Chapter 5.32
UTILITIES
Sections:
5.32.040 Quarterly installments – Due when.
5.32.050 Deductions from gross operating revenues.
5.32.080 Overpayments – Credits – Refunds – Appeals.
5.32.090 Notice of annexation.
5.32.130 Noncompliance – Civil penalty.
State law reference(s): Utility tax, RCW 82.16.010 et seq.; excise tax on telephone business, RCW 35A.82.060; network telephone service, RCW 35A.82.065; referendum procedure, RCW 35.21.706; minimum waiting period, RCW 35.21.865; tax limitation, RCW 35.21.870.
5.32.010 Purpose.
The provisions of the ordinance codified in this chapter shall be deemed to be an exercise of the power of the city to license for revenue. (Ord. 2005-035; Ord. 423 § 1, 1981)
5.32.015 Definitions.
The following words, terms, and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
“Cellular telephone service” means any two-way voice and/or data telephone or similar communications system based in whole or in substantial part on wireless radio communications, including cellular mobile service, and which is not subject to regulation by the Washington State Utilities and Transportation Commission that conflicts with or overrides this chapter. Cellular telephone service includes other wireless radio communications services including, without limitation, specialized mobile radio, paging services, personal communications and data services, and any other evolving wireless radio communications technology that accomplishes a purpose substantially similar to cellular telephone service. Cellular telephone service is included within the definition of “telephone business” for the purposes of this chapter.
“Competitive telephone service” means the providing by any person, firm, or corporation of telecommunications equipment or apparatus, or service related to that equipment or apparatus such as repair or maintenance service, if the equipment or apparatus 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.
“Gross income” means the value proceeding or accruing from the performance of the particular public service business involved, including operations incidental thereto, but without any deduction on account of the cost of the commodity furnished or sold, the cost of materials used, labor costs, interest, discounts, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses. In addition, when determining total gross income from cellular telephone service, “gross income” shall include all income from cellular telephone service (including roaming charges incurred outside this state) provided to customers whose place of primary use is in the city, regardless of the location of the facilities used to provide the service. The customer’s place of primary use is, with respect to each telephone: (1) the customer’s address shown on the telephone service company’s records; or (2) the customer’s place of residence if the telephone is for personal use, and in both cases must be located within the licensed service area of the home service provider. Roaming charges and cellular telephone charges to customers whose place of primary use is outside the city of Sequim will not be taxable even though those cellular services are provided within the city of Sequim. There is a rebuttable presumption that the address shown on the cellular telephone service company’s records is the place of primary use and is accurate. If the cellular telephone service company knows or should have known that a customer’s place of primary use address for a telephone is within the city, then the gross income from cellular telephone service provided to that customer with respect to that telephone is to be included in the company’s gross income.
“Natural gas” or “gas,” as used in this chapter, shall not include propane delivered by means other than distribution pipeline as defined in RCW 81.88.010(3), as presently enacted or hereafter amended.
“Network telephone service” means the providing by any person, firm, or corporation of access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, or the providing of 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. “Network telephone service” includes interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this state if the charge for the service is billed to a person in this state. “Network telephone service” includes the provision of transmission to and from the site of an Internet provider via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. “Network telephone service” does not include the providing of competitive telephone service, the providing of cable television service, the providing of broadcast services by radio or television stations, or the provision of Internet service as defined in RCW 82.04.297, including the reception of dial-in connection, provided at the site of the Internet service provider.
“Telephone business” means the business of providing network telephone service and cellular telephone service, as those terms are defined in this section, and includes cooperative or farmer line telephone companies or associations operating an exchange. “Competitive telephone service” shall not be considered “telephone business.” Telephone business shall include 100 percent of the business and total gross income derived from calls originating and/or billed to subscribers within the city. (Ord. 2008-015 § 1; Ord. 2005-035)
State law reference(s): Similar provisions, RCW 82.04.065.
5.32.020 License required.
After the effective date of this chapter, no person, firm or corporation shall engage in or carry on any business, occupation, act or privilege for which a tax is imposed by SMC 5.32.030 without first having obtained, and being the holder of, a license so to do, to be known as an occupation license. Each such person, firm or corporation shall promptly apply to the city clerk for such license upon such forms as the city clerk shall deem reasonably necessary to enable the clerk’s office to administer and enforce this chapter and, upon acceptance of such application by the clerk, the clerk shall thereupon issue such license to the applicant. The occupation license shall be personal and nontransferable and shall be valid as long as the licensee continues in the business and complies with this chapter. (Ord. 2005-035; Ord. 423 § 2, 1981)
5.32.030 Taxes levied.
In addition to the other business and license fees required by the ordinances of the city, the city levies upon all persons, firms, or corporations (including the city) engaged in certain business activities, a utilities tax as set forth herein.
From and after the effective date of the ordinance codified in this chapter, there is levied upon and shall be collected from every person, firm or corporation engaged in carrying on the following business for hire or for sale of a commodity or a service within or partly within the corporate limits of the city, the tax for the privilege of so doing business as hereinafter defined, as follows:
A. 1. Upon any telephone business there shall be levied a tax as established by Resolution R-2007-17 as adopted and as hereafter amended, which includes revenues from intrastate toll, derived from the operation of such businesses within the city. Gross operating revenues for this purpose shall not include charges which are passed on to the subscribers by a telephone company pursuant to tariffs required by regulatory order to compensate for the cost to the company of the tax imposed by this chapter.
2. “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 communication or transmission for hire, via a local telephone network, toll line or channel, 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.
3. “Competitive telephone service” means the providing by any person 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.
B. There is levied a tax on the sale, delivery or distribution of electricity and electrical energy and for the privilege of carrying on the business, a tax to be equal to six percent of the total gross operating revenues derived from sales of such electricity to ultimate users within the city or as hereafter amended by resolution; provided, however, that there shall not be any tax levied for the installation charges of electrical units.
C. There is levied upon every person, firm, or corporation engaging in or carrying on a business of selling, wheeling, furnishing, distributing, or producing gas, whether manufactured or natural, for commercial or domestic use or purposes, a fee or tax in an amount which has been established by Resolution R-2007-17 and as hereafter amended by resolution.
D. There is levied upon every person, firm, or corporation engaging in or carrying on a business providing solid waste collection services, a tax in an amount which has been set by Resolution R-2007-17 and as hereafter amended by resolution.
E. There is levied upon every person (including the city) engaging in or carrying on the business of selling, furnishing, or distributing water, sewer, or drainage services, a tax in an amount which has been set by Resolution R-2007-17 and which shall be as amended by resolution in the future. (Ord. 2008-002 § 2; Ord. 2005-035; Ord. 423 § 3, 1981)
5.32.040 Quarterly installments – Due when.
A. The tax imposed by this chapter shall be due and payable in quarterly installments and remittance shall be made on or before the twentieth day of the month next succeeding the end of the quarterly period in which the tax accrued. Such quarterly periods are as follows:
1. First quarter: January, February and March.
2. Second quarter: April, May and June.
3. Third quarter: July, August and September.
4. Fourth quarter: October, November and December.
B. The first payment made under this chapter shall be made by April 30, 1982, for the three-month period ending March 31, 1982. On or before the due date the taxpayer shall file with the city clerk a written return, upon such form and setting forth such information as the clerk shall reasonably require, together with the payment of the amount of the tax. (Ord. 2005-035; Ord. 423 § 4, 1981)
5.32.050 Deductions from gross operating revenues.
In computing the 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;
B. Amounts derived from transactions in interstate or foreign commerce or from any business in which the city is prohibited from taxing under the Constitution of the United States or the Constitution of the state;
C. Amounts derived by the taxpayer from the city. (Ord. 2005-035; Ord. 423 § 5, 1981)
5.32.060 Records to be kept.
Each taxpayer shall keep records reflecting the amount of his gross operating revenues, and such records shall be open at all reasonable times to the inspection of the city clerk, or his duly authorized subordinates, for verification of the tax returns or for the fixing of the tax of a taxpayer who fails to make such returns. (Ord. 2005-035; Ord. 423 § 6, 1981)
5.32.070 Failure to pay tax.
If any person, firm or corporation subject to this chapter fails to pay any tax required by this chapter within 30 days after the due date thereof, there shall be added to the tax a penalty of 12 percent of the amount of the tax, and any tax due under this chapter and unpaid, and all penalties thereon, shall constitute an debt to the city and may be collected by court proceedings, which remedy shall be in addition to all other remedies, and shall include reasonable attorneys’ fees. The city may, pursuant to Chapter 19.16 RCW, use a collection agency to collect taxes, interest, and penalties owed or assessed, or it may seek collection by court proceedings, which remedies shall be in addition to all other remedies. (Ord. 2005-035; Ord. 423 § 7, 1981)
5.32.080 Overpayments – Credits – Refunds – Appeals.
Any money paid to the city through error or otherwise not in payment of the tax imposed by this chapter or in excess of such tax shall, upon the request of the taxpayer, be credited against any tax due or to become due from such taxpayer hereunder or, upon the taxpayer ceasing to do business in the city, be refunded to the taxpayer. Any taxpayer aggrieved by the amount of tax, interest, or penalties determined by the clerk or finance director to be due under the provisions of this chapter may appeal such determinations to the city manager. Taxpayers shall be required to remit the amounts determined to be due under this chapter prior to filing an appeal. (Ord. 2005-035; Ord. 423 § 8, 1981)
5.32.090 Notice of annexation.
Whenever the boundaries of the city are extended by annexation, all persons, firms and corporations subject to this chapter will be provided copies of all annexation ordinances by the city. (Ord. 2005-035; Ord. 423 § 9, 1981)
5.32.100 Unconstitutionality.
The invalidity or unconstitutionality of any provision or section of this chapter shall not render any other provision or section of this chapter invalid or unconstitutional. (Ord. 2005-035; Ord. 423 § 10, 1981)
5.32.110 Administration.
The city clerk 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 a violation of this chapter to violate or to fail to comply with any such rule or regulation lawfully promulgated hereunder. (Ord. 2005-035; Ord. 423 § 11, 1981)
5.32.120 False returns.
It is unlawful for any person, firm, or corporation subject to this chapter to fail or refuse to pay the tax when due, or for any person, firm, or corporation to make any false or fraudulent application or return or any false statement or representation in, or in connection with such return, or to aid or abet another in any attempt to evade payment of the tax, or any part thereof, or to testify falsely upon any investigation of the correctness of a return upon the hearing of an appeal or in any manner hinder or delay the city or any of its officers in carrying out the provisions of this chapter. (Ord. 2005-035)
5.32.130 Noncompliance – Civil penalty.
Any person, firm, or corporation subject to this chapter who fails or neglects to make tax returns or who makes a false statement or representation in or in connection with a utility tax return, or who otherwise violates or refuses to comply with this chapter, is subject to a cumulative penalty in the amount of $100.00 per day for each violation, in addition to the nonpayment penalty imposed under SMC 5.32.070. All penalties imposed under this chapter shall constitute a debt to the city. The city may, at its discretion, pursuant to Chapter 19.16 RCW, use a collection agency to collect taxes, interest, and penalties owed or assessed pursuant to this chapter, or the city may seek collection by court proceedings, which remedies shall be in addition to all other remedies. (Ord. 2005-035)