Chapter 5.04
OCCUPATION LICENSING AND TAXES
Sections:
5.04.010 Exercise of revenue and licensing power.
5.04.030 Telephone business – Tax levied – Payment.
5.04.040 Tax rate – Electric power and natural gas businesses.
5.04.050 Tax rate – Telephone businesses.
5.04.060 Tax rate – Water, sewer and garbage service.
5.04.065 Tax rate – Cable television.
5.04.070 Multiple service businesses – Prompt payment.
5.04.100 Occupation license – Required – Term.
5.04.110 Payments – Methods – Recordkeeping.
5.04.120 Purchaser of business liable for tax.
5.04.130 Information deemed private.
5.04.140 Correction of errors.
5.04.150 Determination by City of amount due.
5.04.170 Tax additional to other taxes or fees – Exception.
5.04.180 Tax deemed debt to City – Collection authority.
5.04.190 Appeals – Subpoena power.
5.04.200 Liability of City departments for taxes.
5.04.010 Exercise of revenue and licensing power.
The provisions of this chapter shall be deemed an exercise of power of the City to license and/or tax for revenue the privilege of engaging in business in the City of Sunnyside. For the purposes of this chapter, the terms “license” and “tax” shall be synonymous. (RCW 35A.82.020). [Ord. 2139 § 1, 2006; 1956 Code § 5-201.]
5.04.020 Definitions.
In construing this chapter, except when otherwise plainly declared or clearly apparent from the context, the following definitions shall be applied:
A. “Cellular telephone service” is a two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not subject to regulation by the Washington Utilities and Transportation Commission (WUTC). This includes cellular mobile service. The definition of cellular mobile service includes other wireless radio communications services as specialized mobile radio (SMR), personal communications services (PCS) and any other evolving wireless radio communications technology which accomplishes a purpose similar to cellular mobile service.
B. “City” means the City of Sunnyside.
C. “Competitive telephone service” means the providing by any person of telecommunications equipment or apparatus or service related to that equipment or apparatus, such as a repair or maintenance service, if the equipment or apparatus is of a type which can be provided by persons who are not subject to regulation as telephone companies under RCW Title 80, and for which a separate charge is made.
D. “Gross income” means the value proceeding 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 evidence of indebtedness of stocks and the like) and without any deduction on account of the cost of the property sold, and the cost of materials used, labor costs, interest or any expenses whatsoever, and without any deduction on account of losses.
E. “Taxpayer” means any person liable to the license fee or tax imposed by this chapter.
F. “Tax year” or “taxable year” means the year commencing January 1st and ending on the last day of December of the same year or, in lieu thereof, the taxpayer’s fiscal year when permission is obtained from the City Clerk to use the same as the tax period.
G. “Network telephone service” means the providing by any person of access to a local telephone network, local telephone switching service, toll service, 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 cellular telephone service, and includes the provision of transmitting to and from the site of an Internet service provider via a telephone network, toll line or channel, cable, microwave, or similar communication or transmitting system. It also encompasses interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this State if the charge for 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, nor 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.
H. “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 a satellite or any other form of voice or data transmission.
I. “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. Telephone business shall include 100 percent of the toll service fees from calls originating and/or billed to subscribers within the City of Sunnyside. [Ord. 2139 § 1, 2006; 1956 Code § 5-202.]
5.04.030 Telephone business – Tax levied – Payment.
A. The license fee or tax imposed by this chapter shall be due and payable in monthly installments. Businesses with gross income of less than $20,000 per month, as indicated by the billings or charges to Sunnyside customers, may pay the license fee or tax imposed by this chapter in quarterly installments.
The quarterly periods are as follows:
1. First quarter – January, February, March;
2. Second quarter – April, May, June;
3. Third quarter – July, August, September;
4. Fourth quarter – October, November, December. [Ord. 2139 § 1, 2006; 1956 Code § 5-203.]
5.04.040 Tax rate – Electric power and natural gas businesses.
The tax provided for in this chapter shall be computed at the rate of six percent of the gross income derived from each of the following occupations or business activities conducted within the corporate limits of the City:
A. All persons engaged in or carrying on the business of selling or furnishing electric light and power for hire;
B. All persons engaged in or carrying on the business of selling or furnishing natural gas for hire. [Ord. 2139 § 1, 2006; Ord. 1531 § 1, 1985; Ord. 1368 § 7, 1982; Ord. 1298 § 1, 1980; 1956 Code § 5-203(A-1).]
5.04.050 Tax rate – Telephone businesses.
A. Tax Rate. A fee or tax as specified herein is hereby levied upon and shall be collected from every person engaging in or carrying on the following businesses:
1. Cellular Telephone and/or Pager Services Business. A fee or tax equal to six percent of the total gross income from cellular telephone or pager services business conducted within the City of Sunnyside, as indicated by billings and/or charges to Sunnyside customers.
2. Telephone Business. A fee or tax equal to six percent of the total gross income from telephone business conducted within the City of Sunnyside, as indicated by billings and/or charges to Sunnyside customers.
B. Exclusions and Deductions. The following shall be deducted from the total gross income upon which the tax is computed:
1. That portion of the gross income derived from charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services.
2. Charges by a taxpayer engaging in a telephone business or to a telecommunications company, as defined in RCW 80.04.010, for telephone service that the purchaser buys for the purpose of resale.
3. Adjustments made to a billing or to a customer account or to a telecommunications company accrual account in order to reverse a billing or charge that had been made as a result of third-party fraud or other crime and was not properly a debt of a customer.
4. Charges to cellular telephone service subscribers passed on to compensate for the cost to the company of the tax imposed by this chapter.
5. A deduction from gross income for credit losses actually sustained by a taxpayer shall be allowed from companies which keep their regular books of account on an accrual basis.
C. Allocation of Income — Cellular Telephone Service.
1. Service Address. Payments by a customer for the telephone service from telephones without a fixed location shall be allocated among taxing jurisdictions to the location of the customer’s principal service address during the period for which the tax applies.
2. Presumption. There is a presumption that the service address a customer supplies to the taxpayer is current and accurate, unless the taxpayer has actual knowledge to the contrary.
3. Roaming Phones. When the service is provided while a subscriber is roaming outside the subscriber’s normal cellular network area, the gross income shall be assigned consistent with the taxpayer’s accounting system to the location of the originating cell site of the call, or to the location of the main cellular switching office that switched the call.
4. Dispute Resolution. If there is a dispute among one or more cities, and/or the taxpayer, as to the service address of a customer who is receiving cellular telephone services and the dispute is not resolved by negotiation among the parties, then the dispute shall be resolved by the City of Sunnyside and the other city or cities by submitting the issue for settlement to the Association of Washington Cities (AWC). Once taxes on the disputed revenues have been paid to one of the contesting cities, the cellular telephone service company shall have no further liability with respect to additional taxes, penalties, or interest on the disputed revenues so long as it promptly changes its billing records for future revenues to comport with the settlement facilitated by AWC. [Ord. 2139 § 1, 2006; Ord. 1531 § 2, 1985; Ord. 1368 § 7, 1982; Ord. 1335 § 1, 1981; Ord. 1298 § 2, 1980; 1956 Code § 5-203(A-2).]
5.04.060 Tax rate – Water, sewer and garbage service.
The tax provided for in this chapter shall be computed at the rate of 29 percent of the gross income derived from each of the following occupations or business activities conducted within the corporate limits of the City: all persons engaged in or carrying on the business of selling or supplying domestic water, sewer services, or collecting or disposing of garbage and/or sewage or other wastes, including, but not limited to, water, sewer, solid waste and garbage departments of the City. Per RCW 82.18.020, there is imposed an additional solid waste collection tax equal to three and six-tenths percent of the consideration charged for the services. [Ord. 2018-13 § 1, 2018; Ord. 2017-15 § 1, 2017; Ord. 2013-2 § 1, 2013; Ord. 2139 § 1, 2006; Ord. 1531 § 3, 1985; Ord. 1368 § 7, 1982; Ord. 1298 § 3, 1980; 1956 Code § 5-203(C).]
5.04.065 Tax rate – Cable television.
The tax provided in this section shall be computed at the rate of six percent of the total gross income derived by persons engaged in or carrying on cable television business within the corporate limits of the City. Gross income derived shall mean a total income derived from a monthly charge for cable television, together with HBO or other subscriber service provided of a similar nature. Gross operating revenue shall not include the cost of installing cable service to a customer under the normal rate charge by a cable television company. [Ord. 2139 § 1, 2006; Ord. 1531 § 4, 1985; Ord. 1368 § 7, 1982; Ord. 1335 § 2, 1981.]
5.04.070 Multiple service businesses – Prompt payment.
A. Any person engaged in or carrying on more than one such business, occupation, pursuit or privilege shall pay the license tax so imposed for each of the same.
B. Any taxpayer who is engaged in or carries on any business subject to the tax under this chapter, and who fails or refuses to pay the tax or any part thereof on or before the due date shall be operating in violation of this chapter. [Ord. 2139 § 1, 2006; 1956 Code § 5-203(D), (E).]
5.04.080 Payments – Terms.
A. The license fee or tax imposed by this chapter shall be due and payable in monthly installments. Businesses with gross income of less than $20,000 per month, as indicated by the billings or charges to Sunnyside customers, may pay the license fee or tax imposed by this chapter in quarterly installments. The remittance shall be made as provided in SMC 5.04.110 and shall be accompanied by a return on a form to be provided and prescribed by the City. To the return the taxpayer shall be required to swear or affirm that the information therein given is full and true and that the taxpayer knows the same to be so. Whenever the total tax for which any person is liable under this chapter does not exceed the sum of $50.00 for any quarterly period, an annual return may be made upon written request and subject to the approval of the City.
B. If the quarterly payment of the tax is authorized by the City, the taxpayer shall pay such quarterly payment on or before the thirtieth day of the month next succeeding the end of the quarterly period in which the tax accrued.
C. Whenever a taxpayer commences to engage in business during any quarterly period, his first return and license fee or tax shall be based upon and cover the portion of the quarterly period during which he engaged in business. [Ord. 2139 § 1, 2006; 1956 Code § 5-205.]
5.04.090 Tax exemptions.
A. There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed so much thereof as is derived from transactions in interstate or foreign commerce or from business done with the government of the United States, its officers or agents, and any amount paid by the taxpayer to the United States or the State of Washington, as excise taxes levied or imposed upon the sale or distribution of property or service.
B. There shall be excepted from the total gross income upon which the license fee or tax is computed all bad debts for services incurred, rendered, or charged for during the tax year. Debts shall be deemed bad and uncollectible when the same have been written off the books of the taxpayer. In the event debts are subsequently collected, said income shall be reported in the return for the quarter in which said debts are collected and at the rate prevailing in the tax year when collected.
C. There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed all cash discounts allowed and actually granted to customers of the taxpayer during the tax year.
D. Nothing in this chapter shall be construed as requiring a license or 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. 2139 § 1, 2006; 1956 Code § 5-206.]
5.04.100 Occupation license – Required – Term.
A. On or after the first day of January, 1966, no person subject to the payment of the tax provided under this chapter shall engage in any business or activity in the City for which a tax is imposed by this chapter without first having obtained and being the holder of a valid and subsisting license so to do, to be known as an occupation license issued under the provisions of this chapter. Application for license shall be made to and issued by the City on forms provided by the City. Such license shall expire at the end of the calendar year in which it is used, and a new license shall be required for each calendar year.
B. The license shall be personal and nontransferable. Each license shall be numbered, shall show the name, place and character of business of the taxpayer and such other information as the City Clerk shall deem necessary and shall at all times be conspicuously posted in the place of business for which it is issued.
C. No person to whom a license has been issued pursuant to this chapter shall suffer or allow any other person for whom a separate license is required to operate under or display his license nor shall such other person operate under or display such license. [Ord. 2139 § 1, 2006; 1956 Code § 5-207.]
5.04.110 Payments – Methods – Recordkeeping.
A. The license fee or tax payable under this chapter shall, at the time of the return being required to be filed, be paid to the City by bank draft, certified check, cashier’s check, personal check or money order, or in cash. If payment is made by draft or check, the tax or fee shall not be deemed paid until the check or draft is honored in the usual course of business; nor shall the acceptance of any sum by the City be an acquittance or discharge of the tax or fee due unless the amount of payment is in full and the actual amount due.
B. It shall be the duty of every person liable for the payment of any fee or tax imposed by this chapter to keep and preserve for the period of three years such books and records as will accurately reflect the amount of his gross income as defined in SMC 5.04.020 and from which can be determined the amount of any fee or tax for which he may be liable under the provisions of this chapter and all books as provided in this section shall be open for examination at all reasonable times by the City Manager or his duly authorized agent. [Ord. 2139 § 1, 2006; 1956 Code § 5-208.]
5.04.120 Purchaser of business liable for tax.
Upon the sale or transfer during a quarterly period of a business or account of which a license fee or tax is required, the purchaser or transferee shall, if the fee or tax has not been paid in full for said quarterly period, be responsible for the payment of the fee or tax for that portion of the quarterly period during which he carries on such business. [Ord. 2139 § 1, 2006; 1956 Code § 5-209.]
5.04.130 Information deemed private.
The application and returns made to the City pursuant to this chapter shall not be made public, nor shall they be subject to the inspection of any person except the City Manager, or his authorized agent, and the City Council. It is unlawful for any person to make public or to inform any other person as to the contents or any information contained in or to permit inspection of any application or return except as authorized in this section. [Ord. 2139 § 1, 2006; 1956 Code § 5-210.]
5.04.140 Correction of errors.
If the City, 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 City shall refund the amount overpaid by treasurer’s check upon the current expense fund. If the City finds that the fee or tax is less than required, it shall mail a statement to the taxpayer showing the balance due, who shall within three days pay the amount shown thereon. [Ord. 2139 § 1, 2006; 1956 Code § 5-211.]
5.04.150 Determination by City of amount due.
If any taxpayer fails, neglects, or refuses to make his return as and when required in this chapter, the City Manager or his designee is authorized to determine the amount of tax payable and by mail to notify such taxpayer of the amount so determined. The amount so fixed shall thereupon become the tax and be immediately due and payable. [Ord. 2139 § 1, 2006; 1956 Code § 5-212.]
5.04.160 Prohibited acts.
It is unlawful for any person liable to the tax under this chapter to fail or refuse to secure the license, to make the returns as when required, or to pay the fee or tax when due; for any person to make any false or fraudulent application or return or any false statement or return or any false statement or representation in or in connection with any such application or return; or to aid or abet another in an 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 thereto; 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. 2139 § 1, 2006; 1956 Code § 5-213.]
5.04.170 Tax additional to other taxes or fees – Exception.
The license fee or tax levied under this chapter shall be additional to any license or tax imposed or levied under any law or any other ordinance of the City; except, that any public service utility taxable under the terms of this chapter, which utility pays a franchise fee pursuant to the term of any franchise granted to it by the City, may deduct from the tax payable under the terms of this chapter the amount paid as a franchise fee or charge payable under the ordinance granting such franchise. [Ord. 2139 § 1, 2006; 1956 Code § 5-214.]
5.04.180 Tax deemed debt to City – Collection authority.
Any license fee or tax due and unpaid under this chapter and all penalties thereon, shall constitute a debt to the City and may be collected by court proceedings in the same manner as any other debt in like amount, which remedy shall be in addition to all other existing remedies. [Ord. 2139 § 1, 2006; 1956 Code § 5-215.]
5.04.190 Appeals – Subpoena power.
A. Any taxpayer aggrieved by the amount of the fee or tax found by the City 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 five days from the time such taxpayer was given notice of such amount. The Clerk shall, as soon as practicable, fix a time and place for the hearing of such appeal which time shall be not more than 30 days after the filing of the notice of appeal, and he shall cause a notice of the time and place thereof to be mailed to the appellant. At such hearing the taxpayer shall be entitled to be heard and to introduce evidence in his 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 thereof by mail, which amount, together with costs of the appeal, if the appellant is unsuccessful therein, must be paid within three days after such notice is given.
B. The Mayor may, by subpoena, require the attendance thereat of any person and may also require him to produce any pertinent books or records. Any person served with such subpoena shall appear at the time and place therein stated and produce the books and records required, if any, and shall testify truthfully under oath administered by the chairman in charge of the matter required of him pertinent to the appeal, and it shall be unlawful for him to fail or refuse to do so. [Ord. 2139 § 1, 2006; 1956 Code § 5-218.]
5.04.200 Liability of City departments for taxes.
Whenever the City, through any department or division, shall engage in any business activity which if engaged in by any person would, under this chapter, require an occupation license and the payment of a license fee or tax by such person, the City department or division engaging in such business activity shall, as to such business activity, at the same time and in the same manner as persons are required under this chapter, make returns and, from the funds of such department or division, pay the fees or taxes imposed under this chapter. Each of said departments or divisions of the City shall transfer or pass on to its consumers the tax; provided, however, that the City shall not be required to obtain an occupation license. [Ord. 2139 § 1, 2006; 1956 Code § 5-219.]