Chapter 3.27
ANNEXATION SALES AND USE TAX
Sections:
3.27.010 Imposition of tax.
3.27.020 Definitions.
3.27.030 Credit against state tax.
3.27.040 Term of tax.
3.27.050 Use of tax revenue.
3.27.060 Limitation of revenues.
3.27.070 Thresholds.
3.27.010 Imposition of tax.
A. There is imposed a sales or use tax, as authorized by RCW 82.14.415, which tax shall be collected from those persons who are taxable by the state under Chapters 82.08 and 82.12 RCW, upon the occurrence of any taxable event within the city.
B. The rate of tax imposed under this chapter shall be 0.2 percent, and shall be in addition to other taxes authorized by law.
(Ord. No. 3947, § 2, 2-16-10)
3.27.020 Definitions.
The following words, terms, and phrases, when used in this chapter, shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning:
A. Annexation area means the Panther Lake Annexation Area, and all other areas annexed to Kent after the effective date of the ordinance codified in this chapter that meet the requirements of RCW 82.14.415. The Panther Lake Annexation Area includes all territory described in city of Kent Ordinance No. 3936, which annexed an unincorporated area of King County, Washington, of approximately three thousand three hundred forty-seven (3,347) acres contiguous to the corporate limits of the city of Kent, effective July 1, 2010.
B. Municipal services means those services customarily provided to the public by city government.
C. Fiscal year means the year beginning July 1st and ending the following June 30th.
D. Threshold amount means the maximum amount of tax distributions as determined by the city in accordance with KCC 3.27.070 that the Washington State Department of Revenue shall distribute to the city generated from the tax imposed under this chapter in a fiscal year.
(Ord. No. 3947, § 2, 2-16-10)
3.27.030 Credit against state tax.
The tax authorized under this section shall be a credit against the state tax under Chapter 82.08 or 82.12 RCW. The Washington State Department of Revenue shall perform the collection of these taxes on behalf of the city, at no cost to the city, and shall remit the tax to the city as provided in RCW 82.14.060 and 82.14.415.
(Ord. No. 3947, § 2, 2-16-10)
3.27.040 Term of tax.
A. The tax imposed by this chapter shall only be imposed at the beginning of the state of Washington’s fiscal year and shall continue for no more than ten (10) years from the date the tax is first imposed. Tax rate increases due to additional annexed areas shall be effective on July 1st of the fiscal year following the fiscal year in which the annexation occurred; provided, that notice is given to the Washington State Department of Revenue as set forth in KCC 3.27.070.
B. The tax shall also cease to be distributed to the city for the remainder of the fiscal year once the threshold amount, as set forth pursuant to KCC 3.27.070, has been reached. Distributions of tax under this chapter shall begin again on July 1st of the next fiscal year and continue until the new threshold amount has been reached or June 30th, whichever is sooner. Any revenue generated by the tax in excess of the threshold amount shall belong to the state of Washington.
(Ord. No. 3947, § 2, 2-16-10)
3.27.050 Use of tax revenue.
All revenue collected under this chapter shall be used solely to provide, maintain, and operate municipal services for the annexation area defined by the city for the sales and use tax credit.
(Ord. No. 3947, § 2, 2-16-10)
3.27.060 Limitation of revenues.
The revenues from the tax authorized in this chapter may not exceed the difference between the city’s estimated cost to provide, maintain, and operate municipal services for the annexation area and the general revenues that the city would typically expect to receive from the annexation area during a year. If the revenues from the tax authorized in this chapter and the revenues from the annexation area exceed the costs to provide, maintain, and operate municipal services for the annexation area during a given year, the city shall notify the state Department of Revenue and the tax distributions authorized in this section shall be suspended for the remainder of the year.
(Ord. No. 3947, § 2, 2-16-10)
3.27.070 Thresholds.
A. The threshold amount for the first fiscal year following the annexation and adoption of the tax authorized by this chapter is as follows: three million eight hundred and seventy-two thousand six hundred seventy-eight dollars ($3,872,678).
B. The city finance director shall forward to the Washington State Department of Revenue the threshold amount for the first fiscal year following the annexation and adoption of the tax.
C. No later than March 1st of each year, the finance director shall provide the Washington State Department of Revenue with a new threshold amount for the next fiscal year, and notice of any applicable tax rate changes.
(Ord. No. 3947, § 2, 2-16-10)