Chapter 3.37 OCCUPATION TAX*

A. “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, derived from business activities conducted within the corporate limits of the city (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, or 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; provided, however, that only the gross income attributed to those taxable services or commodities as are specifically set forth in TMC 3.37.030(A) and (B) shall be subject to the tax provided herein and any taxpayer deriving income from the sale of any other tangible property or services and receipts not so specifically set forth in TMC 3.37.030 may exclude said income from gross income as herein defined.

B. “Person” or “persons” means persons of either sex, firms, copartnerships, corporations, public utility districts, public or private utilities, water companies or districts, and other associations, whether acting by themselves or by servants, agents or employees.

C. “Taxpayer” means any person liable to the license fee or tax imposed by this chapter.

D. “Tax year” or “taxable year” means the year commencing January 1st and ending on the last day of December of the same year when permission is obtained from the finance director/city clerk to use the same as the tax period. (Ord. 2005-2 § 1, 2005).

3.37.030 Tax levy for certain businesses.

From and after January 1, 1986, and for each succeeding year, there is levied upon, and there shall be collected from every person, firm or corporation engaged in carrying on the following business for hire or for sale of a commodity of service within or partly within the corporate limits of the city the tax specified for each respective year at the rate set forth in subsection E of this section (herein referred as “the specified rate”) for the privilege of so doing business as hereinafter defined:

A. Upon any telephone business there shall be levied a tax equal to the specified rate of the total gross operating revenues, including 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.

“Telephone business” means the business providing access to a local telephone network, local telephone network switching service, toll service, cellular telephone 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 in exchange. “Telephone business” does not include the providing of competitive telephone service nor the providing of cable television service.

“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. This includes cellular mobile service. The definition of “cellular mobile service” includes other wireless radio communications services such as specialized mobile radio, personal communications services, and any other evolving wireless radio communications technology which accomplishes a purpose similar to cellular mobile service.

“Competitive telephone service” means the providing by any person of telephone equipment, apparatus, or service other than toll service, which is a type which can be provided by persons that are not subject to regulations as telephone companies under RCW Title 80 and for which a separate charge is made.

The tax rate set forth above shall include the franchise fee as provided in the franchise agreement with the telephone utility.

B. There is levied a tax on the sale, delivery or distribution of electricity and electrical energy and for the privilege of carrying on said business, such tax to be equal to the specified rate of the total gross operating revenue derived from sales of such electricity to ultimate users within the city; provided, however, that there shall not be any tax levied for the installation charges of electrical units.

The tax rate set forth above shall include the franchise fee as provided in the franchise agreement with the electrical utility.

C. There is levied a tax on the sale of natural, manufactured or mixed gas for residential, commercial or industrial consumption and for the privilege of carrying on said business, such tax to be equal to the specified rate of gross operating revenues from such sales of natural, manufactured or mixed gas within the limits of the city.

The tax rate set forth above shall include the franchise fee as provided in the franchise agreement with the natural gas utility.

D. There shall be levied a tax on the sale, delivery or distribution of cable television picture or signal and for the privilege of carrying on said business, such tax to be equal to the specified rate of the total gross operating revenues derived from the sale of such cable signal to ultimate users within the city; provided, that there shall not be any tax levied for the installation charges for cable service.

E. The rate of tax upon telephone business, the sale, delivery or distribution of electricity or electrical energy and for the privilege of carrying on said business, and on the sale of natural, manufactured or mixed gas for residential, commercial or industrial consumption and for the privilege of carrying on said business shall be eight and one-half percent, commencing from the first day of August, 1995. The rate of tax on the sale, delivery or distribution of cable television pictures or signals and for the privilege of carrying on said business shall be six percent.

F. That portion of the tax imposed by this chapter representing the excess over the tax rate of six percent, which is collected upon telephone, electrical or natural gas business conducted during the period commencing from the first day of August, 1995, shall be allocated for use solely for police department purposes. (Ord. 2005-2 § 1, 2005).

3.37.040 Payment of tax – Quarterly installments.

The tax imposed by this chapter shall be due and payable in quarterly installments unless monthly payments are permitted by the finance director/city clerk and remittance shall be made on or before the thirtieth day of the month next succeeding the end of the quarterly period in which the tax accrued. Such quarterly periods are as follows:

First quarter: January, February, March.

Second quarter: April, May, June.

Third quarter: July, August, September.

Fourth quarter: October, November, December.

The first payment made hereunder shall be made by April 30th for the three-month period ending March 31, 1982. On or before said due date, the taxpayer shall file with the finance director/city clerk a written return, upon such form and setting forth such information as the finance director/city clerk shall reasonably require, together with the payment of the amount of the tax. (Ord. 2005-2 § 1, 2005).

3.37.050 Computation of tax – Deduction of 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 which the city is prohibited from taxing under the Constitutions of the United States or the state;

C. Amounts derived by the taxpayer from the city of Toppenish. (Ord. 2005-2 § 1, 2005).

3.37.060 Recordkeeping – Inspection.

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 finance director/city clerk, or his duly authorized subordinates, for verification of the tax returns or for the fixing of the tax of a taxpayer who shall fail to make such returns. (Ord. 2005-2 § 1, 2005).

3.37.070 Failure to pay tax – Penalty – Collection.

If any person, firm or corporation subject to this chapter shall fail to pay any tax required by this chapter within 30 days after the due date thereof, there shall be added to such tax a penalty of 16 percent of the amount of such tax, and any tax due under this chapter and unpaid, and all penalties thereon, shall constitute a debt to the city and may be collected by court proceedings, which remedy shall be in addition to all other remedies. (Ord. 2005-2 § 1, 2005).

3.37.080 Credits or refunds.

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 request of the taxpayer, be credited against any tax due or to become due from such taxpayer under this chapter, or, upon the taxpayer’s ceasing to do business in the city, be refunded to the taxpayer. (Ord. 2005-2 § 1, 2005).

3.37.090 Annexations.

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. 2005-2 § 1, 2005).

3.37.100 Finance director/city clerk’s authority to adopt and enforce regulations.

The finance director/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. 2005-2 § 1, 2005).

3.37.110 Business license – Required.

A. No person subject to the payment of the tax provided herein 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 to do so, as required by TMC Title 5. The fee for the license required under TMC Title 5 shall be in addition to the tax imposed by this chapter. Such license shall be obtained, issued and maintained pursuant to the provisions of TMC Title 5.

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 finance director/city clerk deems 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. 2005-2 § 1, 2005).

3.37.120 Business license – Fee – Records.

The license fee or tax payable thereunder shall, at the time of the return being required to be filed hereunder, be paid to the finance director/city clerk 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 finance director/city clerk be an acquittance or discharge of the tax or fee due unless the amount of payment is in full and the actual amount due.

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 five years such books and records as will accurately reflect the amount of his gross income as defined herein 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 herein shall be open for examination at all reasonable times by the finance director/city clerk or his duly authorized agent. (Ord. 2005-2 § 1, 2005).

3.37.130 Sale or transfer of business.

Upon the sale or transfer during a quarterly period of a business on 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 the 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. 2005-2 § 1, 2005).

3.37.140 Applications and returns not to be made public.

The application and returns made to the finance director/city clerk pursuant to this chapter shall not be made public, nor shall they be subject to the inspection of any person except the city manager, city attorney, finance director/city clerk or his duly authorized agent, and members of the city council; and it is unlawful for any person to make public or to inform any other person as to the contents of any information contained in or to permit inspection of any application or return except as authorized in this section. (Ord. 2005-2 § 1, 2005).

3.37.150 Refunds – Underpayment.

If the finance director/city clerk 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, he shall refund the amount overpaid by a warrant upon the current expense fund. If the finance director/city clerk finds that the fee or tax is less than required, he shall mail a statement to the taxpayer showing the balance due, who shall within seven days pay the amount shown thereon. (Ord. 2005-2 § 1, 2005).

3.37.160 Notice of underpayment.

If any taxpayer fails, neglects or refuses to make his return as and when required herein, the finance director/city clerk 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. 2005-2 § 1, 2005).

3.37.170 Unlawful acts.

It is unlawful for any person liable to tax hereunder to fail or refuse to secure the license, to make the returns as and when required, or to pay the fee or tax when due, or for any person to make any false or fraudulent application 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 a subpoena issued pursuant hereto, 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. 2005-2 § 1, 2005).

3.37.180 License fee and tax to be additional to others.

The license fee and tax herein levied shall be additional to any license or tax imposed or levied under any law or any other ordinance of the city. (Ord. 2005-2 § 1, 2005).

3.37.190 Collection of unpaid fee or tax.

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. 2005-2 § 1, 2005).

3.37.200 Appeal.

Any taxpayer aggrieved by the amount of the fee or tax found by the finance director/city clerk 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 finance director/city clerk within five days from the time such taxpayer was given notice of such amount. The clerk-treasurer shall, as soon as practicable, fix a time and place for the hearing of such appeal, which time shall be not more than 10 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 finance director/city clerk shall immediately notify the appellant thereof by mail, which amount, together with costs of the appeal, if appellant is unsuccessful therein, must be paid within three days after such notice is given.

The city manager 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 is unlawful for him to fail or refuse to do so. (Ord. 2005-2 § 1, 2005).

3.37.210 Violation – Penalty.

Any person violating or failing to comply with any of the provisions of this chapter or any lawful rule or regulation adopted by the finance director/city clerk pursuant thereto, upon conviction thereof, shall be punished by a fine in any sum not to exceed $100.00 or by imprisonment in the city jail for a term not exceeding 30 days, or by both such fine and imprisonment.

Any taxpayer who engages in or carries on any business subject to a tax hereunder without having his occupation license to do so is guilty of a violation of this chapter for each day during which the business is so engaged in or carried on; and any taxpayer who fails or refuses to pay the license fee or tax, or any part thereof, on or before the due date, shall be deemed to be operating without having his license to do so. (Ord. 2005-2 § 1, 2005).

3.37.220 Severability.

The invalidity or unconstitutionality of any provision or section of the ordinance codified in this chapter shall not render any other provision or section of the ordinance codified in this chapter invalid or unconstitutional. (Ord. 2005-2 § 1, 2005).