Chapter 5.04 BUSINESS AND OCCUPATION LICENSES*

In construing the provisions of this chapter, except when otherwise declared or clearly apparent from the context, the following definitions shall be applied:

(1) “Business” includes all activities, occupations, trades, pursuits or professions located and/or engaged in within the city, with the object of gain, benefit or advantage to the person engaging in the same, or to any other person or class, directly or indirectly, and includes nonprofit enterprises.

(2) “Business license” means a license approved by the city for issuance under this chapter authorizing the person whose name appears thereon to engage in and transact the indicated business within the city for the stated time period.

(3) “Business Licensing Service” and “BLS” means the office within the Washington State Department of Revenue providing business licensing services to the city.

(4) “Employee” means any individual who performs work, labor, or services for a person engaging in business within the city, whether or not said employee is physically located inside the city at the time of performing the employer’s business, and is on the payroll including all full-time, part-time, and temporary employees. “Employee” also includes self-employed persons, sole proprietors, independent contractors, owners, managers, and partners.

(5) Engaging in Business.

(a) The term “engaging in business” means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.

(b) 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 (5)(a) 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.

(c) 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:

(i) 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.

(ii) Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city.

(iii) Soliciting sales.

(iv) Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.

(v) 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.

(vi) Installing, constructing, or supervising installation or construction of real or tangible personal property.

(vii) Soliciting, negotiating, or approving franchise, license, or other similar agreements.

(viii) Collecting current or delinquent accounts.

(ix) Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.

(x) 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.

(xi) 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, or veterinarians.

(xii) Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.

(xiii) 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.

(xiv) Investigating, resolving, or otherwise assisting in resolving customer complaints.

(xv) 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.

(xvi) Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.

(d) 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:

(i) Meeting with suppliers of goods and services as a customer.

(ii) Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.

(iii) 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 director member or attendee engaging in business such as a member of a board of directors who attends a board meeting.

(iv) Renting tangible or intangible property as a customer when the property is not used in the city.

(v) 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.

(vi) Conducting advertising through the mail.

(vii) Soliciting sales by phone from a location outside the city.

(e) 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 (5)(d) of this section.

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.

(6) “Person” means any individual, sole proprietorship, independent contractor, corporation, company, firm, partnership, joint venture, trust, business trust, joint-stock company, club, association, cooperative, nonprofit organization, society, receiver, assignee, trustee in bankruptcy, estate, any group of individuals acting as a unit, or any other organization or entity engaging in business.

(7) “Taxpayer” includes any person engaging in business and required to have a business license under this chapter, or who is liable for any license fee or tax under this chapter, or who performs any act for which a license fee or tax is imposed by this chapter. (Ord. 21-010 § 1; Ord. 18-013 § 2; Ord. 152 § 2, 1969).

5.04.020 Exercise of revenue license power.

The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue. (Ord. 21-010 § 1; Ord. 152 § 1, 1969).

5.04.030 Business license – Required.

No person, unless otherwise exempt under this chapter, shall engage in business within the city without first being issued a business license to engage in said business. (Ord. 21-010 § 1; Ord. 18-013 § 4; Ord. 152 § 6, 1969).

5.04.040 Business license – Expiration – Application.

A city business license expires on the date established by the Business Licensing Service (BLS), and must be renewed on or before that date to continue to engage in business in the city after that date. Application for a general business license is made through the BLS and must include all information required for each license requested, the total fees due for all licenses and the application handling fee required by RCW 19.02.075. (Ord. 21-010 § 1; Ord. 152 § 6, 1969).

5.04.045 Business license – Renewal.

The general business license issued under this chapter expires on the date established by the Business Licensing Service (BLS) and must be renewed on or before that date to continue to engage in business in the city after that date.

(1) Application to renew the business license is made through the BLS, and must include all information required to renew all licenses involved, the total fees due for all licenses, and the renewal application handling fee required by RCW 19.02.075.

(2) The license term and respective fee amount due may be prorated as needed to synchronize the license expiration date with the business license account maintained by the BLS.

(3) Failure to complete the license renewal by the expiration date will incur the late renewal penalty required by RCW 19.02.085 in addition to all other fees due.

(4) Failure to complete the license renewal within 120 days after expiration will result in the cancellation of the license and will require application for a new license as otherwise provided for in this chapter to continue to engage in business in the city. The city may require payment of all past due amounts and respective penalties prior to approving the new license. (Ord. 21-010 § 1).

5.04.050 Business license – Contents.

If a person engages in business at two or more separate places within the city, each such location must be separately licensed. Each license shall be numbered, and shall show the name and place of business of the licensee. (Ord. 21-010 § 1; Ord. 152 § 6, 1969).

5.04.060 Business license – Posting – Nontransferability.

Every license granted under this chapter shall be posted in a conspicuous place in the place of business of the licensee for which it was issued. Any license issued under and by virtue of the provisions of this chapter shall be nontransferable. In the event of a change of ownership of the business, the new owner must obtain a license as provided for in this chapter prior to engaging in business within the city under the acquired business. A person wishing to change the location of a business within the city must notify the Business Licensing Service sufficiently prior to the intended change to allow the city to review and approve the new location. Business may not commence at the new location prior to the city’s approval. (Ord. 21-010 § 1; Ord. 152 § 6, 1969).

5.04.070 Business license – Clerk-treasurer to mail application forms to taxpayers.

Repealed by Ord. 21-010. (Ord. 152 § 6, 1969).

5.04.080 Business license – Payment of fees required.

If any person required by the terms and provisions of this chapter to pay a license fee for any period fails or refuses to do so, said person shall not be granted a license for the current period until such delinquent license fee, together with penalties, has been paid in full. (Ord. 21-010 § 1; Ord. 18-013 § 5; Ord. 152 § 6, 1969).

5.04.090 License fee – Required – Determination of amount.

(1) On and after the effective date of the ordinance codified in this chapter, there is hereby levied upon and shall be collected from every person engaging in business in the city of Kittitas an annual license fee or tax for the privilege of engaging in business activities. Such license fee shall be measured by the number of employees of each business employed during the 12-month period immediately preceding the year for which the license fee is payable or, in the case of a new business application, as estimated for the following year, as follows:

(a) For every person employing one to two employees or owner-operated-only businesses, $35.00 per annum;

(b) For every person employing three to four employees, $60.00 per annum;

(d) For every person employing seven or more employees, $110.00 per annum.

(2) Employees working 1,600 hours or more, including paid legal holidays and paid vacation time, during the 12-month period immediately preceding the year for which the license fee is due and payable shall be considered full-time. Employees working less than 1,600 hours, including paid legal holidays and paid vacation time, shall be considered part-time employees. In determining the license fee to be paid hereunder by each business, the total number of employees shall be computed by adding together the number of full-time employees and the number of part-time, the latter figure to be computed by dividing the total hours worked by the part-time employee, including paid legal holidays and paid vacation time, by 1,600. Any fractions must be rounded up to the nearest whole number. (Ord. 21-010 § 1; Ord. 08-024 § 1; Ord. 462 § 1, 1992; Ord. 152 § 3, 1969).

5.04.100 License fee – Businesses located outside city.

Unless otherwise exempt under this chapter, the license fee or tax required for persons located outside the city that engage in business within the city shall be measured by the person’s number of employees engaging in business within the city for said person whether or not said employees are physically located within the city when performing the employer’s business. (Ord. 21-010 § 1; Ord. 18-013 § 6; Ord. 152 § 4, 1969).

5.04.110 Exemptions.

The provisions of this chapter shall not apply to:

(1) Telephone and television cable businesses for which a license is required by special ordinance;

(2) Any religious society, association or corporation, through the operation of any hospital, clinic, resort or other institution devoted exclusively to the care or healing of human beings; provided, that no exemption is granted where the income therefrom inures to the benefit of any physician, surgeon, stockholder, or individual by virtue of ownership or control of such hospital, clinic, resort or other institution;

(3) Itinerant sellers, venders, peddlers, solicitors, or merchants who are otherwise subject to a regulatory license per Chapter 5.28 KMC as now enacted or hereafter amended;

(4) Auctioneers licensed under another ordinance;

(5) Any instrumentality of the United States, the state, or political subdivision thereof;

(6) Any farmer, gardener or other person who sells, delivers or peddles any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats, or any farm produce or edibles raised, caught, produced or manufactured by such person within the state;

(7) Any theater, fair, circus, carnival or rodeo for which license is required by special ordinance;

(8) 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 be exempt from the general business license requirements in this chapter. The exemption does not apply to regulatory license requirements or activities that require a specialized permit. (Ord. 21-010 § 1; Ord. 18-013 § 7; Ord. 152 § 5, 1969).

5.04.120 License fee – Keeping of books and records.

It shall be the duty of every person liable for any license fee provided for by this chapter, to keep and preserve for a period of five years such suitable employment records as may be necessary to determine the amount of any license fee for which he may be liable under the provisions of this chapter; and such records shall be open for examination at any time by the city council, or its duly authorized agent. 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 the city council at the place where such books and records are kept. (Ord. 21-010 § 1; Ord. 152 § 7, 1969).

5.04.130 License fee – Due and payable when – Penalty for delinquency.

(1) The business license required by this chapter must be obtained prior to commencing business in the city. The appropriate license fee provided for in this chapter must accompany the application for license and is considered delinquent if not paid by the day on which business is commenced.

(2) Each annual license fee provided for in this chapter becomes due on the expiration date established by the Business Licensing Service.

(3) Failure to pay the city license fee within 30 days after the day on which it is due and payable shall render the taxpayer subject to penalty, in addition to any other penalty provided for in this chapter, of five percent of the amount of the license fee for the first month of delinquency, and an additional penalty of five percent for each succeeding month of delinquency, but not exceeding a total penalty of 25 percent of the amount of such license fee in any event. (Ord. 21-010 § 1; Ord. 152 § 8, 1969).

5.04.140 License fee – Procedure for overpayment or underpayment.

If the city clerk-treasurer, upon investigation or upon checking applications, finds that the fee or tax paid on any of them is more than the amount required of the taxpayer, he shall return the amount overpaid by a check issued by the city clerk-treasurer upon the current expense fund. If the clerk-treasurer finds that the fee or tax paid is less than required, he shall mail a statement to the taxpayer showing the balance due, who shall within three days pay the amount shown thereon. (Ord. 21-010 § 1; Ord. 152 § 9, 1969).

5.04.150 License fee – Failure to pay – Clerk to notify taxpayer of amount.

If any taxpayer fails, neglects or refuses to file his application and to pay any license fee or tax as and when required in this chapter, the clerk-treasurer is authorized to determine the amount of license fee or tax payable and by mail to notify such taxpayer of the amount so determined. The amount so fixed shall thereupon become the license fee or tax and be immediately due and payable. (Ord. 21-010 § 1; Ord. 152 § 10, 1969).

5.04.160 License fee – Additional to other fees or taxes.

The license fee and tax levied by this chapter shall be additional to any license fee or tax imposed or levied under the law of any other ordinance of the city except as otherwise expressly provided in this chapter. (Ord. 21-010 § 1; Ord. 152 § 14, 1969).

5.04.170 License fee – Appeals to city council.

(1) 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 city clerk-treasurer within five days from the time such taxpayer was given notice of such amount. The council shall, as soon as practicable, fix a time and place for the hearing of such appeal, which time shall be not more than 20 days after the filing of the notice of appeal, and 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 the taxpayer’s own behalf. The city council shall thereupon ascertain the correct amount of the fee or tax by resolution and the city 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.

(2) The mayor may by subpoena require the attendance thereat of any person and may also require said person to produce any pertinent books and records. Any person served with such subpoena shall appear at the time and place therein stated and produce the books and records required, if any, and shall testify truthfully under oath, administered by the mayor or appointed chair appointed in charge of the hearing on appeal, as to any matter required that is pertinent to the appeal, and it is unlawful for said person to fail or refuse so to do. (Ord. 21-010 § 1; Ord. 18-013 § 8; Ord. 152 § 11, 1969).

5.04.180 Mailing of notices.

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 limit set by the provisions of this chapter. (Ord. 21-010 § 1; Ord. 152 § 12, 1969).

5.04.190 Nonpayment of fees, false application, failure to respond to subpoena, etc., prohibited.

It is unlawful for any person liable to a license fee or tax under this chapter to fail or refuse to secure the license or to pay the fee or tax when due, or for any person to make any false or fraudulent application or any false statement or representation, in or in connection with any such application, or to aid or abet another in any attempt to evade payment of the fee or tax, or any part thereof, or for any person to fail to appear and/or testify in response to subpoena issued pursuant to this chapter, or to testify falsely upon any investigation of the correctness of any fee or tax, or upon the hearing of any fee or tax, or upon the hearing of any appeal, or in any manner to hinder or delay the city or any of its officers in carrying out the provisions of this chapter. (Ord. 21-010 § 1; Ord. 152 § 13, 1969).

5.04.200 Unpaid fees to constitute debt to city.

Any license fee or tax due and unpaid under this chapter, and all 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. 21-010 § 1; Ord. 152 § 15, 1969).

5.04.210 Time limit on collection of fee, penalty or corrections of tax.

The collection of any license fee and penalty imposed under this chapter and the corrections of any tax imposed under the municipal code may be made by the clerk-treasurer at any time within four years after the close of the year for which required. (Ord. 21-010 § 1; Ord. 152 § 18, 1969).

5.04.220 Violation – Penalty.

Violations of this chapter shall be punished by a civil fine not to exceed $500.00. (Ord. 21-010 § 1; Ord. 02-677 § 1; Ord. 279 Att. A § 2, 1978; Ord. 152 § 16, 1969).