Chapter 5.04
BUSINESS LICENSE TAX – GENERALLY
Sections:
5.04.030 Required – Application – Issuance.
5.04.035 Application – Appeal to hearing examiner.
5.04.040 Application – Mailing forms – Effect.
5.04.050 Application or renewal – Failure to make – Effect.
5.04.060 Application – False statements or evading payment unlawful.
5.04.090 Businesses located outside city.
5.04.100 Rates – Payable when – Penalty for failure.
5.04.110 Unpaid tax constitutes debt – Remedy.
5.04.120 Overpayment and underpayment.
5.04.140 License not granted for nonpayment.
5.04.150 City clerk-treasurer’s report to council – Records.
5.04.170 Standards of conduct.
5.04.180 Revocation or suspension of license – Grounds.
5.04.010 Purpose.
The provisions of this chapter are an exercise of the power of the city to license for revenue and track business activity. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 1, 1954.]
5.04.020 Definitions.
In construing the provisions of this chapter, except when otherwise declared, or clearly apparent from the context, the following definitions shall be applied:
A. “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 taxpayer or to another person or class, directly or indirectly. Each business location is a separate business. Different activities, occupations, trades, professions or pursuits, although carried on at a single physical location, are deemed separate businesses, each requiring a separate business license. Such “different activities” shall be determined by the city and shall include, but not be limited to, businesses with differing names and/or signage, businesses in one location with differing owners, and businesses carried on at the same location under the direction of the same business owner which are differing in nature.
B. Engaging in Business.
1. The term “engaging in business” means commencing, conducting or continuing in any 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 a 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 or 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, consultants, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, or 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 director 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.
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” means any individual, firm, partnership, company, corporation, association, receiver, assignee, trustee in bankruptcy, trust, estate, joint venture, club, joint stock company, business trust, society, or any group of individuals acting as a unit.
D. “Taxpayer” and/or “licensee” includes any person who engages in business or who is required to have a business license, or who is liable for the collection of 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. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 733 § 1, 1983; Ord. 389 § 2, 1954.]
5.04.030 Required – Application – Issuance.
On and after the effective date of the ordinance codified in this chapter no person, whether a resident or nonresident, shall engage in any business or activity in the city for which a license or a tax is imposed by this chapter without first having obtained and being the holder of a valid and subsisting license to do so to be known as a general business license, issued under the provisions of this chapter, and without paying the license fee or tax imposed by this chapter. Such license shall expire on the date established for the business by the Washington Department of Licensing’s Master License Service (MLS), and must be renewed through the MLS on or before that expiration date in order for the business to continue operations within the city. The application for a license shall be made by submitting a master business application, along with any appropriate addenda forms, and all fees due, to the MLS, which application shall set forth at least the nature of the business, the name of the applicant, residence address, place of business, and the amount of the license fee or fees prescribed by this chapter. Every license granted under this chapter shall be posted in a conspicuous place in the place of business of the licensee. Any license issued under and by virtue of the provisions of this chapter shall be personal and nontransferable. In case business is transacted at two or more separate places in the city by one taxpayer, a separate city license for each place in which business is transacted shall be required. If two or more business owners operate separate businesses at the same location, each must obtain a license for the respective business. Each license shall be numbered, and show the name and place of the business of the licensee. No license shall be issued by the city for any business which is not a legal business pursuant to state law, or for any business which violates this code, including but not limited to LMC Title 18, Zoning. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 462 § 4, 1964; Ord. 389 § 5, 1954.]
5.04.035 Application – Appeal to hearing examiner.
A. The mayor or the mayor’s designee shall approve or deny all business license applications. Those applications involving a business holding a Washington State Liquor and Cannabis Board license and desiring to conduct music, dancing or entertainment on the licensed premises shall be reviewed by the city and the city shall either expressly grant or shall deny as part of the permit the authority of such licensee to conduct music, dancing or entertainment on the licensed premises as required by RCW 66.28.080.
B. In the event a particular application, in the judgment of the mayor or mayor’s designee, is of a nature requiring city council review and approval, the mayor or such designee shall refer that application to the city council for approval or denial. In the event the mayor or mayor’s designee, or the Leavenworth city council, denies a business license application, the applicant may appeal the denial to the Leavenworth hearing examiner by giving notice of appeal to the Leavenworth city clerk-treasurer within 10 days following the date of mailing of the notice of denial of the business license application to the applicant. The Leavenworth hearing examiner shall set a hearing to review the matter and the decision of the Leavenworth hearing examiner shall be final, subject only to an appeal filed with the Chelan County superior court within 14 days following the date of such decision. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1368 § 1, 2010; Ord. 1354 § 1 (Att. A), 2010; Ord. 1232 § 5, 2004; Ord. 960 § 1, 1994; Ord. 797 § 1, 1987; Ord. 702 § 1, 1981; Ord. 539, 1974; Ord. 462, 1964; Ord. 389, 1954.]
5.04.040 Application – Mailing forms – Effect.
A taxpayer may request to have forms for applications for licenses mailed, but failure of the taxpayer to receive any such forms shall not excuse the taxpayer from making application for and securing the license required and payment of the license fee or tax, when and as due hereunder. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 5, 1954.]
5.04.050 Application or renewal – Failure to make – Effect.
Failure to apply for and obtain a license prior to engaging in business within the city constitutes unlicensed activity. Failure to update or obtain a new business license if the nature of the business changes after a business license is granted, regardless if the name of the business changes, constitutes unlicensed activity. Upon discovery of such unlicensed activity, the city clerk-treasurer is authorized to contact the person so engaged in business and require the filing of an application for a business license under LMC 5.04.030. Failure to obtain the license is a violation of this chapter and may be punishable as provided under LMC 5.04.160.
In addition, the Master License Service late renewal penalty fee authorized by RCW 19.02.085 may be assessed on any licensee who fails, neglects, or refuses to renew the business license by the expiration date of the license. If the license renewal remains delinquent for at least 120 consecutive calendar days, the license may be cancelled as provided under LMC 5.04.180, and the person may be required to reapply for the city license per LMC 5.04.030 in order to continue operating within the city. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 8, 1954.]
5.04.060 Application – False statements or evading payment unlawful.
It is unlawful for any person liable to tax hereunder 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 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 in any manner to hinder or delay the city or any of its officers in carrying out the provisions of this chapter. Should the nature of a business be changed after a business license is issued by the city, and such business change is not licensed pursuant to LMC 5.04.050, continued operation of such business shall constitute making a false statement. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 10, 1954.]
5.04.070 Exempt businesses.
The following businesses shall be exempt from the licensing provisions of this chapter:
A. Activities carried on by nonprofit entities, including, without limitation, religious, charitable, benevolent, fraternal or social organizations;
B. Public utility companies;
C. Any instrumentality of the United States, state of Washington, city of Leavenworth, or political subdivision thereof with respect to the exercise of governmental functions;
D. Hospitals;
E. Any business which is owned and operated by a person under the age of 18 years, and which does not generate a net income of more than $2,000 per year. This provision is intended to exempt such activities engaged in by minors such as babysitting, newspaper delivery, lawn mowing and similar types of business activities;
F. Farmers or gardeners selling their own unprocessed farm products raised or grown exclusively upon lands owned or occupied by them, and when selling such products under the provisions of farmers markets;
G. Subcontractors working under a contractor who has obtained a business license;
H. Any person delivering in the city any property purchased or acquired in good faith from such person at his/her regular place of business outside the city where no intent by such person is shown to evade the provisions of this chapter;
I. Sales persons soliciting orders from manufacturers, wholesalers, distributors or retailers, where no other act of business is done in the city;
J. Businesses located outside the city unless work is performed or services are furnished requiring a city permit, in which case a business license shall be required in accordance with this chapter;
K. Threshold Exemption. To the extent set forth in this section, the following persons and businesses shall be exempt from the registration, license and/or license fee requirements as outlined in this chapter:
1. 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. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 960 § 2, 1994; Ord. 462 § 3, 1964; Ord. 389 § 4, 1954.]
5.04.080 Rate schedule.
There is levied upon and shall be collected from every person engaging in business in the city an annual license fee or tax for the privilege of engaging in business activities.
A. Such city business license fee shall be measured by the number of employees of each business employed within the city and shall be set by resolution of the city council from time to time and such rates shall be transmitted to the Master License Service when adjusted and will be on file at the office of the city clerk-treasurer.
B. The annual fee amount may be prorated to accommodate the expiration date established by the Master License Service.
C. Total fees due will include the Master License Service application or renewal handling fees authorized by RCW 19.02.075. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 1043 § 1, 1997; Ord. 874 § 1, 1991; Ord. 713 § 1, 1982; Ord. 539 § 1, 1974; Ord. 462 § 1, 1964; Ord. 389 § 3, 1954.]
5.04.090 Businesses located outside city.
As to businesses located outside the city for which a business license is required pursuant to LMC 5.04.070(J), a license fee or tax as provided in this chapter shall be measured by the number of employees in such business who perform any part of their duties within the city. Such businesses located outside the city and furnishing or performing services within the city shall provide to the city clerk-treasurer, as part of the application for a business license described in LMC 5.04.030, the permanent firm name, address and phone number of such business located outside the city. The city may require that information regarding the location of where business will be conducted within the city be provided prior to issuance of a license. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 960 § 3, 1994; Ord. 746 § 1, 1984; Ord. 462 § 2, 1964; Ord. 389 § 3(B), 1954.]
5.04.100 Rates – Payable when – Penalty for failure.
A. Each annual license fee provided herein shall become due and payable no later than the expiration date established for the business by the Master License Service.
B. The annual license fee amount may be prorated to accommodate the expiration date established by the Master License Service.
C. A temporary license valid for a period of one month to four months only may be obtained by applying directly to the city clerk-treasurer on a form provided by the city, and paying a license fee or tax at the rate of $25.00 per month. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 875 § 1, 1991; Ord. 462 § 5, 1964; Ord. 389 § 6, 1954.]
5.04.110 Unpaid tax constitutes debt – Remedy.
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. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 11, 1954.]
5.04.120 Overpayment and underpayment.
If the city clerk-treasurer upon investigation or upon checking returns finds that the fee or tax paid on any of them is more than the amount required of the taxpayer, he/she shall return the amount overpaid by a warrant drawn upon the general fund. If MLS is holding any funds to be refunded, MLS will refund those funds to the business. MLS processes all city general business license application fees for the city. The city processes additional application fees for taxpayers with 13 or more employees or as amended from time to time by resolution of the city council. If the city clerk-treasurer finds that the additional application fee or tax paid is less than required, he/she shall mail a statement to the taxpayer showing the balance due, who shall within 10 days pay the amount shown. MLS will pursue the taxpayer for any other relevant application and/or renewal underpayments, and submit complete fees to the city. MLS delinquency fees to the business may apply where appropriate, if the business does not comply with required renewal deadlines for payment. If the business does not comply with the required city fees after MLS has processed the delinquent account, MLS will then refer the business owner to the city for any action required by the city. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 7, 1954.]
5.04.130 Appeal procedure.
Any taxpayer aggrieved by the amount of the fee or tax found by the city clerk-treasurer to be required under the provisions of this chapter may appeal to the city council from such 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. Notice of time and hearing shall be mailed to the taxpayer. At such hearing the taxpayer shall be entitled to be heard and introduce evidence in his/her 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 by mail of the amount. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 9, 1954.]
5.04.140 License not granted for nonpayment.
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, he/she shall not be granted a license for the current period until such delinquent license fee, together with penalties, has been paid in full. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 5, 1954.]
5.04.150 City clerk-treasurer’s report to council – Records.
It shall be the duty of the city clerk-treasurer to submit to the city council a list of all delinquent business licenses upon request. It shall also be the duty of the city clerk-treasurer to maintain careful records, such records being subject to audit at any time. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 389 § 13, 1954.]
5.04.160 Violation – Penalty.
A. Any person violating or failing to comply with any of the provisions of this chapter or failing to pay the annual license fee imposed when due shall pay an MLS delinquency fee equal to 50 percent of the applicable business license fee, not to exceed $150.00, in addition to the required city renewal fees. If the business fails to comply with MLS’s one-time delinquency effort, the delinquent business will be referred to the city for violation penalties. Any person violating or failing to comply with any of the provisions of this chapter or failing to pay MLS which requires the city to send notification to collect fees shall pay a civil penalty to the city equal to 50 percent of the applicable business license fee in the event the annual fee is paid to the city within one month of notification from the city and 100 percent of the applicable business license fee after one month of being due.
B. The city through its authorized agents may initiate in Chelan County superior court an action to collect the license fee or for an injunction against any person who violates or fails to comply with any provision of this chapter and the city shall be entitled to enjoin, abate or terminate the carrying on of any business activity by any person who is in violation of or who has failed to comply with this chapter. In any such action brought by the city to collect the license fee or to enjoin a person violating this chapter, in the event the city is a prevailing party, then the party against whom the chapter is enforced in such action shall pay to the city costs and reasonable attorney fees at trial and in any appeal incurred by the city. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 748 § 1, 1984; Ord. 738 § 1, 1984; Ord. 389 § 12, 1954.]
5.04.170 Standards of conduct.
Every licensee under this chapter shall:
A. Permit reasonable inspections of the business premises by city of Leavenworth authorities for the purpose of enforcing the provisions of this chapter.
B. Comply with all federal, state and city statutes, laws, regulations and ordinances relating to the business premises and the conduct of the business thereon.
C. Refrain from unfair or deceptive acts or practices, or consumer fraud, in the conduct of the business, and avoid maintaining a public nuisance on the business premises.
D. Refrain from operating a business after expiration of a license or during the period that the license may be suspended or revoked. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 1236 § 1, 2004; Ord. 1232 § 1, 2004.]
5.04.180 Revocation or suspension of license – Grounds.
The mayor or the mayor’s designee may, at any time, suspend or revoke any license issued under the provisions of this chapter whenever the licensee, or any manager, officer, director, agent or employee of the licensee, has caused, permitted or knowingly done any of the following:
A. Violated any federal, state or city statute, law, regulation or ordinance upon the business premises, or in connection with the business operation, whether or not any party has been convicted in any court of competent jurisdiction of such violation;
B. Conducted, engaged in or operated the business in the city which does not conform to the ordinances of the city;
C. Engaged in unfair or deceptive acts or practices in conduct of the business, or operated the business in such a manner as to constitute a public nuisance;
D. Made any false statement or representation, or failed to disclose any material information to the city in connection with obtaining the business license or any renewal thereof; or
E. Failed to pay, within 120 days of the date due as provided in LMC 5.04.100, the annual license fee payable to the city by the licensee. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 1236 § 2, 2004; Ord. 1232 § 2, 2004.]
5.04.190 Hearing required.
Whenever the mayor or the mayor’s designee determines that there may be cause for suspending or revoking any license issued pursuant to this chapter, the mayor or designee shall notify the person holding said license by registered or certified mail, return receipt requested, of the determination. Notice mailed to the address on the license shall be deemed received three days after mailing. The notice shall specify the grounds for suspension or revocation. The notice shall also specify that a hearing shall be conducted by the Leavenworth hearing examiner at a time and date denominated in the notice to determine whether or not the license should be suspended or revoked. The notice shall be mailed to the licensee at least seven days prior to the date set for the hearing. The licensee may appear at the hearing and be heard in opposition to such suspension or revocation. The decision of the hearing examiner shall be final, subject only to an appeal with the Chelan County superior court pursuant to Chapter 21.11 LMC. [Ord. 1573 § 1 (Exh. A), 2018; Ord. 1385 § 1 (Exh. A), 2011; Ord. 1354 § 1 (Att. A), 2010; Ord. 1236 § 3, 2004; Ord. 1232 § 3, 2004.]