Chapter 5.16 OCCUPATION TAX

The provisions of this chapter shall be deemed an exercise of the power of the city as provided in Chapter 35A.11 RCW to tax for revenue the privilege of engaging in business in the city. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.020 Violation – Penalty.

A. Any person violating or failing to comply with any of the provisions of this chapter or any lawful rule or regulation adopted by the clerk-treasurer shall be guilty of a misdemeanor.

B. Any taxpayer who engages in, or carries on, any business subject to a tax hereunder without having a license to do so, as provided in Chapter 5.01 CRMC, shall be guilty of a violation of this chapter for each day during which the business is so engaged in or carried on; and any taxpayer who fails or refuses to pay the license fee or tax or any part thereof, on or before the date due, shall be deemed to be operating without having a license to do so. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.030 Interpretation of provisions.

In the administration of this chapter and the interpretation of the provisions thereof, the city clerk-treasurer shall be guided by the rules and regulations as published and interpreted by the Excise Tax Division of the Department of Revenue of the state insofar as the same pertain to and are not inconsistent with the provisions and requirements of this chapter, and with the rules and regulations as made and adopted by resolution of the city council from time to time. [Ord. 2019-01 § 2 (Exh. A), 2019].

Article II. Definitions

5.16.040 Definitions generally.

In construing the provisions of this chapter, save when otherwise declared or clearly apparent from the context, the following definitions shall be applied as they appear in this article. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.050 Business.

“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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.060 Byproduct.

“Byproduct” means any additional product, other than the principal or intended product, which results from extracting or manufacturing activities and which has a market value, without regard to whether or not such additional product was an expected or intended result of the extracting or manufacturing activities. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.070 Cash discount.

“Cash discount” means a deduction from the invoice price of goods or charge for services which is allowed if the bill is paid on or before the specified date. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.080 Commercial or industrial use.

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

A. Any use as a consumer; and

B. The manufacturing of articles, substances or commodities. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.085 Competitive telephone 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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.090 Consumer.

“Consumer” means the following:

A. Any person who purchases, acquires, owns, holds or uses any article of tangible personal property irrespective of the nature of his 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 for the purpose:

1. Of resale as tangible personal property in the regular course of business; or

2. Of incorporating such property as an ingredient or component of real or personal property when installing, repairing, cleaning, altering, imprinting, improving, constructing or decorating such real or personal property of or for consumers; or

3. Of consuming such property in producing for sale a new article of tangible personal property or a new substance, of which such property becomes an ingredient or component or as 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;

B. Deleted during 2009 recodification;

C. Any person engaged in the business of contracting for 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 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 as defined in CRMC 5.16.430, in respect to tangible personal property when such person incorporates such property as an ingredient or component of such publicly owned street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel or trestle by installing, placing or spreading the property in or upon the right-of-way of such street, place, road, highway, easement, bridge, tunnel or trestle or in or upon the site of such mass public transportation terminal or parking facility;

D. Any person who is an owner, lessee or has the right of possession to or an easement in real or personal property which is being constructed, repaired, improved, cleaned, imprinted or otherwise altered by a person engaged in business, excluding only the United States and municipal corporations or political subdivisions of the state in respect to labor and services rendered to their real property which is used or held for public road purposes. Nothing contained in this or any other subsection of this section shall be construed to modify any other definition of “consumer.” [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.100 Engaging in business.

“Engaging in business” means the same as is found in CRMC 5.01.030(C). [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.110 Extractor.

“Extractor” means every person who, from his own land or from the land of another under a right or license granted by lease or contract, either directly or by contracting with others for the necessary labor or mechanical services, for sale or commercial or industrial use, mines, quarries, takes or produces coal, oil, natural gas, ore, stone, sand, gravel, clay, mineral or other natural resource product, or fells, cuts or takes timber, Christmas trees, or other natural products, or takes, cultivates or raises fish, shellfish, or other sea or inland water foods or products. It does not include persons performing under contract the necessary labor or mechanical services for others. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.120 Gross income of the business.

“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 service, 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 cost, interest, discount, delivery costs, taxes or any other expense whatever paid or accrued and without any deduction on account of losses. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.130 Gross proceeds of sale.

“Gross proceeds of sale” means the value proceeding or accruing from the sale of tangible personal property and/or for services rendered without any deduction on accounts of the cost of the property sold, the cost of materials used, labor cost, interest, discount paid, delivery cost, taxes or any other expense whatsoever paid or accrued and without any deduction on account of losses. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.140 Taxpayer.

“Taxpayer” includes any individual, group of individuals, corporation or association required to have a business license as provided in Chapter 5.01 CRMC, and liable for any tax, or for the collection of any tax hereunder, or who is engaged in any business, or who performs any act, for which a tax is imposed by this chapter. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.150 Manufacturer.

“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 use from his own materials or ingredients any articles, substances or commodities. When the owner of equipment or facilities furnishes, or sells to the customer prior to manufacture, all or a portion of the materials that become a part or whole of the manufactured article, the clerk-treasurer shall prescribe equitable rules for determining tax liability. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.160 Person or company.

“Person” or “company,” used interchangeably in this chapter, 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, corporation, 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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.170 Quarterly period.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.180 Retail store or outlet.

“Retail store or outlet” does not mean a device or apparatus through which sales are activated by coin deposits but the phrase shall include automats, or business establishments retailing diversified goods primarily through the use of such devices or apparatus. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.190 Sale at retail or retail sale.

A. “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:

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

2. 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; or

3. Purchases for the purpose of consuming the property purchased in producing for sale a new article of tangible 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.

B. The term includes 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 as provided in subsection (A) of this section following such use. The term also means every sale of tangible personal property to persons engaged in any business which is taxable under CRMC 5.16.430 and 5.16.460.

C. The term “sale at retail” or “retail sale” includes the sale of or charge made for tangible personal property consumed and/or for labor and services rendered in respect to the following:

1. 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, hotel, motel, rooming house, trailer camp or tourist camp for the exclusive use of the tenants thereof, and excluding services rendered in respect to live animals, birds and insects;

2. The construction, 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 also includes 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;

3. 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 does not include the charge made for janitorial services; and for purposes of this section, the term “janitorial services” means 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. “Janitorial services” does not include painting, papering, repairing, furnace or septic tank cleaning, snow removal or sandblasting;

4. 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;

5. The sale of and charge made for the furnishing of lodging and all other services by a hotel, rooming house, tourist camp, motel, trailer court 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;

6. The sale of or charge made for tangible personal property, labor and services to persons taxable under subsections (C)(1) through (5) of this section 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 this subsection shall be construed to modify subsection (C)(1) of this section and nothing contained in subsection (C)(1) of this section shall be construed to modify this subsection.

D. The term “sale at retail” or “retail sale” includes 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 engaged in the following business activities:

1. Amusements and recreation businesses including but not limited to golf, pool, billiards, skating, bowling, ski lifts and tows and others;

2. Abstract, title insurance and escrow businesses;

3. Credit bureau businesses;

4. Automobile parking and storage garage businesses.

E. The term also includes the renting or leasing of tangible personal property to consumers.

F. The term also includes the providing of competitive telephone service.

G. The term does not 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 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, nor does it include sales of feed, seed, fertilizer and spray materials to persons for the purpose of producing for sale any agricultural product whatsoever, including milk, eggs, wool, fur, meat, honey or other substances obtained from animals, birds, or insects but only when such production and subsequent sale are exempt from tax under CRMC 5.16.530(C), nor shall it include sales of chemical sprays or washes to persons for the purpose of postharvest treatment of fruit for the prevention of scald, fungus, mold or decay. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.200 Sale at wholesale or wholesale sale.

“Sale at wholesale” or “wholesale sale” means any sale of tangible personal property which is not a sale at retail and means 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 by CRMC 5.16.190, when rendered to or for consumers; provided, that the term “real or personal property,” as used in this section, does not include any natural products named in CRMC 5.16.110. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.210 Sale and casual or isolated sale.

A. “Sale” means any transfer of the ownership, title to, or possession of property for a valuable consideration and includes any activity classified as a “sale at retail” or “retail sale” under CRMC 5.16.190. 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 furnishings of food, drink or meals for compensation whether consumed upon the premises or not.

B. “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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.220 Successor.

“Successor” means any person who shall, through direct mesne conveyance, purchase or succeed to the business, or portion thereof, or the whole or any part of the stock of goods, wares, merchandise or fixtures or any interest therein of a taxpayer quitting, selling out, exchanging or otherwise disposing of his business. 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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.230 Tax year or taxable year.

“Tax year” or “taxable year” means the calendar year. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.240 To manufacture.

“To manufacture” embraces all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different or useful substance or article of tangible personal property is produced for sale or commercial or industrial use, and includes the production or fabrication of specially made or custom-made articles. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.250 Treasurer.

“Treasurer” means the clerk-treasurer of the city. For purposes of this chapter, “clerk-treasurer” and “city clerk” shall be synonymous. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.260 Tuition fee.

“Tuition fee” includes library, laboratory, health service and other special fees, and amounts charged for room and board by an educational institution when the property or service for which such charges are made is furnished exclusively to the students or faculty of such institution. “Educational institution,” as used in this section, means only those institutions created or generally accredited as such by the state and offering to students an educational program of a general academic nature or those institutions which are not operated for profit and which are privately endowed under a deed of trust to offer instruction in trade, industry and agriculture, but not including specialty schools, business colleges, other trade schools, or similar institutions. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.270 Value proceeding or accruing.

“Value proceeding or accruing” means the consideration, whether money, credits, rights or other property expressed in terms of money, 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 clerk-treasurer may provide by regulation that the value proceeding or accruing from sales on the installment plan under conditional contracts or sale may be reported as of the dates when the payments become due. [Ord. 2019-01 § 2 (Exh. A), 2019].

Article III. Licenses and Occupation Tax

5.16.280 Business license required.

Every person who is subject to the provisions of this chapter must obtain a business license as provided in Chapter 5.01 CRMC before engaging in any business or performing any act for which a tax is required under this chapter. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.370 Occupation tax – Generally.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.380 Occupation tax – For extractors.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.390 Occupation tax – For manufacturers.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.400 Occupation tax – For wholesale sales.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.410 Occupation tax – For retail sales.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.420 Occupation tax – For buyers and wholesale sellers of grain.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.430 Occupation tax – For printing and contractors.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.440 Occupation tax – For banking.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.450 Occupation tax – For radio and television.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.460 Occupation tax – For other business or service activities.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.470 Occupation tax – For public utilities.

A. Upon every person engaging within this city in any one or more of the businesses hereinafter mentioned, the tax shall be equal to the gross operating revenue of the business multiplied by the rate set out after the business as follows:

1. The business of selling or furnishing cable television, three percent;

2. The business of selling or furnishing water, six percent;

3. The business of selling or furnishing or distributing electrical energy within the city, exclusive of the revenue derived from the sale of electrical energy for the purpose of resale, six percent; provided, however, that to encourage the location of new manufacturing industries within the city and the expansion of existing manufacturing industries therein, thereby increasing the ultimate revenue to the city, said tax shall not apply to that portion of the monthly billing in excess of $500.00 charged to any person or company using electrical energy primarily for manufacturing purposes;

4. Upon any telephone business there shall be levied a tax equal to six percent of the total gross operating revenues, excluding revenue from intrastate toll, derived from the operation of such businesses within the city. Gross operating revenues for this purpose shall not include 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 section.

“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 line for hire, via a local telephone network toll line or channel, or similar communication or transmission toll line or channel, or similar communication or transmission companies or associations operating an exchange. “Telephone business” does not include the providing of competitive telephonic service, nor the providing of cable television service;

5. The business of selling or furnishing sanitary sewer service, six percent;

6. The business of selling or furnishing a garbage or refuse collection service, three percent;

7. The business of selling or furnishing or distributing natural gas for which business a utility tax is paid to the city, six percent; provided, however, that to encourage the location of new manufacturing industries within the city and the expansion of existing manufacturing industries therein, thereby increasing the ultimate revenue to the city, said tax shall not apply to that portion of the monthly billing in excess of $500.00 charged to any person or company using natural gas primarily for manufacturing purposes;

8. The business of selling or furnishing stormwater utility service, six percent.

B. “Gross operating revenue” means the value proceeding or accruing from the performance of the particular public service or transportation business involved, including operations incidental thereto, but without any deduction on account of the cost of the commodity furnished or sold, the cost of material used, labor costs, interest, discount, delivery cost, taxes or any other expense whatsoever, paid or accrued and without any deduction on account of losses. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.480 Occupation tax – Multiple activities taxable.

Every person engaging in activities which are within the purview of the provisions of two or more subsections in CRMC 5.16.470 shall be taxable under each subsection applicable to the activities engaged in, and shall be required to pay a tax under each schedule applicable to the business engaged in. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.490 Tax not to be passed on.

It is not the purpose of this chapter that the tax herein levied upon persons engaging in business shall be construed as taxes upon the purchases of customers, but it is the intention that such tax shall be levied upon, and collectible from, the persons engaging in the business activities herein designated and that such tax shall constitute a part of the operating overhead of such persons engaging in business. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.500 Value of products – How determined.

A. 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, except:

1. Where such products, including byproducts, are extracted or manufactured for commercial or industrial use;

2. Where such products, including byproducts, are shipped or transported 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.

B. In the above cases the value shall correspond as nearly as possible to the gross proceeds from sales in this city 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. The clerk-treasurer shall prescribe uniform and equitable rules for the purpose of ascertaining such values. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.510 Business within and without city – Apportionment.

A. Any person rendering services and maintaining places of business both within and without this city shall, for the purpose of computing tax liability under this chapter, apportion to this city that portion of his gross income which is derived from services rendered within this city. Where such apportionment cannot be accurately made by separate accounting methods, the taxpayer shall apportion to this city that portion of his total income which the cost of doing business within the city bears to the total cost of doing business both within and without the city.

B. Persons maintaining an office, plant, warehouse or other business establishment which is partly within and partly outside the city shall be taxable on the value of products, gross proceeds of sale or gross income of the business attributable to business within the city as ascertained by the clerk-treasurer and the taxpayer after consideration of the facts. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.520 Sellers within scope of chapter – Burden of proof.

A. Every cosignee, bailee, factor or auctioneer having either actual or constructive possession of tangible personal property, or having possession of the documents of title thereto, with power to sell such tangible personal property in his or its own name and actually so selling shall be deemed the seller of such tangible personal property within the meaning of this chapter; and further, the cosigner, bailor, principal or owner shall be deemed a seller of such property to the cosignee, bailee, factor or auctioneer.

B. The burden shall be upon the taxpayer in every case to establish the fact that such taxpayer is not engaged in the business of selling tangible personal property but is acting merely as a broker or agent in promoting sales for a principal; such claim will be allowed only when the taxpayer’s account records are kept in such manner as the clerk-treasurer shall by general regulation provide. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.530 Exemptions.

The provisions of this chapter shall not apply to:

A. Any person in respect to a specific business activity enumerated in this section and for which a tax liability, other than the license fee required under Chapter 5.01 CRMC, is specifically imposed by other ordinances of the city, and amendments thereto or reenactments thereof, the specific purpose of which is to regulate and/or tax the following enumerated activities:

1. Admission tax;

2. Taxicab business;

3. Auctions and closing out sales (jewelry);

4. Pool or billiard tables;

5. Carnivals, street fairs, and circuses;

6. Dances and dance halls;

7. Detectives and detective agencies;

8. Music for hire;

9. Merchant patrolmen;

10. Skill games;

B. Any person in respect to insurance business upon which a tax is based on gross premiums is paid to the state; provided, however, that the provisions of this subsection shall not exempt any person engaging in the business representing any insurance company, whether as general or local agent or acting as broker for such company; and provided further, that the provisions of this subsection shall not exempt any bonding company from tax with respect to gross income derived from the completion of any contract as to which it is a surety, or as to any liability as successor to the liability of the defaulting contractor;

C. Any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats or any farm produce or edibles raised, caught, produced or manufactured and sold by any farmer or gardener;

D. Any persons in respect to the business of conducting boxing contests and sparring and/or wrestling matches and exhibitions for the conduct of which a license must be secured from the State Athletic Commission;

E. Any person in respect to the business of conducting race meets for the conduct of which a license must be secured from the State Horse Commission;

F. Any person in respect to his employment in the capacity of an employee or servant as distinguished from that of an independent contractor;

G. Fraternal benefit societies or fraternal fire insurance associations, as described in RCW Title 48; nor to beneficiary corporations or societies organized under and existing by virtue of RCW Title 24, if such beneficiary corporations or societies provide in their bylaws for the payment of death benefits. Exemption is limited, however, to gross income from premiums, fees, assessments, dues or other charges directly attributable to the insurance or death benefits provided by such societies, associations or corporations;

H. Amounts derived as compensation for services rendered or to be rendered to patients by a hospital, as defined in Chapter 70.41 RCW, devoted to the care of human beings with respect to the prevention or treatment of disease, sickness or suffering, when such hospital is operated by the United States, or any of its political subdivisions;

I. Amounts derived as compensation for services rendered to patients by a hospital, as defined in Chapter 70.41 RCW, which is operated as a nonprofit corporation, nursing homes and homes for unwed mothers operated as religious or charitable organizations, but only if no part of the net earnings received by such an institution inures, directly or indirectly, to any persons other than the institution entitled to exemption hereunder. In no event shall any such exemptions be allowed, unless the hospital building is entitled to exemption from taxation under property tax laws of the state;

J. Amounts derived from the lease, rental or sale of real estate; provided, however, that nothing in this chapter shall be construed to allow a deduction or exemption of amounts derived from engaging in any business wherein a mere license to use or enjoy real property is granted, or to allow a deduction or exemption of amounts received as commission from the sale or rental of real estate;

K. Credit unions organized under the laws of the state or the United States;

L. The business of manufacturing, selling or distributing motor vehicle fuel, as that term is defined in Chapter 82.36 RCW;

M. Liquor, as defined by state law;

N. Gross sales or gross income received by nonprofit organizations from the operation of sheltered workshops. The term “sheltered workshops,” as used in this section, means the same as set forth in RCW 82.04.385, as the same now exists or may hereinafter be amended;

O. Amounts or value paid or contributed to any political subdivision of the state, or municipal corporation of the state or quasi-municipal corporation of the state, representing payments of special assessments or installments thereof and interests and penalties thereon, charges in lieu of assessments, or any other charges, payments or contributions representing a share of the cost of capital facilities constructed or to be constructed or for the retirement of obligations and payment of interest thereon issued for capital purposes. Service charges shall not be included in this exception even though used wholly or in part for capital purposes. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.540 Deductions allowed in computing tax – Enumerated.

In computing the tax there may be deducted from the measure of the tax the following items:

A. Amounts derived by persons, other than those engaging in banking, loan, security or other financial business, from investments or the use of money as such, and also amounts derived as dividends by a parent from its subsidiary corporations;

B. Amounts derived from bona fide initiation fees, dues, contributions, donations, tuition fees and endowment funds. The provisions of this subsection shall not be construed to exempt any person, association or society from tax liability upon selling tangible personal property or upon providing facilities or services for which a special charge is made to members or others; provided, that dues for, or graduated upon, the amount of service rendered by the recipient thereof are not permitted as a deduction hereunder;

C. The amount of cash discount actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount under the extractive or manufactured method, the reported values of which, for the purpose of this tax, have been computed according to the provisions of CRMC 5.16.500;

D. The amount of credit losses actually sustained by a taxpayer whose regular books of account are kept upon an accrual basis;

E. Amounts derived from business which the city is prohibited from taxing under the Constitution or laws of the United States;

F. Amounts derived from the sale of commodities to persons in the same public service as the seller, for resale as such within this city. This deduction is allowed only with respect to water distribution and light and power businesses which furnish water and/or electrical energy in the performance of public business;

G. Subcontractors, as defined in this code, may deduct amounts received from a building contractor as the subcontractor’s portion of the consideration due for goods and services furnished jointly by both the contractor and subcontractor; provided, that the contractor shall withhold and pay to the city the amount of the taxes otherwise due from the subcontractor under this chapter; and provided further, that the subcontractor shall show on the reverse side of his bimonthly returns as required in this chapter, in detail, the name and amounts received from each contractor on each separate contract;

H. Amounts derived by a political subdivision of the state from another political subdivision of the state as compensation for services which are within the purview of CRMC 5.16.460;

I. Municipal sewage utilities and other public corporations imposing and collecting fees or charges for sewer service may deduct from the measure of the tax amounts paid to another municipal corporation or governmental agency for sewerage interception, treatment or disposal. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.550 Quarterly period payment – Returns.

A. The tax imposed by this chapter shall be due and payable in quarterly installments, and remittance therefor shall be made on or before the fifteenth day of the month next succeeding the end of the quarterly period in which the tax accrued, that is April 15th, July 15th, October 15th and January 15th of each year. The remittance shall be made as provided in this chapter and shall be accompanied by a return on a form to be provided and prescribed by the clerk-treasurer. The taxpayer shall be required to affirm that the information on the return is true and complete.

B. Whenever a person engages in one or more business activities and the value of products, gross proceeds of sales or gross income of the taxable business from all classifications is less than $1,000 for a quarterly period, such taxpayers will be required to file the return but not be required to pay the business and occupation tax due on said quarterly returns. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.560 Additional to others – Exception.

The tax levied in this chapter shall be additional to any tax imposed or levied under any law or any other ordinance of the city except as herein otherwise expressly provided. [Ord. 2019-01 § 2 (Exh. A), 2019].

Article IV. Payment of Fees

5.16.570 Payment by uncertified check – Extension of time for payment.

A. The tax payable hereunder shall, at the time the return is required to be filed hereunder, be paid to the city by bank draft, certified check, cashier’s check, personal check, money order or in cash. If payment is made by bank draft or check, the tax shall not be deemed paid unless the check or draft is honored in the usual course of business. A service fee of $2.00 shall be assessed for all bank drafts or checks which are dishonored or returned because of insufficient funds. The acceptance of any sum by the city shall not be an acquittance or discharge of the tax due unless the amount of the payment is in full. The return shall be presented to the clerk-treasurer, who shall endorse thereon the date and amount of payment received by him and file the same.

B. The clerk-treasurer is authorized, but not required, to mail to taxpayers forms for applications for registration certificates and forms for returns, but failure of the taxpayer to receive any such forms shall not excuse the taxpayer from making application for and securing the registration certificate, making returns and payments of the tax, when and as due hereunder.

C. The clerk-treasurer for good cause shown may extend the time for making and filing any return required under this chapter, and may grant such reasonable additional time within which to make and file such returns as he may deem proper; provided, however, that no extension shall be in excess of 30 days. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.580 Delinquent payment – Penalty.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.590 Failure or refusal to pay – Notice – Limitation on time to collect or correct.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.600 To constitute debt to city – Collection.

Any license 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 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. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.610 Length of time records to be preserved – Out-of-state concerns.

A. It shall be the duty of every person liable for any tax provided for by this chapter to keep and preserve for a period of five years such suitable records as may be necessary to determine the amount of any tax for which he may be liable hereunder; and all books, records and invoices shall be open for examination at any time by the city council, or its duly authorized agent.

B. In the case of an out-of-state person or concern which does not keep the necessary books or records within the city, it shall be sufficient if it produces within the city such books and records as shall be required by the city council, or bears the cost of examination by an agent authorized or designated by the city council at the place where such books and records are kept. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.620 Returns confidential – Inspection limited.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.630 Underpayment of fee – Notice – Penalty for nonpayment.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.640 Overpayment of fee – Credit to be given – Refunds at end of year.

If, upon examination of any return, it appears that a tax has been paid in excess of that properly due, the city clerk-treasurer shall inform the license payer by mail and the amount of such excess shall be credited against any tax or installment thereof then due or to become due from the license payer under any subsequent return for the same year, and any balance of such excess at the end of such year, or upon ceasing business, shall be refunded upon request of the license payer by means of vouchers approved by the city council and by the issuance of warrants drawn upon and payable from the general fund of the city. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.650 Refunds of erroneous payment of tax and funds due under judgment.

A. Any money paid to the city through error and not in payment of any tax due hereunder, upon the request of the person by whom such payment was made, shall be refunded as provided in CRMC 5.16.640.

B. Any judgment for which a recovery is granted by any court of competent jurisdiction, not appealed from, for tax, interest, and penalties, upon presentation to the city clerk-treasurer of a certified copy of the order of judgment of the court, shall be refunded. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.660 Appeals from amount of fee assessed – Procedure.

A. Any taxpayer aggrieved by the amount of the fee or tax found by the clerk-treasurer to be required under the provisions of this chapter may appeal to the city council from such findings by filing a written notice of appeal with the clerk-treasurer within five days from the time such taxpayer was given notice of such amount. The clerk-treasurer shall, as soon as practicable, fix a time and place for the hearing of such appeal, which time shall not be more than 20 days after the filing of the notice of appeal, and he shall cause a notice of the time and place thereof to be mailed to the appellant. At such hearing the taxpayer shall be entitled to be heard and to introduce evidence in his own behalf. The city council shall thereupon ascertain the correct amount of the fee or tax by resolution and the clerk-treasurer shall immediately notify the appellant thereof by mail, which amount, together with costs of the appeal, if appellant is unsuccessful therein, must be paid within three days after such notice is given.

B. The city council may require the taxpayer so aggrieved to produce any pertinent books and records substantiating his claim. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.670 Notices required under chapter – Method – Failure to receive – Effect.

Any notice required by this chapter to be mailed to any taxpayer shall be sent by ordinary mail, addressed to the address of the taxpayer as shown by the records of the city clerk-treasurer, or if no such address is shown, to such address as the city clerk-treasurer is able to ascertain by reasonable effort. Failure of the taxpayer to receive any such mailed notice shall not release the taxpayer from any tax or any penalties thereon, nor shall such failure operate to extend any time limits set by the provisions of this chapter. [Ord. 2019-01 § 2 (Exh. A), 2019].

5.16.910 Effective date and termination.

Deleted during 2009 recodification. [Ord. 2019-01 § 2 (Exh. A), 2019].