Chapter 5.04
BUSINESS LICENSES AND REGULATIONS
Sections:
5.04.025 Unlicensed businesses.
5.04.040 Finance director as license officer.
5.04.060 Procedure for issuance of license.
5.04.080 Term and renewal of license.
5.04.110 License transferability—Sale of business.
5.04.120 Canvassers, peddlers and solicitors.
5.04.140 Suspension or revocation of license.
5.04.010 Purpose and intent.
The provisions of this chapter are intended to be an exercise of the power of the city to license the businesses described herein for the purpose of revenue, in addition to the purpose of regulation. It is not the intent of this chapter to impose license fees solely for the purpose of supporting a regulatory program. It is also not the purpose or intent of this chapter to impose a property tax, income tax, or any other tax upon the act of owning property. The city bases the license fees established by this chapter upon the city’s power and authority to license all and every kind of business, commerce, occupation, trade and profession, and all other lawful activity, for both regulatory and revenue purposes. (Ord. 905 § 1, 1996: Ord. 863 § 2 (part), 1995)
5.04.015 Definitions.
For the purpose of this chapter and unless otherwise declared or clearly apparent from the context, the following definitions shall be applied:
A. Engaging in Business.
1. 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.
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 (A)(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, 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, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, 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 or 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 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 (A)(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 contract or subsequent contracts.
B. “Canvasser” means any person who goes from place to place or approaches individuals within the city seeking contributions or donations to private causes or tax exempt charities, or seeks opinions, preferences or other information for commercial purposes. “Canvassing” means to engage in such action.
C. “Finance director” means the finance director for the city or the director’s designee.
D. “Home occupation” means any business activity conducted within a residential dwelling and carried on by the inhabitants thereof, which use is clearly incidental and secondary to the use of the dwelling purposes and does not change the character thereof.
E. “Nonresident business” means any business which is not occupying a fixed place of operation within the city.
F. “Peddler” means any person who goes from place to place or approaches individuals within the city carrying or transporting goods, wares or merchandise and offering or exposing the same for sale, or making sales and deliveries to purchasers. “Peddle” means to engage in such actions.
G. “Person” means any individual, partnership, corporation or other entity or group of persons, however organized.
H. “Premises” is meant to include all lands, structures and places, and also any personal property which either is affixed to, or is used in connection with, any such business conducted on such premises.
I. “Solicitor” means any person who goes from place to place or approaches individuals within the city attempting to take orders for any goods, wares or merchandise, including books, periodicals, magazines or personal property of any nature whatsoever for future deliveries. “Soliciting” means to engage in such actions.
J. “Special event” means an event such as the Mukilteo Festival or any other community event which is sponsored by or for the benefit of any bona fide charitable or nonprofit organization, including but not limited to religious, civic, benevolent, fraternal, social or youth organizations.
K. “Employee” means any person who performs work, labor, or services for a business and is under that business’s control.
L. “Full-time employee” means any employee who works two thousand eighty hours per calendar year.
M. “Part-time employee” means any employee who works less than two thousand eighty hours per calendar year.
N. “Full-time equivalent (FTE)” means any full-time employee and/or any combination of part-time employees whose hours worked total the same number of hours worked by a full-time employee, i.e., two thousand eighty hours per calendar year.
O. “Residential dwelling unit (RDU)” has the same meaning as “dwelling unit” in the zoning title of this code; provided, that for purposes of this licensing chapter, extended family dwelling units and any other unit which is not rented or leased for profit shall not be considered a residential dwelling unit.
P. “Regulatory business license” means a license, other than a general business license, required for certain types of businesses that the city has determined warrant additional regulation, such as adult entertainment businesses, amusement device operators, peddlers and solicitors. (Ord. 1423 § 1, 2018: Ord. 1239 § 1 (part), 2010; Ord. 978 § 1, 1998; Ord. 905 §§ 2, 3, 1996; Ord. 863 § 2 (part), 1995)
5.04.020 License required.
It is unlawful for any person to engage in business within the city without first obtaining and maintaining a valid business license issued under the provisions of this chapter.
A. If a business actively operates from more than one location in the city, a separate license shall be required for each location; provided, however, that warehouses, distributing plants and/or storage yards used in connection with and incidental to a business licensed under the provisions of this title shall not be deemed to be a separate place of business. Location of such warehouses, distributing plants and/or storage yards shall be provided to the finance director, and must comply with the provisions of all city codes.
B. If more than one separate business is conducted on a single premises within the city, a separate license shall be required for each business.
C. Neither the filing of an application for a license or the renewal thereof, nor payment of any application or renewal fee, shall authorize a person to engage in or conduct a business until such license has been granted or renewed. (Ord. 1423 § 2, 2018: Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.025 Unlicensed businesses.
Any business operating without a valid business license is subject to a Class I civil infraction as specified in Section 1.32.020(A). (Ord. 1297 § 1, 2012)
5.04.030 Exemptions.
A. The following shall be required to submit a completed license application to the finance director to determine if they are exempt from the licensing requirements, but shall not be required to pay a license fee:
1. Business activities including canvassing activities engaged in by any bona fide charitable or nonprofit organization, including but not limited to religious, civic, benevolent, fraternal, social or youth organizations;
2. National banks, state banks, trust companies, mutual savings banks, and building and loan associations, with respect to their banking business, trust business, or saving and loan business;
3. Any farmer, gardener or other person who sells, delivers or peddles any fruit, vegetables, berries, butter, eggs, fish, milk, poultry or meats or any farm produce or edibles raised, caught, produced or manufactured by such person, except for marijuana producers and processors;
4. All honorably discharged veterans exempt from paying license fees as provided in RCW 73.04.050 and 73.04.060, as the same exist or may hereinafter be amended; or
5. Any business or activity which is exempt from payment of such license fees as prescribed by this title by virtue of applicable provisions of the federal or state constitution or statutes.
B. The following shall be exempt from the licensing provisions of this chapter:
1. Public utility companies or any instrumentality of the United States, state of Washington, or political subdivision thereof, with respect to the exercise of governmental functions;
2. “Special events” as defined in Section 5.04.015, including any temporary merchant or vendor operating only during and within the geographical boundaries of such special events;
3. Garage sales conducted on residential premises for the sale of used household personal items by the owner thereof, for no more than three consecutive days and no more than twice annually, and which are operated in compliance with city code regulations as the same now exist or may hereafter be amended;
4. Newspaper carriers under the age of eighteen years or any other business or activity owned and operated by a person under the age of eighteen years;
5. Any nonresident business where the only event occurring within the city is the mere delivery of goods or merchandise sold at business premises located outside of the city;
6. Any nonresident business where the only event occurring within the city is the mere rental of a postal box located at a United States Postal Service facility within the city. Provided, however, that any person claiming such an exemption shall provide the finance director with a copy of a valid and current business license issued by the jurisdiction in which the business has a fixed location to qualify for said exemption.
C. For purposes of the license required by this chapter, 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 five thousand dollars and who does not maintain a place of business within the city shall submit a business license registration to the finance director or designee. The threshold does not apply to regulatory license requirements or activities that require a specialized permit.
D. Any business with annual gross income of the business in the city that is equal to or less than five thousand dollars shall make available to the city upon request an affidavit confirming the income for the prior license year. A copy of the businesses’ Internal Revenue Service Schedule C, Profit or Loss from Business, or other applicable federal income tax forms shall be submitted as verification. If documentation is not available when business commences, the city will accept an affidavit and will require proper verification when available. (Ord. 1423 § 3, 2018: Ord. 1342 § 1, 2013; Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.040 Finance director as license officer.
The finance director shall collect all license fees and shall issue licenses in the name of the city to all persons qualified under the provisions of this chapter and shall:
A. Adopt all forms and prescribe the information to be provided;
B. Investigate and determine the eligibility of any applicant for a license as prescribed herein;
C. Notify any applicant of the acceptance or rejection of the application;
D. Ensure that each license is numbered, and shows the business name, location, the name of the licensee authorized to conduct or engage in business and the expiration date of the license. (Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.050 License application.
A. Any new nonexempt business shall make application for a business license prior to commencing business in the city. Application for license shall be accomplished by filing a master application through the Department of Revenue Business Licensing Service, in coordination with the city license officer. Persons applying for a license must pay a fee as established by the city council by periodic resolution and the Business Licensing Service’s handling fee.
B. The city license officer is authorized to prepare a schedule of fees for general business licenses issued, and when approved by the city council by resolution, such schedule shall govern the amount of the city license fee.
C. Application for a business license shall be made with the State of Washington Department of Revenue Business Licensing Service, on a form to be furnished for that purpose, and shall be accompanied by the proper fee. Each application submitted in person or by mail shall be signed by the person, or other authorized representative of the firm or corporation to be licensed. If an application is denied, the city business license fee shall be returned to the applicant.
D. No license shall be issued until the application has been fully completed and all applicable ordinances have been fully complied with. In addition, any business requiring a state or federal license shall obtain said licenses and provide proof of their issuance with the application prior to the issuance of a city business license.
E. City business licenses shall be granted annually and have an expiration date as determined by the State of Washington Department of Revenue Business Licensing Service in cooperation with the city, but shall have a term of at least one year. The license term or expiration date will be coordinated with the terms or expiration dates of all other licenses or permits required by the state for each license. (Ord. 1423 § 4, 2018)
5.04.060 Procedure for issuance of license.
A. After receiving a completed application for a business license, the finance director shall forward a copy of the application to appropriate departments which have the duty of enforcing city regulations and ordinances.
B. The departments shall review the completed application and obtain additional information from the applicant as needed, inspect the premises proposed to be operated when deemed necessary, may perform a criminal records check, perform fingerprinting and background checks for taxicab and day care operators, and shall make written verification to the finance director that such application and premises comply with the codes of the city. No license may be issued without such verification.
C. An application for a business license shall be denied if:
1. It contains a material omission of fact, misrepresentation or fraud;
2. The applicant has been convicted of a criminal offense and if the time elapsed since the criminal offense is less than ten years and the criminal offense for which the applicant was convicted directly relates to the specific business for which the license is sought. Applicants who have a current state license to operate a marijuana facility who have applied for a business license to operate a marijuana business are exempted from the requirements of this subsection (C)(2);
3. The premises on or in which the business will be operated violates building, zoning, fire or any other applicable laws of the city;
4. The business for which the license is sought will result in a danger to the public health, safety or welfare, or the violation of any state or local law, ordinance or regulation;
5. The applicant has had a similar license revoked by the city within a period of one year prior to the date of making application for a license hereunder; provided, that any applicant denied a license under the provisions of this chapter may reapply if and when the reasons for denial no longer exist; or
6. The applicant fails to pass the criminal records or background check and it is determined that it is not in the public interest to grant such a license.
D. After review and approval of the completed application by all of the appropriate departments, the finance director shall issue the applicable license or licenses authorized by this chapter.
E. The decision of the city regarding issuance or denial of an applicant’s initial business license shall be rendered within forty-five days of the date of filing of the completed application, unless an extension is requested by the applicant or the city for good cause.
F. When the city determines that there is cause for denial of any business license application, the finance director shall notify the applicant by certified mail, return receipt requested, of the city’s decision. Notice mailed to the address on file shall be deemed received three days after mailing. The notice shall specify the grounds for the denial. The applicant affected thereby shall have the right to appeal such action by filing a notice of appeal with the finance director as provided in Section 5.04.150. (Ord. 1423 § 5, 2018: Ord. 1342 § 2, 2013; Ord. 1297 § 3, 2012; Ord. 1239 § 1 (part), 2010; Ord. 1023 § 2, 2000; Ord. 863 § 2 (part), 1995)
5.04.070 License fees.
A. Except as otherwise provided pursuant to Section 5.04.030, every person engaging in business within the city and subject to this chapter shall pay a license fee for the privilege of engaging in such business. All businesses, regardless of type, including home occupations, shall pay an annual license fee as provided in the city’s most current fees and charges schedule.
B. The full-time equivalent portion of the license fees must be paid in a lump sum at the time of business license issuance or renewal.
C. Payment of the full-time equivalent portion of the license fee required by this section shall be accompanied by such documentation as may be reasonably required by the finance director in order to verify the accuracy of the information provided regarding the number of full-time equivalents used to calculate the fee. The documentation may include, without limitation, any and all reports provided by an employer to the Department of Labor and Industries regarding the number of employees and employee hours worked for businesses for which the fee is based upon full-time equivalents.
D. Payment made by draft or check shall not be deemed a payment of the fee unless and until the same has been honored in the usual course of business by the financial institution upon whom it is drawn, nor shall any acceptance of any such check or draft operate as an acquittance or discharge of the fee unless and until the check or draft is honored.
E. The finance director is authorized to promulgate, adopt and publicize any and all additional administrative regulations, forms and procedures which may be necessary in order to administer, enforce, and implement the provisions of this section with regard to collection of the license fee. (Ord. 1423 § 6, 2018: Ord. 1239 § 1 (part), 2010; Ord. 1236 § 1, 2009: Ord. 1012 § 1, 2000; Ord. 1004 § 1, 1999; Ord. 978 § 2, 1998; Ord. 905 § 6, 1996: Ord. 863 § 2 (part), 1995)
5.04.080 Term and renewal of license.
A. All businesses shall renew their business license each year. Businesses must pay a renewal fee as established by the city council by periodic resolution and the Business Licensing Service’s renewal fee.
B. If any license issued under this chapter is not renewed by the date of expiration of the existing license, then a new application must be submitted and accompanied by a fee of fifty percent of the amount of the combined licensing fees due, up to one hundred fifty dollars maximum. (Ord. 1423 § 8, 2018)
5.04.100 License posting.
Every license granted under this chapter shall be posted in a conspicuous location in the place of business of the licensee. (Ord. 1423 § 11, 2018: Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.110 License transferability—Sale of business.
A. All licenses issued pursuant to this chapter are nontransferable.
B. Upon the sale or transfer of any business which is licensed pursuant to this chapter, the license issued to the prior owner shall automatically expire on the date of such sale or transfer and the new owner shall apply for and obtain a new business license prior to engaging in, conducting or operating the business. (Ord. 863 § 2 (part), 1995)
5.04.120 Canvassers, peddlers and solicitors.
A. Any business with the intent to conduct canvassing, peddling or soliciting activities must provide a listing of all persons who will be canvassing, peddling or soliciting within the city. The listing must include first, middle and last name, date of birth, and a legible copy of government issued photo identification.
B. All canvassing, peddling or soliciting activities must be preapproved as stated in Section 5.04.060 by the city at least two business days prior to commencement of said activities.
C. Business licenses or a copy thereof shall be carried at all times by each licensee and/or all of the licensee’s employees, agents or representatives for whom issued when peddling, soliciting or canvassing within the city and shall be displayed along with photo identification upon request by any prospective customer or law enforcement officer.
D. No canvasser, peddler or solicitor shall engage in canvassing, peddling or solicitation activities between the hours of eight p.m. and nine a.m.
E. All canvassers, peddlers or solicitors must abide by all posted restrictions on private property for said activities.
F. Canvassing, peddling or soliciting approval may be suspended or revoked immediately for cause as noted in Section 5.04.140(A). Notice of suspension or revocation will be communicated by a city of Mukilteo police officer, in person or via phone call, to the registered supervisor. All canvassing, peddling or soliciting activity must then cease immediately. A certified letter of suspension or revocation will be mailed to the business address on file. Suspension or revocation may be appealed as stated in Section 5.04.150. (Ord. 1297 § 6, 2012: Ord. 863 § 2 (part), 1995)
5.04.140 Suspension or revocation of license.
A. The finance director may suspend or revoke any business license when the licensee, licensee’s officers, employees or agents, do any of the following:
1. Knowingly causes, aids, abets or conspires with another to cause any person to violate any of the laws of this state or the city which may affect the licensee’s business; or
2. Has obtained a license or permit by fraud, misrepresentation, concealment or through inadvertence or mistake; or
3. Has been convicted of a criminal offense and if the time elapsed since the criminal offense is less than ten years and the criminal offense for which the licensee was convicted directly relates to the specific business for which the license was sought, except for business licenses issued to operators of a marijuana facility who have a current state license to operate a marijuana facility; or
4. Conducts business operations in an unlawful manner or in such a manner as to constitute a breach of the peace, or menace to the health, safety or general welfare of the public; or
5. Fails to pay any license fee established by this chapter when the same is due.
B. Except as otherwise provided in this chapter, when the city determines that there is cause for suspending or revoking any license issued pursuant to this chapter, the finance director shall notify the person holding such license by certified mail, return receipt requested, of the city’s decision. Notice mailed to the address on file shall be deemed received three days after mailing. The notice shall specify the grounds for the suspension or revocation. The suspension or revocation shall become effective ten days from the date the notice is delivered or deemed received unless the person affected thereby files a written request with the director within such ten-day period for a hearing before the city council or to such other hearing body as may hereafter be established by the city council. (Ord. 1342 § 3, 2013; Ord. 1297 § 7, 2012: Ord. 1239 § 1 (part), 2010; Ord. 905 § 7, 1996; Ord. 863 § 2 (part), 1995)
5.04.150 Appeal and hearing.
A. Any person aggrieved by the action of the city in denying, refusing to renew, suspending or revoking any license under this chapter shall have the right to appeal such action to the city council or to such other hearing body as may hereafter be established by the city council for the hearing of such appeals, by filing a notice of appeal with the finance director within ten calendar days after receiving notice of the action from which the appeal is taken.
B. If the decision of the city is appealed, the action of the finance director shall be stayed unless continued operation of the business would cause imminent risk of harm to public health, safety or welfare.
C. Upon receipt of a notice of appeal, the finance director shall schedule a date for a public hearing of such appeal within thirty calendar days.
D. The city council shall hear testimony, take evidence, and may hear oral argument and receive written briefs.
E. The decision of the city council or other hearing body shall be final unless appealed, by the filing of an appropriate action to the Snohomish County superior court within ten calendar days of the date the decision is entered. Appellant shall pay the cost of reproduction of the record transcript.
F. In the event the applicant or licensee does not follow the procedures within the time periods set forth above, the license of the person shall be denied, suspended or revoked and that action shall be final. (Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.160 Mailing of notices.
Unless as herein otherwise provided, notices required by this chapter to be mailed to any person shall be sent by ordinary mail, addressed to the address of the applicant as shown by the records of the finance director, or if no such address is shown, to such address the finance director is able to ascertain by reasonable effort. Failure of the person to receive such mail notice shall not release the person from any fees or penalties thereon, nor shall such failure operate to extend any time limit set by the provisions of this chapter. (Ord. 1239 § 1 (part), 2010; Ord. 863 § 2 (part), 1995)
5.04.170 Violations.
A. Any person violating or failing to comply with any provision of this chapter shall be guilty of a misdemeanor and upon conviction thereof shall be punished as provided in Section 1.32.010 of the Mukilteo Municipal Code.
B. Nothing in this chapter limits the right of the city to pursue other lawful, criminal, civil or equitable remedies to abate, discontinue, correct or discourage unlawful acts under or in violation of this chapter. (Ord. 1250 § 1, 2010: Ord. 863 § 2 (part), 1995)