Chapter 5.44
OCCUPATION TAX

Sections:

5.44.010    Purpose and effect.

5.44.020    Definitions.

5.44.030    Required — Violation.

5.44.040    Monthly periods.

5.44.050    Occupations subject — Rate.

5.44.060    Return required — Due dates and payment.

5.44.070    Payment procedure.

5.44.080    More than one business.

5.44.090    Failure to pay — Violation.

5.44.100    Exceptions and deductions.

5.44.105    Allocation of income — Cellular telephone service.

5.44.110    Books and records required — Returns confidential.

5.44.120    Investigation and audit regarding tax liability.

5.44.130    Overpayment or deficiency.

5.44.140    Failure to file return.

5.44.150    Sale of business.

5.44.160    Failure to comply, unlawful acts.

5.44.170    Not exclusive.

5.44.180    Penalty for late payment — Interest.

5.44.190    Debt to city when unpaid.

5.44.195    Rate change.

5.44.200    Rules and regulations.

5.44.210    Appeals.

5.44.220    Penalty.

5.44.010 Purpose and effect.

The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue and to levy a tax on utilities pursuant to the laws of the state of Washington. (Ord. 505 § 1, 1969).

5.44.020 Definitions.

* Unless the context clearly indicates otherwise, the words, phrases and terms used in this chapter shall have the following meanings:

(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 investment of capital in the business engaged in (including rentals, royalties, 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, cost of materials used, labor costs, taxes, interest or discount paid, or any expenses whatsoever, and without any deduction on account of losses. Further deductions and exceptions from gross income upon which the fee or tax described in this chapter is computed are set forth in Section 5.44.100.

(b) “Person or persons” means persons of either sex, firms, copartnerships, corporations, public utility districts, municipal corporations or departments thereof, public or private utilities, and other associations, whether acting by themselves or by servants, agents or employees.

(c) “Taxpayer” means any person liable for the license fee or tax imposed by this chapter.

(d) “Tax year or taxable year” means the year commencing January 1st and ending on December 31st, of such 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, or in lieu thereof, commencing December 15th and ending December 14th of the next following calendar year when permission is obtained from the City Clerk to use the period as the tax year.

(e) “Telephone business” means the providing by any person of access to a telephone network, 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 telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. It includes cooperative or farmer line telephone companies or associations operating an exchange. It also includes the provision of transmission to and from the site of an internet provider via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. Telephone business 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, 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.

(f) “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 Title 80 RCW and for which a separate charge is made.

(g) “Cellular telephone service” means 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 such 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. (Ord. 2239 § 2, 2004; Ord. 1820 § 1, 1995; Ord. 1646 § 1, 1991; Ord. 1009 § 1, 1981: Ord. 505 § 2, 1969).

*Code reviser’s note: The provisions of Ordinance 2239 shall take effect and be in full force on February 1, 2005.

5.44.030 Required — Violation.

On and after January 1, 1970, no person subject to the payment of the tax provided herein shall engage in any business, occupation or activity in the city without first having obtained and being the holder of a valid and existing license so to do, to be known as an “occupation license” for which the applicant shall pay the sum of ten dollars. Such “occupation license” shall expire at the end of the calendar year in which it is issued and a new license shall be required for each calendar year, unless the taxpayer is transacting his or its business on a fiscal year and not on a calendar year and with the consent of the City Clerk, obtains his or its license for the period of his or its current fiscal year which shall be deemed the tax year for such taxpayer.

Application for an “occupation license” shall be made to the City Clerk who shall provide the forms therefor and shall issue the license upon payment of the license fee. There shall be no prorate of license fee for an applicant who makes application for part of any year or period.

Any person engaging in or carrying on more than one such business, occupation, pursuit or privilege within the city shall make application for and procure an “occupation license” for each of the same.

Each “occupation 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 be conspicuously posted in the place of business for which it is issued at all times. Such license shall be personal and nontransferable.

No person to whom an “occupation 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.

Any taxpayer who engages in or carries on any business subject to tax hereunder without having an “occupation license” so to do shall be guilty of a violation of this chapter for each day during which the business is so engaged in or carried on and the taxpayer who fails or refuses to pay the license fee or tax on any part thereof on or before the due date shall be deemed to be operating without having his license so to do. (Ord. 505 § 3, 1969).

5.44.040 Monthly periods.

On and after January 1, 1982, there is levied upon and shall be collected from, and paid by as hereinafter provided, every person on account of transacting, carrying on, or engaging in such business activities within the city limits as are described in Section 5.44.050, an occupation tax (sometimes herein referred to as “tax”) against the gross monthly income of the business. (Ord. 997 § 1, 1981: Ord. 505 § 4, 1969).

5.44.050 Occupations subject — Rate.

There are levied and shall be collected annual license fees and occupation taxes against the persons designated on account of the business activities, and in the amounts to be determined by the application of the respective rates against gross income as follows:

(a) Telephone Business. Upon every person engaged in or carrying on any telephone business within the city, a fee or tax equal to six percent of the total gross income, including revenues from intrastate long distance toll service, from such business in the city during the current calendar year for which a license is required.

(b) Electric Light and Power. Upon every person engaged in or carrying on the business of furnishing electric light and power within the city, a fee or tax equal to six percent of the total gross income from such business in the city during the current calendar year for which a license is required.

(c) Natural or Manufactured Gas. Upon every person engaged in or carrying on the business of transmitting, distributing, selling and  furnishing  natural and/or manufactured gas, a tax equal to six percent of the total gross income from such business derived from the sale of gas within the city during the calendar year for which a license is required. (Ord. 2281 § 1, 2006; Ord. 2239 § 1, 2004; Ord. 1923 § 1, 1996; Ord. 1867 § 1, 1995; Ord. 1221 § 1, 1984: Ord. 1048 § 1, 1982: Ord. 1009 § 2, 1981: Ord. 505 § 5, 1969).

5.44.060 Return required — Due dates and payment.

The tax imposed by this chapter, except the annual license fee required to accompany the application for the occupational license and renewal, shall be due and payable in monthly installments. The remittance shall be made as hereinafter provided and shall be accompanied by a return on a form to be provided and prescribed by the City Clerk. The return and remittance shall be in the City Clerk’s office by 5:00 p.m. Pacific time, on or before the last day of each month succeeding the end of the month in which the tax accrued. The taxpayer shall be required to swear or affirm in writing on the return that the information therein given is full and true and that the taxpayer knows it to be so. Whenever the total tax for which any person is liable under this chapter does not exceed the sum of $15.00 for any monthly period, an annual return may be made upon written request and subject to the approval of the City Clerk.

Whenever a taxpayer commences to engage in business during any monthly period, his or her first return and tax shall be based upon and cover the portion of the month during which he or she engaged in business. (Ord. 1690 § 1 (part), 1992: Ord. 997 § 2, 1981: Ord. 505 § 6, 1969).

5.44.070 Payment procedure.

The tax shall be paid at the time the tax return is filed with the City Clerk to the City Treasurer 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 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 Treasurer be an acquittance or discharge of the tax due unless the amount of payment is in full and is the actual amount due. (Ord. 505 § 7, 1969).

5.44.080 More than one business.

Any person engaged in, or carrying on more than one such business, occupation, pursuit, or privilege shall pay the tax so imposed separately for each of the same. (Ord. 505 § 8, 1969).

5.44.090 Failure to pay — Violation.

Any taxpayer who engages in, or carries on, any business subject to the tax hereunder, and 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. 505 § 9, 1969).

5.44.100 Exceptions and deductions.

A. There shall be excepted and deducted from the total gross income upon which the license fee or tax is computed the following:

(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, or for access to, or charges for, interstate 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) There shall be excepted and deducted from the total gross income upon which the tax is computed all cash discounts allowed and actually granted to customers of the taxpayer during the tax year.

(5) So much thereof as is derived from the transactions in interstate or foreign commerce, or from business done for the government of the United States, its officers or agents in their official capacity, and any amount paid by the taxpayer to the United States, the state of Washington, as excise taxes levied or imposed on the sale or distribution of property or service.

B. There shall be excepted and deducted from the total gross income upon which the 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 they have been written off the books of the taxpayer. In the event debts are subsequently collected, the income shall be reported in the return for the quarter in which the debts are collected and at the rate prevailing in the tax year when collected.

C. Nothing in this chapter shall be construed as requiring a license, or the 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. 1820 § 2, 1995: Ord. 1564 § 1 (part), 1990: Ord. 505 § 10, 1969).

5.44.105 Allocation of income — Cellular telephone service.

A. 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.

B. 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.

C. 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.

D. Dispute Resolution. If there is a dispute between or among the city and one or more other cities, 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 and the other city or cities by submitting the issue for settlement to the Association of Washington Cities (AWC). Once the 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 on the disputed revenues so long as it changes its billing records for future revenues to comport with the settlement facilitated by AWC. (Ord. 1820 § 3, 1995).

5.44.110 Books and records required — Returns confidential.

It shall be the duty of each taxpayer taxed upon his/her or its gross income to keep and enter in a proper book or set of books or records an account which shall accurately reflect the amount of his/her or its gross income, which account shall always be open at the principal place of business to the inspection of the City Clerk, or the Clerk’s duly authorized agent, and from which the officer or agent may verify the return made by the taxpayer. Such records shall be preserved for a period of five years.

The City Clerk, or the Clerk’s duly authorized agent, shall not publicly reveal any facts or information contained in any return filed by any taxpayer or disclosed in any investigation or examination of the taxpayer’s books and records, provided, the City Clerk, or the Clerk’s duly authorized agent, can disclose such information pursuant to those exceptions authorized under state law, RCW 82.32.330 and 42.17.310(1)(C). (Ord. 1482 § 1, 1989: Ord. 505 § 11, 1969).

5.44.120 Investigation and audit regarding tax liability.

If any taxpayer fails to apply for an “occupation license” or make a return as required hereunder, or if the City Clerk is dissatisfied as to the correctness of the statements made in the application or return of any taxpayer, the Clerk or authorized agent may enter the premises of such taxpayer at any reasonable time for the purpose of inspecting his or its books or records of account to ascertain the amount of the fee or tax or to determine the correctness of such statements, as the case may be, and may examine any person under oath administered by the Clerk or his agent, touching the matters inquired into, or the Clerk or his agent may fix a time and place for an investigation of the correctness of the return and may issue a subpoena to the taxpayer, or any other person, to attend upon such investigation and there testify under oath administered by the Clerk or his agent, in regard to the matters inquired into and may, by subpoena, require him or any person, to bring with him such books, records and papers as may be necessary. (Ord. 505 § 12, 1969).

5.44.130 Overpayment or deficiency.

If the City Clerk upon investigation or upon checking returns finds that the tax paid on any of them is more than the amount required of the taxpayer, he shall refund the amount by a treasurer’s check upon the general fund; provided, that if the taxpayer in all probability will have a tax liability in the ensuing quarter, such overpayment may be held and applied by the Clerk as a credit against the tax to become due. If the Clerk finds that the tax is less than required, he shall mail a statement to the taxpayer showing the balance due, who shall pay the amount shown thereon to the City Treasurer within ten days of the date of the notice. (Ord. 505 § 13, 1969).

5.44.140 Failure to file return.

If any taxpayer fails, neglects or refuses to make his return as and when required hereunder, the City Clerk is authorized and directed 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 unless the taxpayer shall file a true and correct return with full payment within seven days of the date such mail notification is sent. (Ord. 505 § 14, 1969).

5.44.150 Sale of business.

Upon the sale or transfer during a quarterly period of a business or account of which a tax is required, the purchaser or transferee shall, if the tax has not been paid in full for the quarterly period, be responsible for the payment of the tax for that portion of the quarterly period during which he or it carries on such business. (Ord. 505 § 15, 1969).

5.44.160 Failure to comply, unlawful acts.

It is unlawful for any person liable to tax hereunder to fail or refuse to secure the occupation license, to make the returns when required, or to pay the license fee or tax when due, or 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 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. 505 § 16, 1969).

5.44.170 Not exclusive.

The license fee or tax herein levied shall be additional to any license fee or tax imposed or levied under any law or any other ordinance of the city. (Ord. 505 § 17, 1969).

5.44.180 Penalty for late payment — Interest.

For each payment due, if such payment is not made by the due date and time thereof, there shall be added penalties and interest as follows:

A. For each month or portion thereof that the payment is overdue, a penalty of five percent of the tax due shall be imposed, provided, that the total penalty imposed shall not exceed a total of 25 percent.

B. In addition to the penalties imposed, interest on the amount due shall accrue at the rate of eight percent per annum from the date of the delinquency.

The Finance Director is authorized to waive all or any portion of the penalties and interest provided herein in the event that the Director determines that late payment was the result of excusable neglect or extreme hardship. (Ord. 1690 § 1 (part), 1992: Ord. 505 § 18, 1969).

5.44.190 Debt to city when unpaid.

Any license fee or tax due and unpaid under this chapter, and all penalties and interest 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. 505 § 19, 1969).

5.44.195 Rate change.

No change in the rate of tax upon persons engaging in providing cellular telephone service shall apply to business activities occurring before the effective date of the change and, except for a change in the tax rate authorized by RCW 35.21.870, no change in the rate of the tax may take effect sooner than sixty (60) days following the enactment of the ordinance establishing the change. The city shall send to each cellular telephone service company at the address on its license, a copy of any ordinance changing the rate of tax upon cellular telephone service promptly upon its enactment. (Ord. 1820 § 4, 1995).

5.44.200 Rules and regulations.

The City Clerk shall have the power and authority, and it shall be his duty, from time to time to adopt, publish and enforce rules and regulations not inconsistent with this chapter or with law for the purpose of carrying out the provisions thereof, and it is unlawful for any person to violate or fail to comply with any such rule or regulation. (Ord. 505 § 20, 1969).

5.44.210 Appeals.

A. Any taxpayer aggrieved by the amount of the fee or tax determined by the Clerk to be due under the provisions of this chapter may appeal such determination to the City Hearing Examiner.

B. The appeal shall be in writing and shall contain the following:

1. The name and address of the taxpayer;

2. A statement identifying the determination of the Clerk from which the appeal is taken;

3. A statement setting forth the grounds upon which the appeal is taken, and identifying the specific errors the Clerk is alleged to have made in making his or her determination;

4. A statement identifying the requested relief from the determination being appealed.

C. The appeal must be filed with the Clerk within ten (10) days from the date the taxpayer was mailed notice of the Clerk’s decision.

D. The Hearing Examiner shall conduct an appeal hearing, at which the appellant taxpayer and the Clerk shall have the opportunity to be heard and to introduce evidence relevant to the subject of the appeal. The Hearing Examiner shall establish rules for such hearings consistent with the provisions of this section, including rules relating to the issuance and reconsideration of decisions.

E. The appellant taxpayer shall have the burden of proving by the preponderance of the evidence that the determination of the Clerk is erroneous.

F. Appeal proceedings before the Hearing Examiner shall be tape recorded and all exhibits admitted by the Examiner shall be made part of the record.

G. Following the hearing, the Hearing Examiner shall render a decision on the appeal and shall enter written findings and conclusions in support thereof. A copy of the findings, conclusions, and decision shall be mailed to the appellant taxpayer and the Clerk. The decision shall state the correct amount of the tax owing as determined by the Hearing Examiner.

H. The decision of the Hearing Examiner shall be final and conclusive unless the same is appealed to the City Council. Any such appeal must be filed with the Clerk within ten (10) working days of the decision appealed from or any final decision on reconsideration thereof. Any such appeal shall be based solely on the record of the appeal hearing conducted by the Hearing Examiner.

I. Any and all actions seeking judicial review of a City Council decision under this section must be filed in the King County Superior Court within ten (10) calendar days following the date of the decision. Any action not brought within this time limit is barred. (Ord. 1831 § 1, 1995: Ord. 505 § 21, 1969).

5.44.220 Penalty.

Any person violating any of the provisions of this chapter shall, upon conviction thereof, be punished as provided in Section 1.01.110. (Ord. 505 § 22, 1969).