Chapter 3.32
UTILITY TAX
Sections:
3.32.030 Utility occupation activities subject to taxation.
3.32.050 Administration and audit.
3.32.060 Due date – Delinquency.
3.32.100 Underpayment of tax, interest, or penalty – Interest.
3.32.010 Imposed.
There is levied and shall be collected from every person a tax for the act or privilege of engaging in utility occupation activities as defined in SMC 3.32.030. Such tax shall be measured by the application of rates against the gross proceeds of sales from customers within the city. The tax provided for in this chapter shall be known as the “utility tax,” and is levied upon the privilege of conducting the business of manufacturing or distributing natural gas, telephone, cellular telephone, cable television, or solid waste collection business within the city of Shoreline. This tax is also levied upon any public or private operator of any municipal domestic water distribution and supply system or municipal domestic sewer system as a public utility. All revenues collected pursuant to this chapter shall be deposited into the general fund and shall be used for the funding of general city services or capital projects as the city council shall direct through its budget process. [Ord. 816 § 2(B), 2018; Ord. 634 § 1, 2012; Ord. 257 § 1, 2000]
3.32.020 Definitions.
As used in this chapter, unless the context or subject matter clearly requires otherwise, the words or phrases defined in this section shall have the indicated meanings:
A. “Cable television services” means the one-way transmission of video programming and associated nonvideo signals to subscribers together with subscriber interaction, if any, which is provided in connection with video programming.
B. “Cellular telephone service” means two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not currently subject to regulation by the Washington Utilities and Transportation Commission (WUTC). Cellular telephone service includes cellular mobile service. The definition of cellular mobile service includes other wireless radio communications services such as specialized mobile radio (SMR), personal communications services (PCS) and any other evolving wireless radio communications technology which accomplishes the same purpose as cellular mobile service.
C. “Gas distribution business” means the business of selling, furnishing, or transmitting gas, whether manufactured or natural.
D. “Gross proceeds of sale” or “gross income of business” means the value proceeding or accruing from the sale of tangible personal property and/or for services rendered, without any deduction on account of the cost of property sold, the cost of materials used, labor costs, interest, discount paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction for losses.
E. “Pager service” means service provided by means of an electronic device which has the ability to send or receive voice or digital messages transmitted through the local telephone network, via satellite or any other form of voice or data transmission.
F. “Person” means any person, firm, corporation, association, or entity of any type engaged in a business subject to taxation under this chapter.
G. “Solid waste collection business” means every person who receives solid waste or recyclable materials, or both, as defined in this section, for transfer, storage, or disposal including but not limited to all collection services, public or private solid waste disposal sites, transfer stations, and similar operations.
“Solid waste” or “wastes” means all putrescible and nonputrescible solid and semisolid wastes including, but not limited to, garbage, rubbish, ashes, industrial wastes, swill, sewage sludge, demolition and construction wastes, abandoned vehicles or parts thereof, and recyclable materials.
“Recyclable materials” means those solid wastes that are separated for recycling or reuse, such as papers, metals, and glass, that are designated as recyclable materials pursuant to SMC 13.14.010.
H. “Telephone business” means the business of providing network telephone service as defined in this section. It includes cooperative or farmer line telephone companies or associations operating an exchange.
“Network telephone service” means the providing by any person 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” does not include the providing of competitive telephone service, the providing of cable television service, or the providing of broadcast services by radio or television stations.
“Competitive telephone service” means the providing by any person 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.
I. “Sewerage operation” means operation of sanitary sewer facilities, including collection, treatment and disposal facilities, and combined sanitary and surface water drains and outfalls.
J. “Water distribution operation” means the operation of a plant or system for the distribution of water for hire or sale. [Ord. 634 § 2, 2012; Ord. 367 § 1, 2004; Ord. 257 § 2, 2000]
3.32.030 Utility occupation activities subject to taxation.
A. Upon every person within the city in the following activities; as to such persons, the amount of the tax due with respect to such business in the city shall be equal to the gross income of the business, multiplied by the following applicable rates:
|
Activity |
Tax Rate |
|---|---|
|
A. Gas Distribution Business |
6% |
|
B. Telephone Business |
6% |
|
C. Cellular Telephone Service |
6% |
|
D. Cable Television Service |
6% |
|
E. Solid Waste Collection Business |
6% |
|
F. Water Distribution Operation |
6% |
|
G. Sewerage Operation |
6% |
|
H. Paging Service |
6% |
B. Tax Credits – Exemptions. Water distribution operations and sewerage operations in good standing with a franchise or right-of-way use agreement issued under Chapter 12.25 SMC shall be exempt from taxation under this section for the term of the franchise or use agreement unless applicability of the utility tax or tax credit is specifically addressed in a franchise or use agreement entered after May 21, 2012. [Ord. 638 § 1, 2012; Ord. 634 § 3, 2012; Ord. 464 § 1, 2007; Ord. 257 § 3, 2000]
3.32.040 Deductions.
The following items may be deducted from the total gross income upon which the tax is computed:
A. Credit losses actually sustained by taxpayers whose regular books are kept on an accrual basis;
B. That portion of gross income derived from charges to another telecommunications company for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services, or charges for telephone service which the purchaser buys for the purpose of resale;
C. Adjustments made to a billing or customer account in order to reverse a billing or charge that was not properly a debt of the customer;
D. Amounts derived from a business which the city is prohibited from taxing under the Constitution of this state or the Constitution or laws of the United States;
E. Grants from governmental agencies. [Ord. 634 § 4, 2012; Ord. 257 § 4, 2000]
3.32.050 Administration and audit.
A. The administration and collection of the tax imposed by SMC 3.32.010 shall be by the administrative services director. The administrative services director is instructed and authorized to adopt appropriate reporting requirements and to make such further rules and regulations for the purpose of carrying out the provisions of this chapter.
B. Each taxpayer shall keep records reflecting the amount of the taxpayer’s gross income from sales and services within the city and such records shall be open at all reasonable times to the inspection of the administrative services director’s duly authorized agent upon reasonable notice for verification of tax returns. In the event that such audit discloses a discrepancy of more than 10 percent between the amount reported by the taxpayer and the actual gross revenues collected by the taxpayer, the taxpayer shall reimburse the city for all costs associated with said audit. [Ord. 827 § 6, 2018; Ord. 257 § 5, 2000]
3.32.060 Due date – Delinquency.
A. The tax imposed under SMC 3.32.010 shall be due and payable in monthly or quarterly installments at the taxpayer’s discretion, and shall accompany a return on a form approved by the administrative services director and be made on or before the thirtieth day of the month next succeeding the reporting period in which the tax accrued. Quarterly reporting periods shall begin the first day of the months of January, April, July and October.
B. If payment of any tax due on a return to be filed by a taxpayer is not received by the administrative services director by the due date, the administrative services director shall add a penalty in accordance with RCW 82.32.090(1), as it now exists or as it may be amended.
C. If the administrative services director determines that any tax has been substantially underpaid as defined in RCW 82.32.090(2), there shall be added a penalty in accordance with RCW 82.32.090(2), as it now exists or as it may be amended.
D. If a citation or criminal complaint is issued by the administrative services director for the collection of taxes, fees, assessments, interest or penalties, there shall be added thereto a penalty in accordance with RCW 82.32.090(3), as it now exists or as it may be amended.
E. If the administrative services director determines that all or any part of a deficiency resulted from the taxpayer’s failure to follow specific written tax reporting instructions, there shall be assessed a penalty in accordance with RCW 82.32.090(5), as it now exists or as it may be amended.
F. If the administrative services director finds that all or any part of the deficiency resulted from an intent to evade the tax payable, the administrative services director shall assess a penalty in accordance with RCW 82.32.090(6), as it now exists or as it may be amended.
G. The penalties imposed under subsections B through E of this section can each be imposed on the same tax found to be due. This provision does not prohibit or restrict the application of other penalties authorized by law.
H. The administrative services director shall not impose both the evasion penalty and the penalty for disregarding specific written instructions on the same tax found to be due.
I. For the purposes of this section, “return” means any document a person is required by the city of Shoreline to file to satisfy or establish a tax or fee obligation that is administered or collected by the city, and that has a statutorily defined due date.
J. If incorporation into the City of Shoreline Municipal Code of future changes to RCW 82.32.090 is deemed invalid, then the provisions of RCW 82.32.090 existing at the time of the effective date of the ordinance codified in this chapter shall apply. [Ord. 827 § 7, 2018; Ord. 257 § 6, 2000]
3.32.070 Unlawful acts.
It is unlawful for any person liable for the tax imposed by this chapter to fail to pay the tax when due or for any person to make any false or fraudulent return or any false statement in connection with the return. [Ord. 257 § 7, 2000]
3.32.080 Violation – Penalty.
Any person violating any provision of this chapter shall be guilty of a misdemeanor and upon conviction thereof punished pursuant to SMC 9.10.050. [Ord. 257 § 8, 2000]
3.32.100 Underpayment of tax, interest, or penalty – Interest.
A. If, upon examination of any returns, or from other information obtained by the administrative services director, it appears that a tax or penalty less than that properly due has been paid, the administrative services director shall assess the additional amount found to be due and shall add thereto interest on the tax only. The administrative services director shall notify the person by mail of the additional amount, which shall become due and shall be paid within 30 days from the date of the notice, or within such time as the administrative services director may provide in writing.
B. The administrative services director shall compute interest in accordance with RCW 82.32.050, as it now exists or as it may be amended. If this provision is held to be invalid, then the provisions of RCW 82.32.050 existing at the effective date of the ordinance codified in this chapter shall apply. [Ord. 827 § 8, 2018]