Chapter 5.08
LICENSE OR OCCUPATION TAX
Sections:
5.08.060 Sale or transfer of business.
5.08.115 Penalty for late payment—Interest.
5.08.010 Definitions.
In construing the provisions of this chapter, unless otherwise clearly apparent from the context, the following definitions shall be applied:
A. “Gross income” means the value proceeding or accruing from the sale of tangible property or service, and receipts (including all sums earned or charged, whether received or not) by reason of the investment of capital in the business engaged in, including rentals, royalties, fees or other emoluments, however designated, derived from business activities conducted within the corporate limits of the city (excluding receipts or proceeds from the use or sale of real property, or any interest therein and proceeds from the use or sale of notes, bonds, mortgages, or other evidence of indebtedness or stocks and the like) and without any deduction on account of the cost of the property sold, and the cost of materials used, labor costs, interest, or any expenses whatsoever; provided, that the term “gross income” shall not apply to those moneys collected by such business for reimbursement of the tax imposed by this chapter.
B. “Person” or “persons” means persons of either sex, firms, copartnerships, corporations, public utility districts, public and private utilities, and other associations, whether acting by themselves or by servants, agents or employees.
C. “Taxpayer” means any person liable to the license fee or tax imposed by this chapter.
D. “Tax year” or “taxable year” means the year commencing January 1st and ending on the last day of December of the year, or, in lieu thereof, the taxpayer’s fiscal year when permission is obtained from the city clerk to use the same as the tax period. (Ord. 880 § 1, 1996; Ord. 749 § 1 (part), 1993; Ord. 592 § 2, 1987; Ord. 153 § II, 1967)
5.08.020 Rate.
A. There is levied upon and shall be collected from and paid as hereinafter provided by every person, on account of and for the privilege of engaging in business activities, an occupation tax sometimes herein referred to as “tax” against the gross income of businesses as defined herein.
B. The tax provided in this chapter shall be computed on the basis of gross income derived and at the rates established below for each of the following occupations or business activities conducted within the corporate limits of the city. Those persons subject to the payment of the tax imposed herein are as follows:
1. Electricity. By authority of RCW 35.21.870, all persons engaged in or carrying on the business of selling or furnishing electric light and power shall be levied a tax equal to six percent of the gross income so derived.
2. Natural Gas. By authority of RCW 35.21.870, all persons engaged in or carrying on the business of selling or furnishing natural gas shall be levied a tax equal to six percent of the gross income so derived.
3. Telephone. By authority of RCW 35.21.870, there shall be levied upon any telephone business a tax equal to six percent of the total gross operating revenues, including revenues from intrastate toll, derived from operation of such businesses within the city. Gross operating revenues for this purpose shall not include charges which are passed on by regulatory order in order to compensate for the cost to the company of the tax imposed by this chapter.
a. “Telephone business” means the business of providing access to a local telephone network, local telephone network switching service, toll service, cellular telephone or coin telephone services, or providing telephonic video, data or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave or similar communication or transmission system. It includes cooperative or farmer line telephone companies or associations operating an exchange. Telephone business does not include the providing of competitive telephone service, nor the providing of cable television service.
b. “Competitive telephone service” means the providing by any person of telecommunications equipment or apparatus, or service related to that equipment or apparatus, such as repair or maintenance service, which is of a type which can be provided by persons that are not subject to regulation as telephone companies under RCW Title 80 and for which a separate charge is made.
4. Cable Television. In accordance with limits set forth by federal law, all persons engaged in or carrying on a business and employing or providing a community antenna system of coaxial cables or other electrical conductors and equipment used or to be used primarily to receive television or radio signals directly or indirectly off-the-air and transmit them to subscribers for a fee shall be levied a tax equal to six percent of the gross income so derived.
5. Garbage Collection. All private persons engaged in or carrying on the business of providing a garbage or refuse collection service shall be levied a tax equal to six percent of the gross income so derived.
6. Storm Drainage. There is levied a tax upon the gross income derived from the city’s storm drainage utility in the amount of six percent.
C. Any person who is engaged in, or carries on, any business subject to the tax under this chapter and who fails or refuses to pay the tax or any part thereof on or before the due date is operating in violation of this chapter. (Ord. 1243 § 1, 2010; Ord. 1005 § 1, 1999; Ord. 991, 1999; Ord. 975 § 1, 1998; Ord. 930 § 1, 1997; Ord. 901 § 1, 1996; Ord. 860 § 1, 1995; Ord. 851 § 1, 1995; Ord. 820 § 1, 1994; Ord. 783 §§ 1 — 4, 1993: Ord. 749 § 1 (part), 1993; Ord. 592 § 1, 1987; Ord. 448 § 1, 1983; Ord. 412 § 1, 1983; Ord. 383 § 1, 1981: Ord. 288 § 1, 1977: Ord. 153 § III, 1967)
5.08.030 Payments to start.
A. Businesses with monthly gross income of twenty thousand dollars or more per month that is taxable under this chapter shall pay said tax on their monthly gross income on a monthly basis, by the twenty-fifth day of the following month. All other businesses shall pay said tax on their quarterly gross income on a quarterly basis, by the twenty-fifth day of the month following each quarter. The quarterly periods are as follows:
First quarter — January, February, March;
Second quarter — April, May, June;
Third quarter — July, August, September;
Fourth quarter — October, November, December.
B. Whenever a taxpayer commences to engage in business during any monthly or quarterly period, as applicable, his first return and license fee or tax shall be based upon and cover the portion of the applicable monthly or quarterly period during which he engaged in business.
C. First payments and returns under this chapter for those persons not obligated to pay the tax under Ordinance No. 148 shall be for gross income derived during the first month or quarter, as applicable, of the taxable year as defined in Section 5.08.010 and the tax and returns shall be made as applicable on a monthly or quarterly basis thereafter, the payments to be due and payable as provided in subsection A of this section. Like payments and returns shall be made on a monthly or quarterly basis thereafter, the payments to be due and payable as provided in subsection A of this section. (Ord. 1243 § 2, 2010: Ord. 279, 1976: Ord. 153 § IV, 1967)
5.08.040 Exceptions.
There is excepted and deducted from the total gross income upon which the license fee or tax is computed so much thereof as is derived from transactions in interstate or foreign commerce, or from business done for the government of the United States, and any amount paid by the taxpayer to the United States or the state of Washington as excise taxes levied or imposed upon the sale or distribution of property or service. (Ord. 153 § V, 1967)
5.08.050 Payments—Records.
A. The tax payable hereunder shall, at the time of the return being required to be filed under this chapter, be paid to the city finance director by bank draft, certified check, cashier’s check, personal check or money order or in cash. If payment is made by draft or check, the tax or fee shall not be deemed paid until the check or draft is honored in the usual course of business; nor shall the acceptance of any sum by the finance director be an acquittance or discharge of the tax or fee due unless the amount of the payment is in the full and actual amount due.
B. It is the duty of every person liable for the payment of any tax imposed by this chapter to keep and preserve for the period of five years such books and records as will accurately reflect the amount of his gross income as defined in Section 5.08.010 and from which can be determined the amount of any tax for which he may be liable under the provisions of this chapter and all books as provided herein shall be open for examination at all reasonable times by the city clerk or his duly authorized agent. (Ord. 153 § VI, 1967)
5.08.060 Sale or transfer of business.
Upon the sale or transfer during a quarterly period of a business or account of which a tax is required, the purchaser or transferee shall, if the tax has not been paid in full for the quarterly period, be responsible for the payment of the tax for that portion of the quarterly period during which he carries on such business. (Ord. 153 § VII, 1967)
5.08.070 Privacy of records.
The returns made to the city clerk pursuant to this chapter shall not be made public, nor shall they be subject to the inspection of any person except the mayor, city attorney, city clerk, city finance director or his authorized agent and members of the city council; and it is unlawful for any person to make public or to inform any other person as to the contents or any information contained in or to permit inspection of any application or return except as in this section authorized. (Ord. 153 § VIII, 1967)
5.08.080 Refunds—Balance due.
If the city clerk upon investigation or upon checking returns finds that the tax paid on any of them is more than the amount required of the taxpayer, he shall refund the amount overpaid by a warrant upon the general fund. If the clerk finds that the 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. 153 § IX, 1967)
5.08.090 Failure to pay.
If any taxpayer fails, neglects or refuses to make his return as and when required in this chapter, the clerk is authorized to determine the amount of tax payable, and by mail to notify such taxpayer of the amount so determined. The amount so fixed shall thereupon become the tax and be immediately due and payable. (Ord. 153 § X, 1967)
5.08.100 Violations.
It is unlawful for any person liable to tax under this chapter to fail or refuse to make the returns as and when required, or to pay the tax when due, or for any person to make any false or fraudulent return or any false statement or return or any false statement or representation in, or in connection with, any such return, or to aid or abet another in any attempt to evade payment of the tax, or any part thereof, or for any person to fail to appear and/or testify in response to subpoena issued pursuant thereto, or to testify falsely upon any investigation of the correctness of a return, 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. 153 § XI, 1967)
5.08.110 Imposed.
The tax levied in this chapter is additional to any license or tax imposed or levied under any law or any other ordinance of the city. (Ord. 153 § XII, 1967)
5.08.115 Penalty for late payment—Interest.
A. For each payment due, if such payment is not made by the due date and time thereof, there shall be added penalties and interest as follows:
1. For each month or portion thereof that the payment is overdue, a penalty of twenty-five dollars or one percent of the tax due, whichever is greater shall be imposed.
2. In addition to the penalties imposed, interest on the amount due shall accrue at the rate of twelve percent per annum from the date of the delinquency.
B. The finance director is authorized to waive all or any portion of the penalties and interest provided herein in the event that the director determines that late payment was the result of excusable neglect or extreme hardship. (Ord. 1282 § 1, 2011)
5.08.120 Unpaid tax.
Taxes due and unpaid under this chapter, and all penalties and interests thereon, 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. 1282 § 2, 2011: Ord. 153 § XIII, 1967)
5.08.130 Penalty.
Failure to comply with any provision of this chapter shall constitute a misdemeanor and be subject to the provisions contained in Chapter 1.32. (Ord. 1282 § 3, 2011: Ord. 153 § XIV, 1967)
5.08.140 Appeal procedure.
A. Any taxpayer aggrieved by the amount of the tax found by the clerk to be required under the provisions of this chapter, may appeal to the city council from such finding by filing a written notice of appeal with the city clerk within five days from the time such taxpayer was given notice of such amount. The clerk shall, as soon as practicable, fix a time and place for the hearing of such appeal, which time shall be not more than ten days after the filing of the notice of appeal, and he 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 his own behalf. The city council shall thereupon ascertain the correct amount of the tax by resolution and the city clerk 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.
B. The mayor may, by subpoena, require the attendance thereat of any person, and may also require him 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 chairman in charge of the matter required of him pertinent to the appeal, and it is unlawful for him to fail or refuse to do so. (Ord. 153 § XVI, 1967)