Chapter 5.04
BUSINESS LICENSES
Sections:
5.04.010 Purpose and authority.
5.04.030 State general business license – Sequim endorsement.
5.04.040 License expiration and renewal.
5.04.050 Application – City review and approval.
5.04.060 Separate licenses required – Nontransferable – Change of locations.
5.04.090 License fee delinquency charge.
5.04.100 Collection of license fees authorized by city.
5.04.105 Regulatory licenses and permits.
5.04.110 Recordkeeping – City authority.
5.04.120 Responsibility of nonresidents.
5.04.130 Denial – Suspension – Revocation of license.
5.04.150 Violations – Penalties.
5.04.160 Disclaimer of city liability.
5.04.010 Purpose and authority.
The provisions of this chapter are an exercise of the city’s power to license for revenue and of the city’s police power.
Chapter 35.90 RCW governs general business licensing in municipalities. Pursuant to RCW 35.90.050, the city of Sequim is authorized to set certain license fees, provide exemptions and thresholds for these licenses, approve or deny license applicants, and take appropriate administrative action against licensees.
The city council may also establish and require local regulatory licenses and permits consistent with state law. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 1, 1981)
5.04.020 Definitions.
In construing the provisions of this chapter, except when otherwise declared or clearly apparent from the context, the following definitions apply:
Engaging in Business.
1. The term “engaging in business” means commencing, conducting, or continuing in business, exercising corporate or franchise powers, and liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.
2. This chapter 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 chapter are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection (1) of this definition. If an activity is not listed, whether it constitutes engaging in business in the city will be determined by considering all the facts and circumstances and applicable law.
The city expressly intends that “engaging in business” includes any activity sufficient to establish nexus for purposes of applying a 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.
“General business license” means the license to engage in business that is available through the Washington State Department of Revenue Business Licensing Service and is required of any nonexempt individual or entity engaging in business within the city limits of Sequim.
“Regulatory license” means a license or permit required by the city of Sequim to engage in certain businesses within the city limits and is separate from and in addition to a general business license obtained through the Washington State Department of Revenue.
“Sequim endorsement” means the additional city endorsement on the general business license obtained through the Washington State Department of Revenue that allows nonexempt persons or entities to engage in business within the city limits of Sequim.
“Threshold exemption” means an exemption from the requirement to obtain a business license that is available to persons who do not maintain a place of business within the city limits and whose annual value of products, gross proceeds of sales, or gross income from engaging in business within the city limits does not exceed $5,000. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 2, 1981)
5.04.030 State general business license – Sequim endorsement.
A. Unless exempt under SMC 5.04.080, it is unlawful for any person or entity to engage in business within the corporate limits of the city of Sequim without having first obtained a general business license covering the activity from the Washington State Department of Revenue Business Licensing Service.
B. Further, unless a person or entity meets an exemption in SMC 5.04.080, before engaging in business within the city limits of Sequim, they must obtain and maintain a Sequim endorsement on the state general business license obtained from the Washington State Department of Revenue Business Licensing Service.
C. Without being all-inclusive, any one of the following activities conducted within the city by a person or entity, or any employee, agent, representative, independent contractor, broker, or another acting on their behalf, constitutes engaging in business and requires obtaining and maintaining a general business license and a Sequim endorsement from the Washington State Department of Revenue Business Licensing Service.
1. 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.
2. Owning, renting, leasing, using, or maintaining, an office, place of business, or other establishment in the city.
3. Soliciting sales.
4. Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.
5. 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 entity or on their behalf.
6. Installing, constructing, or supervising installation or construction of, real or tangible personal property.
7. Soliciting, negotiating, or approving franchise, license, or other similar agreements.
8. Collecting current or delinquent accounts.
9. Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.
10. 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.
11. 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.
12. Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.
13. 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.
14. Investigating, resolving, or otherwise assisting in resolving customer complaints.
15. 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.
16. Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or entity or another acting on their behalf.
D. Businesses operated at one location comprised of a combination of business activities under one ownership are only required to have one general business license and Sequim endorsement. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 2005-029 § 2; Ord. 429 §§ 3 – 6, 1981. Formerly 5.04.030, 5.04.040, 5.04.050, 5.04.060)
5.04.040 License expiration and renewal.
Unless otherwise provided by this chapter, all general business licenses and Sequim endorsements expire on the date established by the Washington State Department of Revenue Business Licensing Service. Business license renewals must be accomplished and paid for each year through the Business Licensing Service. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 7, 1981. Formerly 5.04.070)
5.04.050 Application – City review and approval.
A. Obtaining a general business license is accomplished by filing an application through the Washington State Department of Revenue Business Licensing Service and paying all applicable fees, including the Sequim endorsement fee for engaging in business within the city limits of Sequim.
B. The city must receive and approve the general business license and Sequim endorsement issued by the Business Licensing Service before the applicant engages in business within the city limits.
C. Obtaining a regulatory license or permit is accomplished by filing the pertinent application with the applicable city department. Written approval from the city must be obtained before the locally regulated business is engaged in within the city limits.
D. The review process for general business or regulatory licenses may involve multiple city departments, and a background check of the applicant may be conducted. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 8, 1981. Formerly 5.04.080)
5.04.060 Separate licenses required – Nontransferable – Change of locations.
Licenses to engage in business in the city of Sequim are personal and nontransferable. In cases where business is engaged in at two or more separate places by one person within the city limits, a separate license is required for each place in which business is transacted with the public. A new license application and approval is required when a licensee moves locations within the city limits. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 9, 1981. Formerly 5.04.090)
5.04.070 Fees.
Applicants for general business licenses pay a fee to the Washington State Department of Revenue Business Licensing Service. The separate fee required for a Sequim endorsement is also paid through that service. See SMC 5.04.105 for regulatory license/permit fee provisions. The license fees imposed in this chapter are in addition to any fee imposed under any law or any other city ordinance, except as otherwise expressly provided in this chapter. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 11, 1981. Formerly 5.04.080)
5.04.080 Exemptions.
A. If a person or entity engages in no activities in the city other than those enumerated below, there is no requirement to obtain or maintain a Sequim endorsement but a Washington general business license or the nonprofit equivalent may still be required:
1. Meeting with suppliers of goods and services as a customer.
2. Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.
3. 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.
4. Renting tangible or intangible property as a customer when the property is not used in the city.
5. Attending, but not participating in, a trade show or multiple vendor events. Persons participating at a trade show must review the city’s trade show or multiple vendor event ordinances, such as Chapter 8.38 SMC, Special Events.
6. Conducting advertising through the mail.
7. Soliciting sales by phone from a location outside the city.
8. A seller located outside the city merely delivering goods into the city by means of common carrier who engages in no other nonexempt business activities in the city.
9. Peddling or delivering newspapers.
10. Doing business or operating a business as a minor where no other person is employed by the minor, such as babysitting, lawn mowing, car washing, operating a juice stand, and similar activities.
11. Engaging in sales or services no more than four times during any tax year when the person is not engaged in the ongoing business of selling the type of property or service involved (e.g., garage sales, bake sales, and occasional parties for the sale or distribution of goods).
12. Technology companies that provide software systems and support on a subscription basis to persons or businesses located within the city.
13. Providers of internet, streaming, 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 the service.
14. Businesses subject to the city’s utilities tax in Chapter 5.32 SMC.
B. Businesses and organizations operated not-for-profit are considered exempt under this chapter if they can provide satisfactory proof to the city of their not-for-profit status. The city may require that the business or organization have a nonprofit business license from the State of Washington Department of Revenue.
C. Sponsors of special events that have received a special event permit from the city, or contractors or vendors participating in special events that received a special event permit from the city, are considered exempt under this chapter and do not need to obtain a Sequim endorsement to conduct business at the event.
D. Instrumentalities of the United States, the state of Washington, or any political subdivision thereof are considered exempt under this chapter and do not need to obtain a Sequim endorsement to engage in business within the city.
E. Any farmer or gardener who sells, delivers, or peddles any fruit, vegetables, berries, butter, eggs, fish, milk, poultry, meats, or any farm produce or edibles raised, caught, produced, or manufactured by such person are considered exempt under this chapter and do not need to obtain a Sequim endorsement to engage in business within the city unless they maintain a permanent or semi-permanent structure or vehicle located in the city limits from which the sales are made.
F. Tax-exempt nonprofit organizations recognized by the state of Washington and the United States government are considered exempt under this chapter and do not need to obtain a Sequim endorsement to engage in business within the city.
G. Nonprofit organizations, clubs, or corporations maintained for organized sports, charity, public school-related activities, or municipal-related activities, including police or fire department reserve organizations, are considered exempt under this chapter and do not need to obtain a Sequim endorsement to engage in business within the city.
H. Threshold Exemption (RCW 35.90.080). Any person or business:
1. Whose annual value of products, gross proceeds of sales, or gross income from business conducted within the city is equal to or less than $5,000 (or such other amount as may be enacted by statute, ordinance, or resolution); and
2. Who does not maintain a place of business within the city;
is exempt from the Sequim endorsement requirements in this chapter. This exemption does not apply to regulatory license requirements or activities that require a specialized permit from the city or to any general business license requirement of the state of Washington. (Ord. 2023-010 § 1 (Exh. A); Ord. 2020-011 § 1 (Exh. B); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 494 § 1, 1986; Ord. 429 § 12, 1981. Formerly 5.04.090)
5.04.090 License fee delinquency charge.
In addition to the required annual license fee, the Washington State Department of Revenue may assess and collect a delinquency charge as established in Chapter 19.02 RCW. The city may assess and collect a delinquency charge on its local regulatory licenses as established by the city council in Chapter 3.68 SMC, Rates and Fees. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 2005-029 § 2; Ord. 450 § 2, 1983; Ord. 429 § 13, 1981. Formerly 5.04.100)
5.04.100 Collection of license fees authorized by city.
The local regulatory license fees required under this chapter and all penalties thereon constitute a debt to the city. Such penalties may be collected in the same manner as any other debt in like amount, in addition to all other existing remedies, and include the city’s right to judgment for costs and reasonable attorney’s fees. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 14, 1981. Formerly 5.04.110)
5.04.105 Regulatory licenses and permits.
The city may require regulatory licenses or permits for certain businesses. Regulatory licenses are in addition to any general business license or Sequim endorsement that is obtained through the Washington State Department of Revenue. Examples of regulatory licenses or permits are those required by the city in Chapters 5.24 (Peddlers and Solicitors), 5.28 (For-Hire Vehicles), and 5.40 SMC (Adult Entertainment). Fees for regulatory licenses and permits are as set forth in Chapter 3.68 SMC, Rates and Fees. (Ord. 2023-010 § 1 (Exh. A))
5.04.110 Recordkeeping – City authority.
The director of the administrative services department or designee will keep full and accurate records of business licenses of persons engaged in business within the city of Sequim, pursuant to the State Archivist’s retention guidelines. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 15, 1981. Formerly 5.04.120)
5.04.120 Responsibility of nonresidents.
The agents or other representatives of nonresidents who engage in business in the city are personally responsible for their principals’ compliance with this chapter. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 18, 1981. Formerly 5.04.130)
5.04.130 Denial – Suspension – Revocation of license.
A. A general business or regulatory license to engage in business within the city of Sequim may be denied, suspended, or revoked if any one of the following apply:
1. Fraud, misrepresentation, concealment, or false or misleading statement in the application for license. Minor flaws in the application, such as scrivener’s errors or unintentional and inconsequential inaccuracies, may not be construed as false or misleading information;
2. Any violation of this chapter;
3. A documented pattern of illegal activities has occurred associated with the business on or off premises;
4. The licensee/applicant or their employee or agent has been convicted of a crime or suffered civil judgment or consent decree that bears a direct relationship to the conduct of the business;
5. The licensee/applicant has conducted the business in an unlawful manner, or in such a manner as to cause or is likely to cause impacts to city infrastructure, life-safety, or the environment;
6. The licensee/applicant has failed to meet or comply with any of the provisions of this chapter or other applicable state, federal, or local law, including, without limitation, building and zoning codes, or code enforcement requirements and deadlines;
7. The licensee/applicant or their employee or agent has engaged in, allowed, or acquiesced in unlawful drug-related or other criminal activity on the business premises; or
8. The licensee/applicant or their employee or agent has violated any law or ordinance relating to the regulation of the business licensed pursuant to this chapter, or any health or safety ordinance;
9. The license is being used for a purpose different from that for which it was issued.
B. The city through its director of administrative services or designee will provide written notice to the applicant or licensee of the reasons for denial, suspension, or revocation of a license. The notice will be mailed to the last known address of applicant or licensee. Should a license be revoked, all business operations on the premises must immediately cease until such time as the business license is reinstated. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 20, 1981. Formerly 5.04.140)
5.04.140 Appeals.
A. Appeals of the city’s decision to deny, suspend, or revoke a license to do business within the city of Sequim may be made to the city council by filing a written notice of appeal with the city clerk within 20 calendar days from the date of the city’s decision. Appeals must contain all the following:
1. A brief statement setting forth each appellant(s)’ legal interest in the business involved in the denial, suspension, or revocation;
2. A brief statement, in concise language, of the specific order or action protested, together with any material facts claimed to support appellant(s)’ contentions;
3. A brief statement, in concise language, of the relief sought, and the reasons why it is claimed the protested action or decision should be reversed, modified, or otherwise set aside;
4. The signatures and official mailing addresses of all persons named as appellants;
5. Each appellant’s verification (by declaration under penalty of perjury) as to the truth of the matters stated in the appeal.
B. The city clerk will schedule a hearing before the city council to consider the appeal as soon as practicable. In those cases when a business license is revoked and requires stopping all business activities covered by the revoked license, the business owner is entitled to an expedited appeal hearing. Only those matters or issues specifically raised by the appellant(s) in the written notice of appeal will be considered in the hearing. Public testimony will not be considered during the hearing; city staff and appellant(s), including appellant(s)’ agents, may offer relevant evidence and testimony regarding the decision.
C. Notice of the hearing will be provided to the appellant(s) via certified mail at least 10 calendar days before the hearing date.
D. The city council may delay its decision or continue the hearing until the next regular city council meeting as it deems necessary.
E. Enforcement of any suspension or revocation of any business license will be stayed during the pendency of a properly and timely filed appeal.
F. Failure of any aggrieved party to file an appeal in accordance with the provisions of this chapter constitutes a waiver of the right to an appeal and adjudication of the decision.
G. The city council may delegate its authority to hear such denials, suspensions, or revocations to a hearing examiner. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A))
5.04.150 Violations – Penalties.
A. Violations of this chapter are handled pursuant to Chapter 1.13 SMC (Code Enforcement).
B. Potential penalties for violation of this chapter are as set forth in Chapters 1.12 and 1.13 SMC, as applicable. The city will determine which penalty will be used to enforce violations of this chapter based on the seriousness of the offense, whether it poses a risk to public safety and the violator’s efforts to achieve compliance. Each day a violation continues may be considered a separate violation.
C. Additional Relief. The city may seek legal or equitable relief to enjoin any acts or practices or abate any condition that constitutes or will constitute a violation of the applicable provisions of this chapter when penalties provided here are inadequate to effect compliance. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A); Ord. 429 § 17, 1981. Formerly 5.04.180)
5.04.160 Disclaimer of city liability.
This chapter does not create any duty by the city of Sequim to indemnify a licensee, or any city duty to third parties for any wrongful acts against the public by any licensee or their agents, officers, or employees, or to guarantee the quality of goods, services, or expertise of a licensee. Nothing in this chapter may be construed to shift responsibility from the licensee to the city of Sequim for proper training, conduct, or equipment of the licensee or the licensee’s agents, even if specific regulations require standards of training, conduct, or inspection. (Ord. 2023-010 § 1 (Exh. A); Ord. 2018-011 § 1 (Exh. A); Ord. 2015-014 § 1 (Exh. A))