Chapter 3.02
UTILITY—OCCUPATION TAX AND LICENSING
Sections:
3.02.030 Exceptions—Deductions.
3.02.050 Occupations subject to tax.
3.02.065 Cable television utility tax credit.
3.02.090 Sale or transfer of business.
3.02.100 Taxpayer to keep books and records—Return confidential.
3.02.130 Remedy of nonpayment of tax.
3.02.140 Licenses—Posting—Required.
3.02.160 Notification of annexation.
3.02.010 Authority.
The provisions of this chapter shall be deemed to be an exercise of the power of the city of Othello to license for revenue. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 2, 1991).
3.02.020 Definitions.
For the purposes of this chapter, unless otherwise required by the context:
(a) “City” means the city of Othello, Washington.
(b) “Competitive telephone service” means the providing by any persons of telephone equipment, apparatus, or service, other than toll 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.
(c) “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 city limits (excluding receipts or proceeds from the use or sale of real property or any interest therein and proceeds from the 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. Gross income of any public utility district subject to this tax shall be the total gross revenues from sales of electricity and power inside the city by the public utility district, exclusive of any revenues derived from the sale of electricity for the purpose of resale.
(d) “Person” or “persons” means individuals of either sex, firms, company partnerships, corporations, and other associations of natural persons, whether acting by themselves or by servants, agents or employees.
(e) “Taxpayers” means any person required to pay the license fee or tax imposed by this chapter.
(f) “Taxpayer year” means the year commencing January 1st and ending on the last day of December of the same year, or in lieu thereof, the taxpayer’s fiscal year when permission is obtained from the city finance officer to use the same as the tax period.
(g) “Telephone” means every primary station and shall exclude extensions.
(h) “Telephone business” means the business of providing access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, or providing telephonic, video, data, or similar communications or transmission for hire, via a local telephone network, toll line or channel, or similar communication or transmission system. “Telephone business” does not include the providing of competitive telephone service, nor the providing of cable television service. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 3, 1991).
3.02.030 Exceptions—Deductions.
(a) There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed so much thereof as is derived from transaction in interstate or foreign commerce, or from business done for the government of the United States, or officers or agents, and any amount paid by the taxpayer to the United States or the state as excise taxes levied or imposed upon the sale or distribution of property or service.
(b) There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed all bad debts for services incurred, rendered or charged for during the tax year. Debts shall be deemed bad and uncollectible when the same have been written off the books of the taxpayer. In the event debts are subsequently collected, said income shall be reported in the return for the quarter in which the debts are collected and at the rate prevailing in the tax year when collected.
(c) There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed all cash discounts allowed and actually granted to customers of the taxpayer during the tax year.
(d) Competitive telephone service as defined in this chapter is not included within the meaning of gross income. Gross operating income shall not include charges which are passed on to customers by the taxpayer pursuant to tariffs required by regulatory order to compensate for the costs to the company of tax imposed by this chapter.
(e) There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed so much thereof as derived from business which the city is prohibited from taxing under the Constitution or laws of the United States or the Constitution or the laws of the state of Washington and any amount paid by the taxpayer to the United States or the state of Washington as excise tax as levied or imposed upon the sale or distribution of property or services subject to this chapter. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 4, 1991).
3.02.040 License required.
After the first day of July, 1992, no person subject to the payment of the tax provided in this chapter shall engage in any business or activity in the city for which a tax is imposed by this chapter without first having obtained and being the holder of a valid and subsisting license so to do, to be known as an occupation license issued under the provisions of this chapter as hereinafter provided, and without paying the license fee or tax imposed by this chapter. The fee or tax for the occupation license shall be the license fee or tax imposed by this chapter. Such license shall expire at the end of the calendar year in which it is issued and a new license shall be required for each calendar year. Application for license shall be made to and issued by the clerk on forms provided by him, without charge in addition to that set forth in Section 3.02.060. Said license shall be personal and nontransferable. Each license shall be numbered, shall show the name, place and character or business of the taxpayer and such other information as the clerk deems necessary and shall be at all times conspicuously posted in the place of business for which it is issued. No person to whom a license has been issued pursuant to this chapter shall suffer or allow any other person for whom a separate license is required to operate under or display his license; nor shall such other person operate under or display such license. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 5, 1991).
3.02.050 Occupations subject to tax.
On and after the first day of July 1992, for the purpose of raising revenue, there is levied upon, and there 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 referred to in this chapter as “tax,” against the gross operating income of the following persons:
(a) Upon any competitive telephone service, telephone business and/or cellular telephone business;
(b) Upon any business selling or distributing electricity and electrical energy; provided, gross income from the sale or distribution of electricity or electrical energy shall not include that portion of sales to direct customers in any one month at a single point of delivery which exceeds seventy-six thousand dollars;
(c) Upon any business selling, manufacturing or distributing natural gas for residential, commercial and industrial consumption;
(d) Upon any business selling a cable, satellite or microwave signal by subscription for television, radio, or other audiovisual purposes;
(e) Upon every person engaged in or carrying on the business of selling or furnishing water service for residential, commercial, or industrial use;
(f) Upon every person engaged in or carrying on the business of selling or furnishing sewer service for residential, commercial, or industrial use;
(g) Upon every person engaged in or carrying on the business of selling or furnishing solid waste service for residential, commercial, or industrial use. (Ord. 1604 § 1, 2023; Ord. 1484 § 1, 2016: Ord. 1407 § 1 (part), 2014: Ord. 1335 § 1 (part), 2010: Ord. 1289 § 1, 2009: Ord. 978 § 1 (part), 1996; Ord. 872 § 6, 1991).
3.02.060 Tax amount.
The amount levied upon every person engaged in or carrying on any business subject to the tax under this chapter shall be calculated and taxed on each month’s gross income based upon the following formula:
December 1, 1999, and thereafter, the rate shall be six percent each month of gross income; provided, however:
(a) Upon every person engaged in or carrying on the business of selling or furnishing water service for residential, commercial, or industrial use a tax equal to ten percent of total annual gross operating revenue for selling or furnishing water service to each customer within the limits of the city.
(b) Upon every person engaged in or carrying on the business of selling or furnishing sewer service for residential, commercial, or industrial use a tax equal to fifteen percent of total annual gross operating revenue for selling or furnishing sewer service to each customer within the limits of the city.
(c) Upon every person engaged in or carrying on the business of selling or furnishing solid waste service for residential, commercial, or industrial use a tax equal to six percent of total annual gross operating revenue for selling or furnishing sewer service to each customer within the limits of the city. (Commencing January 1, 2024). (Ord. 1604 § 2, 2023; Ord. 1484 § 2, 2016: Ord. 1407 § 1 (part), 2014: Ord. 1335 § 1 (part), 2010: Ord. 1099 § 1 (part), 2001: Ord. 1040 § 1, 1999: Ord. 1030 § 1, 1999: Ord. 978 § 1 (part), 1996: Ord. 872 § 7, 1991).
3.02.065 Cable television utility tax credit.
Every person providing cable television service within this city will receive a credit toward the utility tax imposed pursuant to Section 3.02.050 in the amount of the cable television franchise fee paid to the city; provided, however, in no case shall the credit exceed the dollar amount of the utility tax due on the same revenue by the cable television service provider. (Ord. 1407 § 1 (part), 2014: Ord. 1357 § 1, 2012).
3.02.070 Tax—Due date.
The tax imposed by this chapter shall be due and payable in quarterly installments and remittance shall be made on or before the thirtieth day of the month next succeeding the end of the quarterly period for which the tax accrued. Such quarterly periods are as follows:
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1st Quarter |
January, February and March |
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2nd Quarter |
April, May and June |
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3rd Quarter |
July, August and September |
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4th Quarter |
October, November and December |
The first payment made hereunder shall be made by October 30, 1992, for the three-month period ending September 30, 1992. On or before each due date the taxpayer shall file with the finance officer of the city a written return, upon such form and setting forth such information as the finance officer shall reasonably require, together with the payment of the amount of tax due. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 8, 1991).
3.02.080 Use of funds.
Commencing January 1, 2018, and thereafter, the revenues collected by the city under this chapter shall be received into the city’s general fund for general operating and capital expenses of the city. (Ord. 1501 § 1, 2017: Ord. 1484 § 3, 2016: Ord. 1452 § 1, 2015: Ord. 1421 § 1, 2014: Ord. 1407 § 1 (part), 2014: Ord. 1386 § 1, 2013: Ord. 1173 § 1, 2003; Ord. 1099 § 1 (part), 2001: Ord. 1032 § 1, 1999: Ord. 872 § 9, 1991).
3.02.090 Sale or transfer of business.
Upon the sale or transfer during any tax year of a business on account of which a fee or tax is required, the purchaser or transferee shall, if the fee or tax has not been paid in full for the year, be responsible for its payment for that portion of the year during which he carried on such business. (Ord. 1407 § 1 (part), 2014: Ord. § 10, 1991).
3.02.100 Taxpayer to keep books and records—Return confidential.
It shall be the duty of each taxpayer taxed upon his gross income to keep and enter in a proper book or set of books or records an account which shall accurately reflect the amount of his gross income, which account shall always be open to the inspection of the finance officer or his duly authorized agent, and from which the officer or his agent may verify the return made by the taxpayer. The applications, statements or returns made to the city finance officer pursuant to this chapter shall not be made public nor shall they be subject to the inspection of any person except the finance officer, the city attorney, or their authorized agent, and members of the city council. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 11, 1991).
3.02.110 Cost of audit.
Upon the failure or refusal of the taxpayer to furnish the information called for by the finance officer or if the books and records of the taxpayer are complicated, or do not readily disclose the information required for making a complete or satisfactory return without the assistance of a skilled accountant, then the finance officer may in his discretion employ a skilled accountant, and such clerical assistance as is necessary, to make an audit of the books and records of the taxpayer and such expenses shall be collected from the taxpayer in the manner provided for the collection of the license or tax. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 12, 1991).
3.02.120 Overpayment of tax, penalty, or interest—Credit or refund—Interest rate—Statute of limitations.
(a) If, upon receipt of an application for a refund, or during an audit or examination of the taxpayer’s records and tax returns, the finance officer determines that the amount of tax, penalty, or interest paid is in excess of that properly due, the excess amount shall be credited to the taxpayer’s account or shall be refunded to the taxpayer. No refund or credit shall be made for taxes, penalties, or interest paid more than one year prior to the beginning of the calendar year in which the refund application is made or examination of records is completed.
(b) Refunds shall be made by means of vouchers approved by the finance officer and by the issuance of a city check or warrants drawn upon and payable from such funds as the city may provide.
(c) Any final judgment for which a recovery is granted by any court of competent jurisdiction for tax, penalties, interest, or costs paid by any person shall be paid in the same manner, as provided in subsection (b) of this section, upon the filing with the finance officer a certified copy of the order or judgment of the court.
(d) The finance officer shall compute interest on refunds or credits of amounts paid or other recovery allowed a taxpayer in accordance with RCW 82.32.060 as it now exists or as it may be amended.
(e) If subsection (d) of this section is held to be invalid, then the provisions of RCW 82.32.060 as existing at the effective date of the ordinance codified in this section shall apply. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 13, 1991).
3.02.130 Remedy of nonpayment of tax.
If any taxpayer fails to apply for a license or make his return, or to pay the fee or tax therefor or the cost of any audit required by the finance officer or any part thereof by the due date referred to in Section 3.02.070, the finance officer shall ascertain the amount of the fee or tax or installment thereof and/or cost of audit due, and shall add to such amount interest which shall be assessed at twelve percent per annum figured on a daily basis and a penalty of twenty percent of the total amount past due, and shall notify such taxpayer therefor, who shall be liable therefor in any suit or action by the city for collection thereof. The penalty which is assessed shall not be considered as interest. The finance officer shall also notify the city attorney in writing of the name of such delinquent taxpayer and the amount due from him and the city attorney shall with the assistance of the finance officer collect the same by any appropriate means or by any suit or action in the name of the city. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 14, 1991).
3.02.140 Licenses—Posting—Required.
All licenses issued pursuant to the provisions of this chapter shall be kept posted by the licensee in a conspicuous place in his principal place of business in the city. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 15, 1991).
3.02.150 False returns.
It is unlawful for any person liable to the tax under this chapter to fail or refuse to make application for return for license or to pay the fee or tax or installment thereof when due, or for any person to make any false or fraudulent application or return or any false statement or representation, in, or in connection with, any such application or return, 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 hereto, 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 or auditors in carrying out the provisions of this chapter. Any person who violates any provisions set forth in this chapter shall be guilty of a misdemeanor and shall be punished as set forth in the general penalty section of Chapter 1.10 now in effect or as hereafter amended. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 16, 1991).
3.02.160 Notification of annexation.
Whenever the boundaries of the city are extended by annexation, all persons subject to this chapter shall be provided copies of all annexation ordinances by the city. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 17, 1991).
3.02.170 Rules.
The finance officer is authorized to adopt, publish and enforce, from time to time, such rules and regulations for the proper administration of this chapter as shall be necessary, and it shall be violation of this chapter to violate or fail to comply with any such rule or regulation lawfully promulgated hereunder. (Ord. 1407 § 1 (part), 2014: Ord. 872 § 18, 1991).
3.02.180 Appeals.
(a) Any taxpayer aggrieved by the amount of the fee or tax determined by the finance officer to be due under the provisions of this chapter may appeal such determination to the city hearing examiner.
(b) The appeal shall be in writing and shall contain the following:
(1) The name and address of the taxpayer;
(2) A statement identifying the determination of the finance officer from which the appeal is taken;
(3) A statement setting forth the grounds upon which the appeal is taken, and identifying the specific errors the finance director is alleged to have made in making his or her determination;
(4) A statement identifying the requested relief from the determination being appealed.
(c) The appeal must be filed with the finance officer within ten days from the date the taxpayer was mailed notice of the finance officer’s decision.
(d) The hearing examiner shall conduct an appeal hearing, at which the appellant taxpayer and the finance officer shall have the opportunity to be heard and to introduce evidence relevant to the subject of the appeal. The hearing examiner shall establish rules for such hearings consistent with the provisions of this section, including rules relating to the issuance and reconsideration of decisions.
(e) The appellant taxpayer shall have the burden of proving by the preponderance of the evidence that the determination of the finance officer is erroneous.
(f) Appeal proceedings before the hearing examiner shall be tape recorded and all exhibits admitted by the examiner shall be made part of the record.
(g) Following the hearing, the hearing examiner shall render a decision on the appeal and shall enter written findings and conclusions in support thereof. A copy of the findings, conclusions, and decision shall be mailed to the appellant taxpayer and the finance officer. The decision shall state the correct amount of the tax owing as determined by the hearing examiner.
(h) The decision of the hearing examiner shall be final and conclusive unless the same is appealed to the city council. Any such appeal must be filed with the finance officer within ten working days of the decision appealed from or any final decision on reconsideration thereof. Any such appeal shall be based solely on the record of the appeal hearing conducted by the hearing examiner.
(i) Any and all actions seeking judicial review of a city council decision under this section must be filed in the Adams County superior court within ten calendar days following the date of the decision. Any action not brought within this time limit is barred. (Ord. 1407 § 1 (part), 2014).