Chapter 5.84
WATER, SEWER, STORM BUSINESS AND OCCUPATION TAX
Sections:
5.84.005 Power to license for revenue.
5.84.010 Rate – Payment – Purpose.
5.84.015 Use and accountability of tax proceeds.
5.84.020 Occupation license required.
5.84.050 Exceptions and deductions.
5.84.060 Application or return for license.
5.84.070 Sale or transfer of business.
5.84.080 Income records – Returns.
5.84.090 Investigation of returns.
5.84.100 Over or underpayment of tax.
5.84.110 Failure to pay tax – Liability and penalties.
5.84.120 Appeals to city council.
5.84.130 Finance director to make rules.
5.84.140 Licenses posted – Nontransferable.
5.84.005 Power to license for revenue.
The provisions of this chapter shall be deemed to be an exercise of the power of the city to license for revenue. (Ord. 051-22 § 3)
5.84.008 Definitions.
In construing the provisions of this chapter, except when otherwise plainly declared or clearly apparent from the context, the following definitions shall apply:
(1) “Gross income” is the value preceding 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 (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 evidences of indebtedness, or stock and the like) and without any deduction on account of the cost of the property sold, the cost of materials used, labor costs, interest or discount paid, or any expense whatsoever, and without any deduction on account of losses, but allowing a deduction for the amount of credit losses sustained by the taxpayer during the period covered.
(2) “Taxpayer” is any person liable to the license fee or tax imposed by this chapter.
(3) “Tax period” or “taxable period” are the quarters ending on March 31st, June 30th, September 30th, and December 31st.
(4) “Person” or “persons” mean persons of either sex, firms, co-partnerships, corporations and other associations of natural persons, whether acting by themselves or by servants, agents or employees.
(5) “Sewerage system business” means and includes:
(a) Sanitary sewage disposal sewers and facilities, including without limitation on-site or off-site sanitary sewer facilities consisting of an approved septic tank or septic tank systems, or any other means of sewage treatment and disposal;
(b) Combined sanitary sewage disposal and storm or surface water drains and facilities;
(c) Storm or surface water drains, channels and facilities;
(d) Outfalls for storm drainage or sanitary sewage and works, plants, and facilities for storm drainage or sanitary sewage treatment and disposal;
(e) Any combination of or part of any or all of such facilities.
(6) “Water distribution business” means and includes every person engaged in the business of distributing, furnishing, or selling water services for commercial or domestic use or purpose. (Ord. 051-22 § 4)
5.84.010 Rate – Payment – Purpose.
There is levied upon, and there shall be collected from, every person, firm or corporation engaged in or carrying on the business of furnishing, for a monetary consideration, water distribution or sewerage system services, within or partly within the corporate limits of the city, an annual tax for the privilege of so doing, equal to five percent of the total gross revenue from such business in Port Orchard during the period for which the tax is due. (Ord. 051-22 § 5)
5.84.015 Use and accountability of tax proceeds.
All revenues collected under this chapter shall be deposited into the general fund and shall be used to fund municipal programs, services, or capital projects as the council shall direct through its annual budget process. (Ord. 051-22 § 6)
5.84.020 Occupation license required.
(1) No person shall engage in or carry on any business, occupation, pursuit or privilege for which a license fee or tax is imposed by this chapter without having first obtained, and being the holder of, a valid and subsisting license known as an occupation license.
(2) Any taxpayer who engages in or carries on any business subject to the tax imposed by this chapter without having a valid occupation license is guilty of a violation of this chapter for each day during which the business is engaged in or carried on, and any taxpayer who fails or refuses to pay the license fee or tax on any part thereof on or before the due date shall be deemed to be operating without a license. (Ord. 051-22 § 7)
5.84.030 License period.
All occupation licenses shall be for the calendar year for which issued and shall expire at the end of that year. (Ord. 051-22 § 8)
5.84.040 Payment of tax.
Effective January 1, 2023, the tax due under this chapter shall be paid quarterly during the year, to be based upon gross income received during each quarter ending March 31st, June 30th, September 30th and December 31st. The tax shall be an amount equal to the percentage of the gross income from the business of the taxpayer in the city during the previous quarter as set forth in POMC 5.84.010, and shall be due within 45 days after the end of the quarter. (Ord. 051-22 § 9)
5.84.050 Exceptions and deductions.
(1) In computing the annual tax there shall be deducted from the gross operating revenues the following items:
(a) The amount of credit losses and uncollectibles actually sustained by the taxpayer whose regular books are kept on an accrual basis; provided, that to be eligible for said deduction the taxpayer must provide proof of such credit losses and uncollectibles;
(b) Amounts derived from transactions in interstate or foreign commerce or from any business which the city is prohibited from taxing under the Constitution of the United States or the Constitution of the state of Washington.
(c) Charges by a taxpayer engaging in any water or sewer occupation activity subject to this chapter for sales of water or sewer services to any purchaser engaged in the same utility occupation activity that the purchaser buys for the purpose of resale.
(2) Any person subject to the payment of a license fee or tax under the provisions of any ordinance of the city, other than this chapter, on account of engaging in any activity for which such person is liable to tax under this chapter may deduct the amount of such fee or tax imposed by this chapter on account of such activity, but such person shall nevertheless, in the manner herein provided for, apply for and procure an occupation license.
(3) Nothing in this chapter shall be construed as requiring a license, or the payment of a license fee or tax, or the doing of any act which would constitute an unlawful burden or interference in violation of the Constitution or laws of the United States or which would not be consistent with the Constitution or laws of the state of Washington. (Ord. 051-22 § 10)
5.84.060 Application or return for license.
(1) On or before the first day of each year, every taxpayer shall apply to the city finance director for an occupation license upon blanks or forms of returns to be prepared and provided by them, requesting such information as may be necessary to enable them to arrive at the lawful amount of the fee or tax. The taxpayer shall write in a legible manner in such blank or form of return the information required and shall sign the same, and by affidavit at the foot thereof shall swear or affirm that the information given is full and true and that they know the same to be so.
(2) Every such application or return shall be filed not later than 45 days after the last day of each year.
(3) If the applicant is a partnership, the application or return must be made by one of the partners; if a corporation, by one of the officers thereof; if a foreign corporation, co-partnership or nonresident individual by the resident agent or local manager of said corporation, co-partnership or individual. (Ord. 017-23 § 1 (Exh. A); Ord. 051-22 § 11)
5.84.070 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 hereby 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 such purchaser or transferee carried on such business. (Ord. 051-22 § 12)
5.84.080 Income records – Returns.
(1) It shall be the duty of each taxpayer taxed upon the taxpayer’s gross income to keep and enter in a proper book or set of books or records an account accurately reflecting the amount of the taxpayer’s gross income, which account shall always be open to the inspection of the city finance director or duly authorized agent, and from which the officer or agent may verify the return made by the taxpayer.
(2) To the extent permitted by Chapter 42.56 RCW and other applicable statutes, the applications, statements or returns made to the finance director according to this chapter shall not be made public, nor shall they be subject to the inspection of any person except the mayor, the city attorney, the finance director, and anyone working on the finance director’s behalf. (Ord. 051-22 § 13)
5.84.090 Investigation of returns.
If any taxpayer fails to apply for license or make the return, or if the city finance director is dissatisfied with the correctness of the statements made in the application or return of any taxpayer, the finance director or authorized agent may enter the premises of such taxpayer at any reasonable time for the purpose of inspecting the taxpayer’s books or records of account in order to ascertain the amount of the fee or tax or to determine the correctness of such statements, as the case may be. The finance director or authorized agent may examine any person under oath, addressing the matters inquired into, or may fix a time for an investigation of the correctness of the return and may issue a subpoena to the taxpayer or any other person, to attend upon such investigation and there testify under oath administered by the finance director or agent, in regard to the matters inquired into and may, by subpoena, require the taxpayer or any person to bring such books, records and papers as may be necessary. (Ord. 051-22 § 14)
5.84.100 Over or underpayment of tax.
(1) Overpayment. If the city finance director 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, the finance director shall refund the amount overpaid upon the written request of the taxpayer. Any refund request not submitted within three years of an alleged overpayment shall be forever barred.
(2) Underpayment. If the city finance director finds that the fee or tax paid is less than required, the finance director shall send a statement to the taxpayer showing the balance due, together with a penalty of 10 percent of the amount due, and the taxpayer shall, within 30 days, pay the amount shown thereon. If payment is not received by the finance director by the due date specified in the notice, the finance director shall add a penalty of an additional 25 percent of the amount of the additional tax found due. If the balance due, including all penalties, is not paid in full within 30 calendar days from the date specified, the penalty shall be increased by 15 percent of the amount due and the total amount due shall accrue interest at the rate of 12 percent per annum. If the finance director finds that all, or any part of, the deficiency resulted from an intent to evade the tax payable hereunder, a penalty of 50 percent of the additional tax found to be due shall be added and the amounts due, including penalties, shall accrue interest at the rate of 12 percent per annum from the date the tax became due and the date payment is actually made. (Ord. 051-22 § 15)
5.84.110 Failure to pay tax – Liability and penalties.
(1) If any taxpayer fails to apply for license, or to make the return or to pay the fee or tax or any part thereof within 30 days after the tax is due, the city finance director shall ascertain the amount of the fee or tax or installment due and shall notify the taxpayer who shall be liable therefor in any suit or action by the city for the collection of the tax. The city finance director shall also notify the city attorney in writing of the name of the delinquent taxpayer and the amount due from such taxpayer and the city attorney shall, with the assistance of the city finance director, collect the same by any appropriate means or by suit or action in the name of the city.
(2) If a person subject to this tax fails to pay any tax required by this chapter within 15 calendar days after the due date thereof a penalty of 10 percent of the amount of such tax shall be added to the tax, and any tax due under this chapter that is unpaid and all penalties thereon shall constitute a debt to the city and may be collected by a collection agency or court proceedings, which remedy shall be in addition to all other remedies. If the city prevails on any claim that a taxpayer is in noncompliance with the terms of this chapter, Port Orchard shall be entitled to an award of its attorneys’ fees, court costs and fees, and other professional expenses associated with prosecuting the action. (Ord. 051-22 § 16)
5.84.120 Appeals to city council.
(1) Any taxpayer aggrieved by the amount of the fee or tax found by the city finance director 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 30 days from the time the taxpayer was given notice of the amount. If the determination being appealed is the amount of the tax or fee due, the amount determined by the finance director must be paid to Port Orchard under protest before filing an appeal. The clerk shall, as soon as practicable, fix a time and place for the hearing of the appeal, which time shall be not more than 30 days after the filing of the notice of appeal, and shall cause a notice of the time and place thereof to be delivered or mailed to the appellant. At such hearing the taxpayer shall be entitled to be heard and to introduce evidence in their own behalf. The city council shall thereupon ascertain the correct amount of the fee or tax by resolution and the city clerk shall immediately notify the appellant. The amount of the tax, together with costs of the appeal if appellant is unsuccessful therein, must be paid within 30 days after such notice is given.
(2) The mayor may, by subpoena, require the attendance of any person at the hearing of the appeal and may also require the production of any pertinent books and records. Any person served with such subpoena shall appear at the time and place stated therein and produce the books and records required, if any, and shall testify truthfully under oath administered by the mayor as to any matter required of such person pertinent to the appeal, and it shall be unlawful for such person to fail or refuse to do so. (Ord. 017-23 § 1 (Exh. A); Ord. 051-22 § 17)
5.84.130 Finance director to make rules.
The city finance director shall have the power and the duty, from time to time, to adopt, publish and enforce rules and regulations not inconsistent with this chapter or with law for the purpose of carrying out the provisions thereof. It shall be unlawful to violate or fail to comply with any such rule or regulation. (Ord. 051-22 § 18)
5.84.140 Licenses posted – Nontransferable.
(1) All licenses issued pursuant to the provisions of this chapter shall be kept posted by the licensee in a conspicuous place in the licensee’s principal place of business.
(2) No persons to whom a license has been issued pursuant to this chapter shall allow any other person chargeable with a separate license to operate under or display their license, nor shall such other person operate under or display such license. (Ord. 017-23 § 1 (Exh. A); Ord. 051-22 § 19)
5.84.150 False returns, etc.
It shall be unlawful for any person liable for taxes hereunder to fail or refuse to make application or return for a license or to pay the fee or tax or installment when due, or for any person to make any false or fraudulent application or return or any false statement of representation in, or in connection with, any such application or return. It shall be unlawful for any person 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 in carrying out the provisions of this chapter. (Ord. 051-22 § 20)