Chapter 3.21
GAMBLING TAX*
Sections:
3.21.010 Gambling activities and tax.
3.21.020 Administration and collection.
3.21.030 Filing declaration of intent.
3.21.040 Tax due.
3.21.041 Repealed.
3.21.042 Repealed.
3.21.043 Repealed.
3.21.050 Records required.
3.21.051 Repealed.
3.21.052 Repealed.
3.21.053 Repealed.
3.21.054 Repealed.
3.21.055 Taxes, penalties, service charges, and fees constitute debt to municipality.
3.21.060 Penalties.
*State law reference(s) – Gambling, RCW 9.46.010 et seq.; authority to tax certain gambling activity, RCW 9.46.110.
3.21.010 Gambling activities and tax.
A. Tax imposed. In accordance with RCW 9.46.110, the following taxes are levied upon all persons, associations, and organizations who have been duly licensed by the Washington State Gambling Commission to conduct or operate gambling activities:
1. For bingo games and raffles, a tax rate of five percent of the gross receipts received therefrom less the amount awarded as cash or merchandise prizes;
2. For amusement games, a tax rate of two percent of the gross receipts from any such amusement games less the amount awarded as prizes, which is an amount less than the actual amount of costs of enforcement by the city of the provisions of Chapter 9.46 RCW;
3. For punch boards and pull-tabs for bona fide charitable or nonprofit organizations and for commercial stimulant operators, a tax rate of 10 percent based on the gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes;
4. Commencing July 1, 2013, for social card games not prohibited by subsection (D) of this section, a tax rate of seven percent of the gross revenue from those games. Beginning January 1, 2017, this tax rate will return to 11 percent of the gross revenue from those games.
B. 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 exist 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 herein.
C. Exemption from tax. No tax shall be imposed under the authority of this chapter on bingo or amusement games when such activities or any combination thereof are conducted by any bona fide charitable or nonprofit organization as defined in Chapter 9.46 RCW, which organization has no paid operating or management personnel and has gross receipts from bingo or amusement games, or any combination thereof, not exceeding $5,000 per year less the amount awarded as cash or merchandise prizes. For raffles conducted by bona fide charitable or nonprofit organizations, no tax shall be imposed under this chapter on the first $10,000 per year of gross receipts, less the amount awarded as cash or merchandise for prizes.
D. House-banked card rooms. Pursuant to RCW 9.46.295 and to the city’s police power and legislative authority, the operation or conduct of house-banked card rooms by any person, association, or organization as a commercial stimulant, as defined in Chapter 9.46 RCW, is allowed within the city of Kent pursuant to KCC Title 15. It is further provided that bona fide charitable or nonprofit organizations, as defined in Chapter 9.46 RCW, may operate or conduct social card games if said social card games have been duly licensed by the Washington State Gambling Commission and if they are otherwise operated or conducted in compliance with the provisions of this chapter. A violation of this section shall not be subject to KCC 1.01.140.
(Ord. No. 1888, § 1; Ord. No. 2050, § 1; Ord. No. 3362, § 1, 9-16-97; Ord. No. 3460, § 1, 6-1-99; Ord. No. 3949, § 1, 4-6-10; Ord. No. 4084, § 1, 5-21-13; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19. Formerly Code 1986, § 5.16.010)
State law reference(s) – Similar provisions, RCW 9.46.110.
3.21.020 Administration and collection.
The administrative provisions contained in Chapter 3.29 KCC shall be fully applicable to the provisions of this chapter except as expressly stated to the contrary herein. The administration and collection of the tax imposed by this chapter shall be by the finance director, pursuant to the rules and regulations of the State Gambling Commission. The finance director shall adopt and publish such rules and regulations as may be reasonably necessary to enable the collection of the tax imposed herein.
(Ord. No. 1888, § 3; Ord. No. 3362, § 1, 9-16-97; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19. Formerly Code 1986, § 5.16.020)
3.21.030 Filing declaration of intent.
For the purpose of identifying who shall be subject to the tax imposed by this chapter, any person, association, or organization intending to conduct or operate any gambling activity authorized by RCW 9.46.010 et seq. shall, prior to commencement of any such activity, file with the finance director a sworn declaration of intent to conduct or operate such activity, together with a copy of the license issued in accordance with RCW 9.46.010 et seq. Thereafter, for any period covered by such state license or any renewal thereof, any person, association, or organization shall, on or before the fifteenth day of the month following the end of the quarterly period in which the tax accrued, file with the finance director a sworn statement on a form to be provided and prescribed by the city council for the purpose of ascertaining the tax due for the preceding quarterly period.
(Ord. No. 1888, § 4; Ord. No. 3362, § 1, 9-16-97; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19. Formerly Code 1986, § 5.16.030)
3.21.040 Tax due.
A. Quarterly tax reporting and payment. Except as provided in subsection (B) of this section for taxes due in excess of $50,000 annually, the tax imposed by this chapter shall be due and payable in quarterly installments.
B. Monthly tax reporting and payment. The tax imposed by this chapter shall be due and payable in monthly installments when the gambling taxes due in the previous calendar year were in excess of $50,000. In that event, the tax remittance, together with the return forms, shall be made on or before the final day of the month immediately after the month in which the tax accrued.
1. 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 after the last date the establishment is open for business, file a return and pay the tax due.
2. Whenever it appears to the finance director that the collection of taxes from any person, association, or organization may be in jeopardy, the finance director, 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 finance director deems appropriate under the circumstances.
(Ord. No. 3362, § 1, 9-16-97; Ord. No. 3949, § 2, 4-6-10; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19)
3.21.043 Failure to make timely payment of tax or fee.
Repealed by Ord. No. 4342.
(Ord. No. 1888, § 5; Ord. No. 2034, § 1; Ord. No. 2603, § 1; Ord. No. 3059, § 1, 8-4-92; Ord. No. 3362, § 1, 9-16-97; Ord. No. 3949, § 3, 4-6-10; Ord. No. 4257, § 1, 11-21-17. Formerly Code 1986, § 5.16.040)
3.21.050 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 finance director 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 auditor 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 auditor that he do so;
2. Bear the actual cost of inspection by the auditor 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 finance director the estimated costs thereof, including, but not limited to, round trip fare by the most rapid means, lodging, meals, and incidental expenses. The actual amounts 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 auditor 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 finance director by posting in the mails of the United States, addressed to the taxpayer to the last address on file with the finance department, 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. No. 1888, § 8; Ord. No. 3362, § 1, 9-16-97; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19. Formerly Code 1986, § 5.16.050)
3.21.055 Taxes, penalties, service charges, and fees constitute debt to municipality.
Any tax due and unpaid under this chapter and all penalties, service charges, or fees shall constitute a debt to the city. The city may, pursuant to Chapter 19.16 RCW, use a collection agency to collect outstanding debts, or it may seek collection by court proceedings, which remedies shall be in addition to all other existing remedies. Further, as provided for in RCW 9.46.110(4), as now enacted or hereafter amended, taxes and associated penalties and charges imposed under this chapter shall become a lien upon personal and real property used in the gambling activity in the same manner as provided for under RCW 84.60.010 for property taxes. The lien shall attach on the date the tax becomes due and shall relate back and have priority against real and personal property to the same extent as ad valorem taxes.
(Ord. No. 3362, § 1, 9-16-97; Ord. No. 3949, § 4, 4-6-10; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19)
3.21.060 Penalties.
Any person who shall fail or refuse to pay the tax as required in this chapter, or who shall willfully disobey any rule or regulation promulgated by the city council under this chapter, shall be guilty of a misdemeanor and upon conviction shall be punished by imprisonment for not more than 90 days or by a fine of not more than $250 or by both such fine and imprisonment. Any such fine shall be in addition to the tax required. Officers, directors, and managers of any organization conducting gambling activities shall be jointly and severally liable for the payment of the tax and for the payment of any fine imposed under this chapter.
(Ord. No. 1888, § 6; Ord. No. 3362, § 1, 9-16-97; Ord. No. 4257, § 1, 11-21-17; Ord. No. 4342, § 2, 11-19-19. Formerly Code 1986, § 5.16.060)