every person, association and organization conducting or operating within the city any gambling activity authorized by state law a tax upon gross receipts or gross revenues of the activity as follows:

A.  amusement games: two percent of gross receipts from the amusement game less the amount awarded as prizes except as otherwise provided (RCW 9.46.110(3)(b));

B.  bingo games or raffles: gross receipts less the amount awarded as cash or merchandise prizes during the taxable period, multiplied by five percent or the maximum rate permitted by law, whichever is greater (RCW 9.46.110(3)(a));

C.  punchboards and pull tabs: ten percent of gross receipts from the operation of the games, less the amount awarded as cash or merchandise prizes (RCW 9.46.110(3)(e));

D.  social card games: twenty percent of gross revenue from such games.

[Ord. C32512 § 1; Passed: 10/25/1999]

8.04.030 Exemptions.

The tax is not imposed with respect to amusement or bingo games or raffles, or a combination of these activities, conducted by a bona fide charitable or nonprofit organization which has:

A.  no paid operating or management personnel; and

B.  gross receipts from these activities not exceeding five thousand dollars per year, less the amount awarded as prizes (RCW 9.46.110(3)(c)).

[Ord. C31948; Passed: 7/14/1997]

8.04.040 Time of Payment.

A.  The tax imposed by this chapter is due and payable quarterly. Every person subject to this tax is required to file a verified return, in such form as prescribed by the city auditor, and remit the tax due by the last day of the month next following the end of each quarter, namely, by January 31st, April 30th, July 31st and October 31st.

B.  The city auditor may authorize a taxpayer whose annual tax liability is less than twenty dollars to file annual, instead of quarterly, returns.

C.  A person commencing to operate a gambling activity during a quarter shall, within the time provided in subsection (A) of this section, file his first return and make the first remittance based upon that portion of the quarter in which he was engaged in such activity.

D.  Whenever a taxpayer quits or disposes of the business, he shall within ten days make a return and pay the accrued tax due.

E.  When a taxpayer is operating on a short-term or transitory basis, or when there is reason to believe collection of the tax may be in jeopardy, the city auditor, upon notice, may require reporting and remittance at intervals shorter than quarterly or annually.

[Ord. C24659 § 3]

8.04.050 Tender of Payment.

A.  Every person subject to the tax under this chapter is required to make timely payment by bank draft, certified check, cashier’s check, check, money order, or cash. Tender other than by cash is not payment unless the draft or check is accepted and honored in the usual course of business.

B.  Acceptance of a payment by the city treasurer does not acquit or discharge the tax unless the payment is for the full amount of the tax then due.

[Ord. C24659 § 4]

8.04.055 Allocation of Payment.

All amounts received in payment under this chapter are applied first to any outstanding penalty and then interest and, last, the tax.

[Ord. C29981; Passed: 2/11/1991]

8.04.060 Procedure upon Underpayment.

A.  Whenever it may appear to the city auditor that a payment has been made in an amount less than that properly due, the auditor notifies the taxpayer, in writing, of the amount found due and directs that payment be made within ten days or such longer time as the auditor may determine.

B.  The auditor may not so reassess a taxpayer who has underpaid any sum more than four years after the close of the particular tax year involved, unless the taxpayer has practiced fraud or material misrepresentation or unless the taxpayer has waived this limitation.

[Ord. C24659 § 8]

8.04.070 Procedure upon Overpayment.

A.  Whenever, upon application by a taxpayer for a refund or otherwise, the city auditor determines that a sum paid under this chapter was in excess of the amount properly due, the auditor shall credit the overpayment to the taxpayer’s account or refund it at the taxpayer’s option.

B.  No credit or refund can be given for overpayment made earlier than four years prior to the application for refund or discovery of the overpayment.

[Ord. C24659 § 9]

8.04.080 Interest and Penalties.

A.  When any payment is not received by the date specified in SMC 8.04.040, or the payment is not of the full amount due, there is added a penalty as follows:

1.   one to thirty days late: ten percent of tax or one dollar;

2.   thirty-one to sixty days late: fifteen percent of tax or two dollars;

3.   over sixty days late: twenty percent of tax or three dollars;

whichever is greater.

B.  In addition to the penalty provided in subsection (A) of this section, interest is charged at the rate of one percent of the amount of the tax for every thirty-day period or fraction from due date to date of payment.

C.  Interest and penalties are computed on the amount of tax unpaid at the time.

D.  As a condition of granting any taxpayer an extension of time, the auditor charges interest at the rate of one percent of the tax due from the due date.

E.  The City pays interest on an amount overpaid at the rate of three percent per annum.

F.  The auditor may waive any of the penalties provided in this section, but not interest, in a particular case when he finds that the taxpayer’s failure to comply was due to serious circumstances beyond the taxpayer’s control.

[Ord. C29981; Passed: 2/11/1991]

8.04.090 Pre-Registration.

Any person, association, or organization proposing to conduct a gambling activity taxable under this chapter is required to first file with the city auditor, on prescribed forms, a declaration of intent accompanied by a copy of the license for such activity issued by the Washington State Gambling Commission.

[Ord. C24659 § 6]

8.04.100 Furnishing of Returns.

The auditor is directed to timely furnish to all persons having paid the tax imposed by this chapter or having filed a declaration of intent under SMC 8.04.090 forms for returns. The failure to receive such forms does not excuse any person from full compliance with this chapter.

[Ord. C24659 § 4]

8.04.110 Procedure upon Failure to Make Return.

Whenever any taxpayer fails to file the return as and when required, the auditor may use any information available and determine the amounts of tax, interest and penalties payable. When the auditor mails notice of the amount so determined to the taxpayer, the amount so determined becomes immediately due and payable.

[Ord. C24659 § 10]

8.04.120 Books and Records.

A.  Every person subject to the tax under this chapter is required to keep and maintain for a period of five years such books and records as will accurately reflect the sums received which are taxable. All such books and records are subject to inspection and audit at any reasonable time, with or without notice, at the place where such records are kept upon demand by the city auditor or a designee for the purpose of determining compliance with this chapter.

B.  In the case of a taxpayer who maintains the required books and records in a place not in the city, the taxpayer can comply with this section by either producing the records as directed by the auditor or bearing the cost of examination by City personnel at the place where they are kept. Such taxpayer electing to have the examination at the place where the records are kept is required to pay in advance the estimated costs for transportation, lodging, meals and related expenses. Adjustment of the costs advanced will be made based on actual costs after the examination is completed.

C.  Each operator of a punchboard must retain for inspection each punchboard removed from operation, unless by surrender to the State Gambling Commission, with its prize flare attached for a period of six months. Each operator of pull tabs must retain for inspection for each series removed from operation, unless by surrender to the State Gambling Commission, the prize display flare containing the commission’s identification stamp together with the unused pull tabs in that series, for a period of six months.

[Ord. C24659 § 7]

8.04.130 Rules and Regulations.

The city auditor is authorized to make and promulgate rules and regulations for the administration and enforcement of this chapter.

[Ord. C24659 § 13]

8.04.150 Chapter Cumulative.

The tax imposed by this chapter is in addition to, and not in lieu of, any other tax or license fee

[Ord. C24659 § 12]

8.04.160 Violation – Penalty.

It is unlawful for any person, association, or organization to fail to comply with any requirement of this chapter or the rules and regulations promulgated hereunder. Each day a violation continues is a separate offense. Each violation is punishable by fine not to exceed three hundred dollars, imprisonment for not more than ninety days, or both such fine and imprisonment.

[Ord. C24659 § 14]

8.04.170 Severability.

Should any provision of this chapter or its application to any person or circumstance be held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances is not affected.

[Ord. C24659 § 17]