Chapter 5.05
BUSINESS LICENSES
Sections:
5.05.010 Purpose.
5.05.020 Definitions.
5.05.030 License required – Exceptions.
5.05.040 License fee.
5.05.050 License – Application and issuance.
5.05.060 Successor liability.
5.05.070 License – Suspension, denial or revocation.
5.05.080 Duties of the director.
5.05.090 Enforcement.
5.05.100 City manager authorized to enter into master license service agreement.
5.05.010 Purpose.
In order for the City to responsibly carry out the duties and authorities delegated to it by the Washington State Constitution and the laws of the state of Washington as a noncharter code city, maintenance of current information with respect to business, trade, service, commercial and professional activities carried on within the City is necessary and essential to the public health, safety and welfare. Such information can best be accumulated and maintained on a current basis through the establishment of a program for the licensing and registration of such activities. (Ord. O2002-118 § 1)
5.05.020 Definitions.
(1) Unless defined otherwise herein, this chapter incorporates by reference all definitions set forth in Chapter 82.04 RCW, or as hereafter amended.
(2) “Business” means all activities engaged in with the object of gain, benefit, or advantage to any person, directly or indirectly.
(3) “Director” means the City’s finance director or the director’s designee.
(4) Engaging in Business.
(a) 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.
(b) 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 (4)(a) 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.
(c) 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:
(i) 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.
(ii) Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the City.
(iii) Soliciting sales.
(iv) Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.
(v) 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.
(vi) Installing, constructing, or supervising installation or construction of real or tangible personal property.
(vii) Soliciting, negotiating, or approving franchise, license, or other similar agreements.
(viii) Collecting current or delinquent accounts.
(ix) Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.
(x) 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.
(xi) 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.
(xii) Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.
(xiii) 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.
(xiv) Investigating, resolving, or otherwise assisting in resolving customer complaints.
(xv) 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.
(xvi) Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.
(d) 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:
(i) Meeting with suppliers of goods and services as a customer.
(ii) Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.
(iii) 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 directors member or attendee engaging in business such as a member of a board of directors who attends a board meeting.
(iv) Renting tangible or intangible property as a customer when the property is not used in the City.
(v) 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.
(vi) Conducting advertising through the mail.
(vii) Soliciting sales by phone from a location outside the City.
(e) 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 (4)(d) 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. (Ord. O2018-469 § 1; Ord. 2012-322 § 2; Ord. O2002-118 § 2)
5.05.030 License required – Exceptions.
(1) Except as provided in subsection (4) of this section, every person who engages in business within the City, and who is required to register with the state of Washington as outlined in WAC 458-20-101, shall apply for and obtain from the director a license for each calendar year or portion thereof; provided, organizations meeting the requirements of SMC 5.05.040(3)(a) are not required to obtain a business license, but instead shall register with the City clerk.
(2) Every business shall post the license issued to the business pursuant to this chapter on the premises of the business. Every transient merchant or peddler shall have in his or her possession at all times, while conducting business as such, the license issued pursuant to this chapter or a copy of the completed license application with proof of payment.
(3) Repealed by Ord. O2012-322.
(4) The following shall be exempt from the licensing provisions of this chapter:
(a) The performance of governmental or proprietary functions by any instrumentality of the United States, the state of Washington, or any political subdivision thereof;
(b) Sales by farmers or gardeners of their own farm products raised and grown exclusively upon lands owned or occupied by them;
(c) Casual and isolated sales, including garage sales conducted on residential premises in compliance with this code; provided, that not more than four such sales are made during the calendar year;
(d) The delivery of goods by vehicle to a customer or client by a business where the sale occurred on a business premises outside of the City and the only event occurring within the City is a delivery;
(e) Taxi, limousine, airporter, or similar services where the business operates from premises located outside the City;
(f) Sales of goods or services by mail, telephone, Internet or similar means where the seller operates from premises located outside the City and the only event occurring within the City is receipt of such goods and services;
(g) Provision of Internet or wireless phone services where the provider operates from premises located outside the City and the only event occurring within the City is receipt of such services.
(5) Any person or business whose annual value of products, gross proceeds of sales, or gross 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. O2018-469 § 2; Ord. 2012-322 § 2; Ord. O2005-177 § 2; Ord. O2003-126 § 2; Ord. O2002-118 § 3)
5.05.040 License fee.
(1) A business license fee shall be paid to the City in an amount set by resolution of the City council.
(2) The license fee shall be in addition to any license fee or tax imposed or levied under any law or other ordinance of the City, except as otherwise expressly provided.
(3) The following shall be exempt from payment of fee:
(a) Nonprofit and not-for-profit activities and fundraising sales carried on by religious, charitable, educational, benevolent, fraternal or social organizations which have been determined by the Internal Revenue Service (IRS) of the United States to be exempt from the payment of income tax and whose charitable contributions would be deemed tax deductible; provided, that the organization shall file a true and correct copy of a current IRS 501(c) or 501(d) exemption certificate. (Ord. O2005-177 § 3; Ord. O2003-126 § 3; Ord. O2002-118 § 4)
5.05.050 License – Application and issuance.
(1) A business license must be obtained and the license fee paid before a business commences operation within the City. If business is transacted by one person at two or more separate locations within the City, a separate license shall be obtained and displayed in each location.
(2) A business license shall expire on the date established by the master license service, and a licensee otherwise in compliance with the terms of this chapter may renew the licensee’s business license by payment of the annual licensing fee within the time period established by the master license service.
(3) Applications for business licenses shall be made to the director on forms provided by the City, which shall state the residence of the applicants, the nature of the proposed business, the proposed location of the business, and such other information as the director may reasonably request. If the director finds that the application is complete and correct, that all required fees have been paid, and all laws and requirements have been complied with, a business license shall be issued. Business license applications submitted to the City, and business licenses, are public records open to inspection, except as otherwise provided by law.
(4) The director shall, when appropriate, refer applications to the department of community development, the police department, the fire department, or other governmental agencies for their review.
(5) If more than one business is conducted or operated on a single premises, a separate license shall be required for each business. If a business is conducted or operated on more than one premises in the City, a separate license shall be required for each premises in the City.
(6) The filing of an application for a license, or the renewal thereof, or the payment of any application or renewal fee, shall not authorize a person to engage in or conduct a business until such license has been granted or renewed.
(7) A business license shall be personal and nontransferable. Where a licensee’s place of business is changed, the licensee shall return the license to the director and a new license shall be issued for the new place of business without charge. No licensee shall allow another person to operate a business under, or display, the license, nor shall another person operate under or display the license.
(8) The City’s decision to issue or the issuance of a business license shall not be construed as permission or acquiescence in a prohibited activity or other violation; and the City shall not be held liable for the actions of any licensed business by virtue of having issued a license to conduct business.
(9) Every licensee shall permit reasonable inspections of the business premises by governmental authorities for the purpose of enforcing the provisions of this chapter. (Ord. O2003-126 § 4; Ord. O2002-118 § 5)
5.05.060 Successor liability.
(1) Whenever any person required to be licensed by this chapter quits business, or sells, exchanges or otherwise disposes of his/her business or stock of goods, any license fee, tax or penalty payable to the City shall immediately become due and payable, and such person shall, within 30 days, file the required forms and pay the amounts due. Any person who becomes a successor to such person shall become liable for the full amount of the license fee, tax or penalties due and owing, unless such person gives written notice to the director of such acquisition no less than 30 days before the date of closing.
(2) Each person’s account will remain on an active status and be subject to all license fees and penalties until such time as the director is notified in writing that the person has discontinued business activity within the City. (Ord. O2002-118 § 6)
5.05.070 License – Suspension, denial or revocation.
(1) A business license may be denied, suspended or revoked by the director whenever the licensee or any of its officers, directors, agents, owners or employees fails or have failed:
(a) To maintain the licensed premises or business activity in compliance with applicable health, building, fire, safety laws, ordinances, or regulations; or
(b) To comply with the requirements of this chapter. Any suspension shall remain in effect until the conditions causing the suspension are cured and reasonable measures are taken to ensure that those conditions will not recur.
(2) The director shall, by certified mail, give written notice to the applicant of denial of a license or to the licensee of suspension or revocation of a license, including a summary of the complaints, objections and information considered by the director and the reason(s) for the action. Notice mailed to the mailing address on the application or most recent renewal shall be deemed received three days after mailing. The director’s decision may be appealed to the City hearing examiner upon payment of the appropriate appeal fee.
(3) A business license revoked for failure to pay the annual license fee or business and occupation tax shall be reinstated if payment of the amount due, together with any penalties due thereon, is made within 15 days of the date of the notice. (Ord. O2002-118 § 7)
5.05.080 Duties of the director.
(1) The director shall keep full and accurate records of all funds received under the provisions of this chapter. Upon receipt of such amount, the director shall deposit the amounts collected into the current expense fund of the City.
(2) The director may adopt, publish and enforce rules and regulations for the purpose of carrying out the provisions of this chapter, and it is unlawful to violate or fail to comply with any such rule or regulation. (Ord. O2002-118 § 8)
5.05.090 Enforcement.
(1) Collection. The license fee and all penalties imposed under this chapter shall constitute a debt to the City and may be collected by court proceedings, which remedy shall be in addition to all other existing remedies. Any judgment entered in favor of the City shall include an award to the City of all court and collection costs, including attorney’s fees. Amounts delinquent more than 90 days may be assigned for collection, in which case the amount of any collection charges shall be in addition to all other amounts owed.
(2) Penalties.
(a) It shall be a misdemeanor for any person to engage in nonpeddler business within the City without first obtaining or renewing a business license or to fail to comply with any provision of this chapter.
(b) It shall be a misdemeanor for any person to make any false representation in connection with an application for a business license.
(c) Except as set forth in subsection (2)(e) of this section, it shall be a misdemeanor for any peddler to engage in business within the City without first obtaining or renewing a business license or for any peddler to fail to comply with any provision of this chapter.
(d) A second or subsequent violation of subsection (2)(a), (b) or (c) of this section shall be a gross misdemeanor.
(e) It shall be a civil infraction with a penalty of up to $1,000 for a peddler to conduct business without a valid business license or license application in his or her possession as required under SMC 5.05.030(2) if that peddler has in his or her possession federal, state, or local government-issued identification from which an officer can ascertain the peddler’s identity. A second or subsequent violation of this subsection within one year of a first violation shall be a gross misdemeanor.
(f) Persons employing or supervising peddlers who violate subsection (2)(c) or (2)(e) of this section shall be deemed to be in violation of those subsections as well. (Ord. O2005-177 § 1; Ord. O2002-118 § 9)
5.05.100 City manager authorized to enter into master license service agreement.
The City manager is hereby authorized to enter into an agreement with the state of Washington master license service under which that agency shall accept and process City business license applications. (Ord. O2003-126 § 1)