Chapter 5.04
BUSINESS AND OCCUPATION TAX
Sections:
5.04.010 Statutory authorization.
5.04.070 Payment – AHMC 5.04.050(A) through (E) – When due.
5.04.080 Payment – AHMC 5.04.050(F) – When due.
5.04.110 Excess payment – Credit – Refund.
5.04.010 Statutory authorization.
The provisions of this chapter shall be deemed to be an exercise of the power of the City to license for revenue as provided for in RCW Title 35A. (Ord. C-025 § 2, 1982)
5.04.020 Definitions.
A. “Business Licensing Service” or “BLS” means the program within the Washington State Department of Revenue providing business licensing services to the City.
B. Engaging in Business.
1. The term “engaging in business” means commencing, conducting, or continuing in business, and also to exercise corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.
2. This section sets forth examples of activities that constitute engaging in business in the City, and establishes safe harbors for certain of those activities so that a person who meets the criteria may engage in de minimis business activities in the City without having to pay a business license fee. The activities listed in this section are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection (B)(1) of this section. If an activity is not listed, whether it constitutes engaging in business in the City shall be determined by considering all the facts and circumstances and applicable law.
3. 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, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, and 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.
4. If a 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, it need not register and obtain a business license:
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. This provision does not apply to any board of directors member or attendee engaging in business such as a member of a board of directors who attends a board meeting.
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 events.” Persons participating at a trade show shall review the City’s trade show or multiple vendor event ordinances.
f. Conducting advertising through the mail.
g. Soliciting sales by phone from a location outside the City.
5. A seller located outside the City merely delivering goods into the City by means of common carrier is not required to register and obtain a business license; provided, that it engages in no other business activities in the City. Such activities do not include those in subsection (B)(4) of this section.
6. The City expressly intends that engaging in business include any activity sufficient to establish nexus for purposes of applying the license fee 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.
C. “Person,” “company” or “firm,” used interchangeably in this chapter, means any individual, receiver, assignee, trustee in bankruptcy, trust, estate, firm, co-partnership, joint venture, club, company, joint stock company, business trust, municipal corporation, corporation, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise.
D. “Temporary business” means the sale of goods or services sold by a business being operated in the City for (1) 30 days or less, or (2) less than 48 hours, or operating out of a vehicle, truck trailer, or other mobile unit.
E. “Business” includes all kinds of vocations, occupations, professions, enterprises, establishments, and all other kinds of activities and matters, together with all devices, machines, vehicles and appurtenances used therein, any of which are conducted for private profit or benefit, either directly or indirectly, on any premises in the City.
F. “City” means the City of Airway Heights, Washington. (Ord. C-9171 § 1, 2018; Ord. C-206 § 1, 1990; Ord. C-120-2 § 2, 1986; Ord. C-120 § 2, 1986; Ord. C-025 § 1, 1982)
5.04.030 License required.
After October 1, 1982, no person, firm or corporation shall engage in or carry on any business, occupation, act or privilege for which a tax is imposed by AHMC 5.04.050 without first having obtained, and being the holder of, a license to do so, to be known as an occupation license. Each such person, firm or corporation shall promptly apply to the Clerk-Treasurer for such license upon such forms as the Clerk-Treasurer shall prescribe, giving such information as the Clerk-Treasurer shall deem reasonably necessary to enable said Clerk-Treasurer’s Office to administer and enforce this chapter; said Clerk-Treasurer shall thereupon issue such license to the applicant. This requirement shall not apply to any person, firm, or corporation holding a validly issued license issued by the City pursuant to this title during the effective period of such previously issued license, provided no license issued pursuant to any prior authority may be renewed except as herein provided. Such occupation license shall be personal and nontransferable and shall be valid as long as the licensee shall continue in said business and shall comply with this chapter. (Ord. C-025 § 3, 1982)
5.04.040 Exemptions.
The following entities and activities shall be exempt from the provisions of this chapter:
A. The City of Airway Heights, Washington, the state of Washington, and the United States;
B. Deliverers of bread and other bakery products, milk, dairy and poultry products, who maintain their business over regular routes;
C. Deliverers of newspapers and periodicals;
D. Deliverers to and persons soliciting orders from retail establishments for the delivery and sale of goods, wares and merchandise to retailers for resale;
E. Persons soliciting orders to be filled by shipment of goods in interstate commerce;
F. Any person or organization conducting a nonprofit enterprise when the enterprise is operated without private profit, for a public, charitable, educational, literary, fraternal or religious purpose;
G. The casual sale of items of personal property where the person conducting such sale is not regularly engaged in the business of selling items of personal property;
H. The rental of a single-family dwelling. This exemption shall not apply to a person operating a mobile home park;
I. The mere delivery in the City of any property purchased or acquired in good faith from such person at his regular place of business outside the City, provided the delivery of natural or bottled gas, oil, wood, coal, and electricity within the City shall not be excluded;
J. For the purposes of the license required by this chapter, any person or business whose annual value of products, gross proceeds of sales, or gross income of the business in the City is equal to or less than $2,000 and who does not maintain a place of business within the City shall submit a business license registration to the Director or designee. The threshold does not apply to regulatory license requirements or activities that require a specialized permit; and
K. The Kalispel Tribe of Indians and the Spokane Tribe of Indians, including their tribal members, who reside on reservation or trust land owned by such Tribe, that receive electricity and electric energy and/or natural, manufactured or mixed gas, etc., as further set forth in AHMC 5.04.050(B) and (C). The electric service company and/or natural gas seller shall not be required to collect the utility taxes imposed through AHMC 5.04.050(B) and (C); provided, that such Tribe or member meets the requirements of this section and delivers written notice to the electric service company and/or natural gas seller of their exempt status. (Ord. C-928 § 1, 2019; Ord. C-917 § 2, 2018; Ord. C-025 § 4, 1982)
5.04.050 Tax imposed.
From and after October 1, 1982, 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 the tax for the privilege of so doing business as hereinafter defined:
A. Upon any telephone business there shall be levied a tax equal to six percent of the total gross operating revenues derived from the operation of such business within the City. Gross operating revenues for this purpose shall not include gross charges which are passed on to the subscribers by a telephone company pursuant to tariffs required by regulatory order to compensate for the cost to the company of the tax imposed by this chapter.
“Telephone business” means the business of providing access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, or providing telephonic, video, data, or similar communication or transmission for hire, via a local telephone network, toll line or channel, or similar communication or transmission system. It includes cooperative or farmer line telephone companies or associations operating an exchange. “Telephone business” does not include the providing of cable television service. “Competitive telephone service” means the providing by any person of telephone equipment, apparatus, or service, other than toll service, which is of a type which can be provided by persons that are not subject to regulation as telephone companies under RCW Title 80 and for which a separate charge is made.
B. There is levied a tax on the sale, delivery or distribution of electricity and electrical energy and for the privilege of carrying on said business, such tax to be equal to six percent of the total gross operating revenue derived from sales of such electricity to ultimate users within the City; provided, however, that there shall not be any tax levied for the installation charges of electrical units.
C. There is levied a tax on the sale of natural, manufactured, or mixed gas, fuel oil, furnace oil, coal, wood, and all other fuels for residential, commercial or industrial consumption and for the privilege of carrying on said business, such tax to be equal to six percent of gross operating revenues from the sales of such within the limits of the City.
D. There is levied a tax on the sale of garbage collection service and for the privilege of carrying on said business; such tax to be equal to 19 percent of gross operating revenues from such sales. Notwithstanding any other provision herein, and whether or not the City shall collect the garbage, this tax shall apply and may be collected by the provider and from each person, firm or corporation paying for garbage collection service at the time of payment.
E. There is levied a tax on the sale of water and for the privilege of carrying on said business, such tax to be equal to 19 percent of gross operating revenues from such sales. Notwithstanding any other provision herein, and whether or not the City shall provide the water, this tax shall apply and may be collected by the provider and from each person, firm and corporation paying for water at the time of payment.
F. There is levied a tax upon the conduct of every other business or occupation and for the privilege of carrying on such business or occupation not within the jurisdiction limits of the City; such tax shall be $50.00 per calendar year or any part thereof.
G. There is levied a tax upon the conduct of every other business or occupation, and for the privilege of carrying on such business or occupation when a business employs one to nine full-time (40 hours per week) employees, such tax shall be $50.00 per calendar year or any part thereof; when a business employs 10 and over full-time (40 hours per week) employees, such tax shall be $100.00 per calendar year or any part thereof.
H. There is levied a tax upon the conduct of every temporary business or occupation for the privilege of carrying on such business or occupation the sum of $10.00.
I. There is levied a tax upon the conduct of every business requiring a 30-day business permit, for the privilege of carrying on such business or occupation, the sum of $25.00.
J. There is levied a tax on the business of the operation and sale of services for sewer utilities and for the privilege of carrying on the business, such tax to be equal to 19 percent of the total gross revenue derived from sale of sewer services; provided, however, that no tax shall be levied on connection charges in relation to connection to said sewer system. (Ord. C-1018 § 2, 2023; Ord. C-1017 § 2, 2023; Ord. C-1016 § 2, 2023; Ord. C-728 § 1, 2011; Ord. C-262 § 1, 1992; Ord. C-246 § 1, 1991; Ord. C-206 § 2, 1990; Ord. C-120-2 § 3, 1986; Ord. C-120 § 3, 1986; Ord. C-106 § 1, 1986; Ord. C-079 § 1, 1984; Ord. C-073 § 1, 1984; Ord. C-056 § 1, 1983; Ord. C-025 § 5, 1982)
5.04.060 Payment.
The tax imposed by AHMC 5.04.050(A) through (E) shall be due and payable in quarterly installments and remittance shall be made on or before the thirtieth day of the month next succeeding the end of the quarterly period in which the tax accrued and such quarterly periods are as follows:
First Quarter – January, February, March.
Second Quarter – April, May, June.
Third Quarter – July, August, September.
Fourth Quarter – October, November, December. (Ord. C-025 § 6, 1982)
5.04.070 Payment – AHMC 5.04.050(A) through (E) – When due.
The first payment made under the provisions of AHMC 5.04.050(A) through (E) shall be made by January 30, 1982, for the three-month period ending December 31, 1982. On or before said due date the taxpayer shall file with the City Clerk-Treasurer a written return upon such form and setting forth such information as the Clerk-Treasurer shall reasonably require, together with the payment of the amount of the tax. (Ord. C-025 § 7, 1982)
5.04.080 Payment – AHMC 5.04.050(F) – When due.
The tax imposed by AHMC 5.04.050(F) shall be paid at the time of commencement of business for the year in which business commences and annually on or before the fifteenth day of January of each year. (Ord. C-025 § 8, 1982)
5.04.090 Deductions.
In computing the tax, except under AHMC 5.04.050(F), there shall be deducted from said gross operating revenues the following items:
A. The amount of credit losses and uncollectibles actually sustained by the taxpayer;
B. Amounts derived from transactions in interstate or foreign commerce or from any business which the City is prohibited from taxing under the Constitution of the United States or the state of Washington;
C. Amounts derived by the taxpayer from the City. (Ord. C-025 § 9, 1982)
5.04.100 Records to be kept.
Each taxpayer taxable under the provisions of AHMC 5.04.050(A) through (E) shall keep records reflecting the amount of his said gross operating revenues, and such records shall be open at all reasonable times to the inspection of the City Clerk-Treasurer or his duly authorized subordinates, for verification of said tax returns or for the fixing of the tax of a taxpayer who shall fail to make such returns. (Ord. C-025 § 10, 1982)
5.04.110 Excess payment – Credit – Refund.
Any money paid to the City through error or otherwise not in payment of the tax imposed 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, hereunder, or upon the taxpayer’s ceasing to do business in the City be refunded to the taxpayer. (Ord. C-025 § 12, 1982)
5.04.120 Annexation copies.
Whenever the boundaries of the City are extended by annexation, all persons, firms and corporations subject to this chapter shall be provided copies of all annexation ordinances by the City. (Ord. C-025 § 13, 1982)
5.04.130 Penalty.
If any person, firm or corporation subject to the payment of the tax under AHMC 5.04.050 shall fail 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. If the tax referred to herein remains unpaid for 60 days from the date it is due, there shall be added to such tax an additional penalty of 10 percent of the amount due. 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. Willful failure to pay any tax required under the provisions of this chapter shall be a misdemeanor. Any person, firm or corporation incurring a penalty for failure to pay the business license tax, which penalty is adjudged against the person, firm or corporation in court proceedings for collection penalty who thereafter does not pay the unpaid penalties assessed or any subsequent tax or penalty due, shall be deemed to have willfully failed to pay the tax required. All sums due the City shall accrue interest at the rate of 12 percent per annum. (Ord. C-390, 1998; Ord. C-120-2, 1986; Ord. C-120, 1986)
Code reviser’s note: Ord. C-917 omitted the definitions of “Business” and “City” from AHMC 5.04.020. They have been retained per the intent of the city.