Chapter 5.04
OCCUPATION TAXES
Sections:
5.04.020 Business entity defined.
5.04.030 Place of business – Requirements.
5.04.050 Permit – Term/quarterly renewal.
5.04.060 Permit – Application.
5.04.070 Occupation tax – Required – Amount.
5.04.080 Occupation tax – When due.
5.04.090 Occupation tax – Late payment.
5.04.100 Occupation tax – Determination of number of employees.
5.04.120 Permit – Transferability.
5.04.150 Permit for temporary display of merchandise outside.
5.04.160 Violations – Penalties – Alternative remedies.
5.04.010 Purpose.
The taxes imposed under this chapter shall be in addition to all ad valorem taxes, licenses and excises now or hereafter levied pursuant to law, and shall be in addition to any and all other fees or taxes imposed by the United States Government, or by the state. It is specifically declared that the taxes imposed pursuant to the provisions of this chapter are for the purpose of raising revenues, and that any and all taxes imposed hereby shall be considered reasonable for the purpose of raising revenues. (Ord. 77-10 § 1)
5.04.020 Business entity defined.
A. As used in this chapter, “business entity” means any individual, firm, company, corporation, association or partnership conducting any trade, profession, occupation or pursuit for gain, including property rental, except it does not include the following:
1. Tax-Exempt Organizations. Any organization that has an exemption from income taxes from the Internal Revenue Service and the State of Oregon Department of Revenue;
2. Wholesale Distributors. Any organization that sells a product directly to a business entity for retail and is engaged exclusively in a wholesale business;
3. A business entity regulated by the state, where the state has specifically preempted and precluded the imposition of a business occupation tax by a local government;
4. A business entity located outside of the city of Lincoln City and doing business in Lincoln City only with the city of Lincoln City.
B. Unless exempted under Oregon law, a “business entity” or business entity using an assumed business name must be registered with the Oregon Secretary of State Corporation Division. (Ord. 2019-22 § 1; Ord. 2010-11 § 2; Ord. 91-17 § 1; Ord. 84-4 § 1; Ord. 77-10 § 2(1)(a) – (d))
5.04.030 Place of business – Requirements.
A. Every business entity doing business from a specific location within the corporate limits of the city must operate from a place of business which is within an enclosed building which meets the requirements of all city building, fire and life safety code and LCMC Title 17 standards and all other city ordinances; except that a business with a valid permit for the temporary display and sale of merchandise outside, which permit has been issued pursuant to LCMC 5.04.150, or with a temporary use permit which has been obtained in accordance with LCMC Title 17 requirements, may temporarily display and sell merchandise outside of the building; provided, that all conditions of the temporary permit are followed.
B. Notwithstanding the provisions of subsection (A) of this section, a business entity doing business in the city whose specific business location is outside of the city, which must, by the nature of its work or service, provide its work or service at a location designated by its customer, shall not be required to operate from an enclosed building.
C. Farmers’ Markets.
1. Notwithstanding the provisions of subsection (A) of this section, a business entity or tax-exempt organization doing business in the city as a farmers’ market shall not be required to operate from an enclosed building.
2. For the purposes of this section, the term “farmers’ market” means a public market place, operated not more than two days per week during the growing season, where vendors who have grown, gathered, raised, processed, or caught fresh or processed foods and nursery stock from any county in the state of Oregon sell them directly to the public.
3. A farmers’ market may include vendors of art and handicrafts made in Oregon, and from no further than 100 miles from the corporate limits of Lincoln City, but at least half of the vendors in the market must be vendors principally selling fresh or processed foods and nursery stock. The required 50:50 mix of food/nursery stock vendors and crafters shall be calculated over the term of the market season. Market membership records shall be available for inspection by the city upon request.
4. No reselling of any kind is permitted in a farmers’ market, nor may any used or secondhand items be sold in a farmers’ market.
5. The growing season is considered to run from May 1st to November 30th.
6. A farmers’ market is considered to be a business entity of the type that rents out booths or tables for the purposes of the determination of the number of employees.
7. Farmers’ market vendors are responsible for obtaining all licenses and/or permits required by the Lincoln County public health department and the state of Oregon. Copies of all licenses/permits must be available for inspection at all times when the farmers’ market is operating.
D. Notwithstanding the provisions of subsection (A) of this section, a business entity doing business in the city as a licensed street vendor in an approved location under Chapter 5.28 LCMC shall not be required to operate from an enclosed building.
E. Notwithstanding the provisions of subsection (A) of this section, a business entity doing business in the city as a licensed food truck located on private property in an approved zoning district pursuant to LCMC Title 17 shall not be required to operate from an enclosed building.
F. Notwithstanding the provisions of subsection (A) of this section, a business entity doing business in the city as an approved parks concession vendor pursuant to permit issued under Chapter 12.16 LCMC shall not be required to operate from an enclosed building.
G. Notwithstanding the provisions of subsection (A) of this section, a business entity doing business in the city as an approved special event vendor pursuant to permit issued under Chapter 5.16 LCMC shall not be required to operate from an enclosed building. (Ord. 2019-19 § 1; Ord. 2014-18 § 1; Ord. 2006-05 § 2; Ord. 2005-11 § 2; Ord. 91-17 § 2; Ord. 87-17 § 1; Ord. 82-4 § 13; Ord. 77-10 §§ 2(2), 5(5) – (6))
5.04.040 Permit – Required.
A. Business Occupation Tax Permits Required. It shall be a violation of this chapter for any business entity to conduct, engage in, carry on or practice any trade, profession, occupation or pursuit for gain within the city without first securing an occupation tax permit from the city manager or designate and paying the occupation tax therefor as prescribed in this chapter, except those exempted therefrom in LCMC 5.04.020(B) and (C). A tax-exempt organization shall secure an occupation tax permit, but shall be exempt from payment of the occupation tax.
B. Temporary or Seasonal Permits for the Display of Merchandise Out of Doors Required. It shall be a violation of this chapter for any business entity or tax-exempt organization to display and sell merchandise outside of a building without a valid temporary or seasonal permit for the temporary display of merchandise outside, except street vendors licensed pursuant to Chapter 5.28 LCMC. (Ord. 2001-11 § 2; Ord. 94-04 § 1; Ord. 77-10 § 4(1))
5.04.050 Permit – Term/quarterly renewal.
A. Any permit issued under this chapter shall be for the year commencing upon issuance and continuing for one year from the assigned quarterly renewal date.
B. The finance director will assign each new and existing permit to one of four quarterly renewal dates. The one-year period commencing on the quarterly renewal date is the permit year for corresponding occupation or business. No permit shall be issued for less than one year. For the first year, each permit tax shall be prorated to the assigned renewal date.
C. The city hereby establishes four quarterly renewal dates, as follows:
1. First quarter: January 1st;
2. Second quarter: April 1st;
3. Third quarter: July 1st;
4. Fourth quarter: October 1st. (Ord. 2017-14 § 1; Ord. 77-10 § 4(2))
5.04.060 Permit – Application.
A. Each and every business entity who seeks to do business in the city shall complete an application for an occupation tax permit on a form prepared by the city.
B. There shall be application fee(s) established by council resolution for all new applications and renewals from business entities applying for new or renewed occupation tax permits. Should the application for an occupation tax permit be denied by the city, the fee will not be refunded and will be used to offset the cost of processing the application.
C. A completed permit renewal application and renewal fee shall be due no earlier than 60 days before the assigned quarterly renewal date. The business entity is solely responsible for obtaining and maintaining a valid occupation tax permit. The finance director or designate shall send applications for renewal approximately one month prior to the permit expiration date; and if permit holder is still in business, it shall timely complete the renewal and return with the proper tax and fees due.
D. Any business entity that owes the city any permit tax or application fee, and is delinquent with regards to such moneys, shall not be issued a current occupation tax permit. (Ord. 2017-14 § 2; Ord. 2001-11 § 2; Ord. 91-17 §§ 3, 4; Ord. 77-10 § 5(1) – (4))
5.04.070 Occupation tax – Required – Amount.
All business entities doing business in the city, except those excluded pursuant to LCMC 5.04.020, shall pay the following annual occupation tax:
A. A flat tax rate of $100.00, or such greater amount as established by council resolution for business entities having three workers or less (workers include employees, owners, partners and corporation officers); and
B. An additional tax of $10.00 or such greater amount as established by council resolution for each additional person or employee over three. (Ord. 2017-14 § 3; Ord. 2001-11 § 2; Ord. 91-17 § 5; Ord. 84-4 § 3; Ord. 77-10 § 4(3))
5.04.080 Occupation tax – When due.
The annual occupation tax shall be paid during the 30-day period prior to expiration. The business entity shall procure a permit and pay the tax before commencing business. (Ord. 2017-14 § 4; Ord. 77-10 § 4(4))
5.04.090 Occupation tax – Late payment.
A. In case of late payment of the tax, as provided for in this section, there will be an additional charge for such delinquencies as follows:
1. Month one: five percent of occupation tax;
2. Month two: 10 percent of occupation tax in addition to the five percent penalty imposed in subsection (A)(l) of this section;
3. Month three: The late payment charge will be 15 percent in addition to the five percent and 10 percent penalty imposed in subsections (A)(l) and (2) of this section.
B. In addition to the late payment charge, which is merely a penalty for late payment, any business entity, sole proprietor, partner, executive director or officer of any business entity that is doing business in the city without obtaining an occupation tax permit, or refuses to pay such tax and late charges after 90 days from the renewal date, after it is due, shall be in violation of this chapter and subject to the penalty provisions of LCMC 5.04.160. Each day’s operation of such business shall be considered a separate violation of this chapter. (Ord. 2017-14 § 5; Ord. 91-17 § 6; Ord. 84-4 § 4; Ord. 77-10 § 4(4)(b) – (c))
5.04.100 Occupation tax – Determination of number of employees.
A. The occupation tax imposed by this chapter is a tax on the number of persons employed by any one business entity, no matter how many businesses, business locations or types of businesses are carried on by the one business entity. Only one occupation tax permit is required for each business entity defined in this chapter. However, each business entity must pay a tax based upon the total number of persons employed by it, no matter where those persons are employed, within the city. If the business has multiple business entities or DBAs the business shall pay a processing and printing fee for each additional permit required. The processing and printing fee cost shall be set by resolution of the city council.
B. In arriving at the number of persons carrying on a business, profession, trade, occupation or pursuit for gain, there shall be considered the proprietors or partners thereof and all persons employed in such by said proprietors or partners. The number of persons employed and to be considered for the purposes of the annual occupation tax shall be the monthly average number of persons employed during the prior calendar year. If such is carried on by a corporation, all officers and employees of such corporation who devote the principal part of their time to such business, profession, occupation, trade or pursuit shall be considered. Any business entity doing business in the city, but whose principal place of business is outside the city, shall pay a tax only on those persons employed by it within the city.
C. Where a business entity is of a type that utilizes sales persons or service providers that are associated with the business but not necessarily employees, which business requires the possession and display of a license, an occupation tax of $10.00 (or such greater amount as set by resolution of the city council) per license displayed for each license belonging to an individual who is not an employee shall be imposed in addition to the taxes calculated pursuant to LCMC 5.04.070.
D. Where a business entity is of the type that rents out booths or tables, each such booth or table rented shall be deemed to be the equivalent of two additional employees and each such entity shall pay an annual fee at two times the employee rate per booth or table, in addition to the taxes calculated pursuant to LCMC 5.04.070.
E. In determining the monthly average number of persons employed by a business entity, for purposes of tax calculation, every applicant for a new permit, or for a renewal, must submit, upon request of the finance director, a copy of its State of Oregon Accident Insurance Fund (S.A.I.F.) reports or private insurance carrier reports, for purposes of workers’ compensation, for the prior calendar year. A new business shall declare the number of persons to be actively engaged or employed by the business.
F. The applicant shall allow the city manager or designate to, at any reasonable time and place, inspect the building, premises, books, papers and accounting records of the business entity to determine the number of persons employed and actively engaged in the business conducted by the business entity. (Ord. 2017-14 § 6; Ord. 2001-11 § 2; Ord. 91-17 § 7; Ord. 77-10 § 4(6))
5.04.110 Permit – Issuance.
The city manager or his designate shall issue an occupation tax permit when a proper application has been made and payment of the required tax has been received. Every business entity shall keep and retain such permit and shall post the same in some conspicuous place at the principal place of business in the city, and shall exhibit the same to the city manager or his designate upon demand. (Ord. 2001-11 § 2; Ord. 77-10 § 4(7))
5.04.120 Permit – Transferability.
No transfer or assignment of any permit issued under this chapter shall be valid or permitted, except that whenever any business is sold or transferred in whole for which a permit has been paid, the purchaser thereof shall not be required to obtain another permit for the balance of the calendar year, but will be required to pay an additional tax if the business entity will employ more persons than the prior business entity did in the same business. Nothing contained in this section shall be taken or construed as vesting any right in any permit as a contract obligation on the part of the city, and any tax may be increased or decreased by the city in any and all instances at any time by the city. (Ord. 77-10 § 4(5))
5.04.130 Permit – Revocation.
Any permit issued pursuant to the provisions of this chapter may be revoked by the city after a hearing thereon before the city council and good cause having been shown. Good cause shall have been shown when it appears that the permit holder has violated any provision of this chapter and failed to comply with an order of the municipal court. Good cause shall not, however, be restricted as defined in this section. (Ord. 77-10 § 7)
5.04.140 Liquor licenses.
Any business entity required to have the city’s approval as a condition of its liquor license by the Oregon Liquor Control Commission shall pay a fee with its application in an amount to be set by resolution of the city council. This application fee is a charge to cover the processing of the application and is in addition to the occupation tax required in this chapter. Any business entity required to have a liquor license shall also be subject to the city occupation tax and be required to obtain such a permit. (Ord. 2001-11 § 2; Ord. 88-10 § 1; Ord. 77-10 § 6)
5.04.150 Permit for temporary display of merchandise outside.
A. Temporary Permits.
1. A permit may be issued to a business entity with an existing valid business occupation tax permit or to a tax-exempt organization for the temporary display and sale of merchandise outside to allow the limited display of merchandise which is temporary and does not conflict with the zoning district regulations where such activity is located.
2. Any such temporary permit shall clearly set forth the conditions under which the letter of permit is granted and shall clearly indicate the time period for which the permit is issued. No such temporary permit may be issued for a period in excess of 72 hours and such temporary permit is not transferable to any other business entity.
3. The application fee for such a temporary permit shall be $25.00. Tax-exempt organizations shall be exempt from payment of this fee.
B. Seasonal Permits.
1. A permit may be issued to a business entity or tax-exempt organization for the temporary display and sale of merchandise outside to allow the limited display of merchandise which is seasonal in nature and does not conflict with the zoning district regulations where such activity is located.
2. Seasonal permits shall clearly set forth the conditions under which the letter of permit is granted and shall clearly indicate the time period for which the permit is issued. Such permits can be issued during only the winter season. A winter seasonal permit may be issued for a period of time not to exceed six weeks prior to December 26th of any year. Such seasonal permit is not transferable to any other business entity or tax-exempt organization.
3. The application fee for such a seasonal permit shall be $25.00. Tax-exempt organizations shall be exempt from payment of this fee.
C. Temporary structures, activities or uses may be permitted as necessary to provide for storage and use of supplies and equipment, display of merchandise or to provide for temporary sales offices for uses permitted in the zoning district.
D. Reasonable conditions may be imposed by the city manager, or designate, in connection with approval of the permit for temporary display and sale of merchandise to minimize potential impact of the proposed use to other uses in the vicinity. No temporary or seasonal permits will be issued for display and sale of merchandise on publicly owned property, except for property used by a business entity lessee of publicly owned property in accord with the lease terms, or public right-of-way.
E. No more than two temporary or seasonal permits may be issued to a single business entity within any 12-consecutive-month period of time.
F. Application for a temporary or seasonal permit to display merchandise outside must be made at least five days before the effective date of the permit. (Ord. 2022-19 § 1; Ord. 2001-11 § 2; Ord. 94-04 § 2; Ord. 91-17 § 8; Ord. 84-4 § 2; Ord. 77-10 § 2(1)(d))
5.04.160 Violations – Penalties – Alternative remedies.
A. Violations.
1. Each day that any person conducts any business in violation of the provisions of this chapter shall be deemed a separate offense.
2. Any violation of this chapter is the responsibility not only of the business entity, but also of the partners, executive director, officers and manager.
3. If a business entity is doing business in the city and this chapter is being violated and the business principals are not located in the city, the person doing business shall be responsible for any chapter violations as well as the business entity itself.
B. Penalties. In addition to the monetary late payment charges imposed pursuant to LCMC 5.04.090, any person or business entity that violates any of the provisions of this chapter may be punished under the provisions of the city’s violation ordinance (Chapter 1.16 LCMC). Any violation of this chapter shall be classified as a Class B violation. (Ord. 2015-10 § 5; Ord. 91-17 § 9; Ord. 88-10 § 2; Ord. 77-10 § 8)