Chapter 3.70
UTILITY TAX

Sections:

3.70.010    Utility tax.

3.70.020    Use and accountability of tax proceeds.

3.70.030    Definitions.

3.70.040    Occupations subject to tax – Amount.

3.70.050    Tax year.

3.70.060    Exceptions and deductions.

3.70.070    Monthly installments.

3.70.080    Taxpayer’s records.

3.70.090    Failure to make returns or to pay the tax in full.

3.70.100    Penalty for delinquent payment.

3.70.110    Overpayment of tax.

3.70.120    Noncompliance – Penalty.

3.70.130    Appeal.

3.70.140    Finance Director to make rules.

3.70.150    Tax rebate.

3.70.010 Utility tax.

The tax provided for in this chapter shall be known as the “utility tax,” and is levied upon the privilege of conducting an electric energy, natural or manufactured gas, solid waste, surface water management, telephone, or cable television business within the City of Covington effective February 1, 2008. (Ord. 16-07 § 1)

3.70.020 Use and accountability of tax proceeds.

All revenues collected pursuant to this chapter shall be deposited into the specific funds as referenced herein, and shall be used for the funding of City services or capital requirements as the Council shall direct through its annual budget process and as are authorized by the respective funds. (Ord. 16-07 § 1)

3.70.030 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.

(1) “Cable television services” means the transmission of video programming and associated non-video signals to subscribers together with subscriber interaction, if any, which is provided in connection with video programming.

(2) “Cellular telephone service” means any two-way voice and data telephone or similar communications system based in whole or in substantial part on wireless radio communications, including cellular mobile service, and which is not subject to regulation by the Washington State Utilities and Transportation Commission. Cellular mobile service includes other wireless radio communications services including specialized mobile radio, personal communications services, and any other evolving wireless radio communications technology that accomplishes a purpose substantially similar to cellular mobile service. Cellular telephone service is included within the definition of “telephone business” for the purposes of this chapter.

(3) “Competitive telephone service” means the providing by any person of telecommunications equipment or apparatus, directory advertising and lease of telephone street directories, or service related to that equipment or apparatus such as repair or maintenance service, if the equipment or apparatus is of a type which may be provided by persons not subject to regulation as telephone companies under RCW Title 80, and for which a separate charge is made. Transmission of communication through cellular telephones is classified as “telephone business” rather than “competitive telephone service.”

(4) “Finance Director” means the Finance Director of the City of Covington, Washington, or his or her designee.

(5) “Gas distribution business” means the business of operating a plant or system of the production or distribution for hire or sale and/or for the wheeling of gas, whether manufactured or natural.

(6) “Gross income” means the value proceeding or accruing from the performance of the particular business involved, including gross proceeds of sales, compensation for the rendition of services, and receipts (including all sums earned or charged, whether received or not) by reason of investment in the business engaged in (excluding rentals, 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 evidences of indebtedness, or stocks and the like), all without any deduction on account of the cost of property sold, the cost of materials used, labor costs, taxes, interest or discount paid, delivery costs or any expenses whatsoever, and without any deduction on account of losses.

(7) “Light and power business” means the business of operating a plant or system for the generation, production or distribution of electrical energy for hire or sale and/or for the wheeling of electricity for others.

(8) “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. “Pager service” is included within the definition of “telephone business” for the purposes of this chapter.

(9) “Person” means any person, firm, corporation, association, or entity of any type engaged in a business subject to taxation under this chapter.

(10) “Solid waste” 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 waste, abandoned vehicles or parts thereof, and recyclable materials.

(11) “Solid waste collection business” means every person who receives solid waste or recyclable materials 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.

(12) “Surface water management service” means those services provided by the City of Covington or any business that includes, but is not limited to, basin planning, facilities maintenance, surface water run-off regulation, drainage investigation and enforcement, aquatic resource restoration, surface and storm water quality and environmental monitoring, natural surface water drainage system planning, and surface water facility design and construction.

(13) “Telephone business” means the business of providing access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, or providing telephonic, video, data, pager or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. The term includes cooperative or farmer line telephone companies or associations operating an exchange. “Telephone business” does not include the providing of competitive telephone service or cable television service, or other providing of broadcast services by radio or television stations. (Ord. 16-07 § 1)

3.70.040 Occupations subject to tax – Amount.

(1) Light and Power (Electricity). There is levied upon and shall be collected from every person engaged or carrying on the sale, delivery, or distribution of a light and power business in the City of Covington a tax equal to six percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due.

(2) Telephone. There is levied upon and shall be collected from every person engaged in or carrying on a telephone business in the City of Covington a tax equal to six percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due.

(3) Gas. There is levied upon and shall be collected from every person engaged in or carrying on a gas distribution business in the City of Covington a tax equal to six percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due.

(4) Solid Waste. There is levied upon and shall be collected from every person engaged in or carrying on a solid waste collection service in the City of Covington a tax equal to eight percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due.

(5) Cable Television. There is levied upon and shall be collected from every person engaged in or carrying on a cable television service in the City of Covington a tax equal to eight percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due.

(6) Surface Water Management. There is levied upon and shall be collected from every person engaged in or carrying on a surface water management service in the City of Covington a tax equal to eight percent of the total gross income derived from the operation of such business in the City during the period for which the tax is due. (Ord. 13-15 § 1; Ord. 08-12 § 1; Ord. 14-11 § 1; Ord. 16-07 § 1)

3.70.050 Tax year.

The tax year for purposes of this utility tax shall commence February 1, 2008, and end December 31, 2008, and thereafter shall commence on January 1st and end on December 31st each year. (Ord. 16-07 § 1)

3.70.060 Exceptions and deductions.

There is excepted and deducted from the total gross income upon which the tax is computed:

(1) That part of the total gross income derived from business which the City is prohibited from taxing under the constitution or laws of the United States and the constitution or laws of the State of Washington.

(2) Income derived from that portion of network telephone service, as defined in RCW 82.04.065, which represents 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; or charges for network telephone service that is purchased for the purpose of resale.

(3) 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.

(4) Cash discounts allowed and actually granted to customers of the taxpayer during the tax year.

(5) Uncollectible debts written off the taxpayer’s books during the tax year. If subsequently collected, the income shall be reported for the period in which collected. (Ord. 16-07 § 1)

3.70.070 Monthly installments.

The tax imposed by CMC 3.70.040 shall be due and payable in monthly installments, and remittance therefor shall be made on or before the last day of the month following the end of the monthly period in which the tax is accrued. Quarterly returns may be allowed upon agreement of a quarterly payment schedule and written approval from the Finance Director. Annual returns for smaller entities may be allowed upon written approval from the Finance Director. On or before said due date, the taxpayer shall file with the Finance Director a written return upon such form and setting forth such information as the Finance Director shall reasonably require relating to the accurate computation and collection of this tax, together with the payment of the amount. (Ord. 12-08 § 1; Ord. 16-07 § 1)

3.70.080 Taxpayer’s records.

Each taxpayer shall keep records reflecting the amount of the taxpayer’s gross income on sales and services within the City, and such records shall be open at all reasonable times for the inspection of the Finance Director to verify information provided on any utility tax return, or to determine whether such return is required to be filed. (Ord. 16-07 § 1)

3.70.090 Failure to make returns or to pay the tax in full.

If a taxpayer fails, neglects, or refuses to make his return as and when required by this chapter, the Finance Director is authorized to determine the amount of the tax payable under provisions of CMC 3.70.040, and to notify such taxpayer of the amount so determined. The amount so fixed shall thereupon be the tax and be immediately due and payable, together with penalty and interest. Delinquent taxes, including any penalties, are subject to an interest charge of 12 percent per year on the unpaid balance from the date any such taxes became due as provided in CMC 3.70.070. (Ord. 16-07 § 1)

3.70.100 Penalty for delinquent payment.

If a person subject to this tax fails to pay any tax required by this chapter within 15 days after the due date thereof, there shall be added to such tax a late charge of 10 percent of the amount of such tax. Any tax due under this chapter that is 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. 16-07 § 1)

3.70.110 Overpayment of tax.

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 discovery, be credited against any tax due or to become due from such taxpayer hereunder; provided, however, that overpayments extending beyond one year prior to notification of the City shall not be refunded. If such taxpayer has ceased doing business in the City, any such overpayment shall be refunded to the taxpayer. (Ord. 16-07 § 1)

3.70.120 Noncompliance – Penalty.

(1) No person subject to this chapter shall fail or refuse to file tax returns or to pay tax when due, nor shall any person make a false statement or representation in, or in connection with, any such tax return, or otherwise violate or refuse to comply with this chapter or with any rule promulgated pursuant to CMC 3.70.140.

(2) In addition to the interest and late charges set forth in CMC 3.70.100, a willful violation of or failure to comply with this chapter is a civil infraction, subject to a fine of up to $250.00 for each day that a violation continues. (Ord. 16-07 § 1)

3.70.130 Appeal.

A taxpayer aggrieved by the amount of the tax, penalties, interest, or civil infraction fine determined to be due by the Finance Director, under the provisions of this chapter, may appeal such determination to the City of Covington City Manager or his or her designee. Such an appeal must be submitted in writing to the City Clerk within 20 days of the decision made by the Finance Director. The City Manager or his or her designee will issue a decision in writing within 30 days of receiving a written appeal. The decision of the City Manager may be appealed to the Hearing Examiner pursuant to the process outlined in Chapter 14.45 CMC. (Ord. 01-09 § 5; Ord. 16-07 § 1)

3.70.140 Finance Director to make rules.

The Finance Director shall have the power to adopt and enforce rules and regulations not inconsistent with this chapter or with the law for the purposes of carrying out the provisions thereof. (Ord. 16-07 § 1)

3.70.150 Tax rebate.

There is hereby granted to persons who meet the qualifications and requirements of subsections (1) and (2) of this section relief from the City utility tax as follows:

For all utility bills billed to and paid by the person directly during a calendar year for utility service charges from any utility company who is subject to the utility tax of the City, the City shall pay to such person a reimbursement in an amount equal to the utility tax which was applied to such bills.

(1) To qualify for the relief set forth above, a person must be requesting reimbursement for the amount of City utility taxes imposed during the previous calendar year and must:

(a) Be 65 years of age or older at all times during any period for which reimbursement is requested, and meet the criteria of subsection (1)(c) of this section; or

(b) Be disabled and unable to work, as defined under RCW 84.36.381 and WAC 458-16A-130 as they currently exist or are hereafter amended; and

(c) Have a combined income during the calendar year, or part thereof, for which a reimbursement is requested from all sources whatsoever, not exceeding the low income guidelines for the King County area as published by the Secretary of Housing and Urban Development. As used in this subsection, “income” means:

(i) “Combined disposable income,” as that term is defined in RCW 84.36.383, as it may be amended or replaced from time to time; and

(ii) The aggregate value of gifts and receipts received from all sources during the calendar year for which a reimbursement is requested; and

(d) Have been a resident of the dwelling unit within the City at all times during any period for which a reimbursement is requested, and have made the payment of City utility taxes from his or her income or resources.

(2) Claim Filing Procedures.

(a) All claims for relief under this section must be made annually and filed by April 30th of the calendar year following the calendar year, or portion thereof, for which a “reimbursement” is requested; and

(b) All bills for which claim is made under this section shall be submitted to the Director as part of the claim for relief; and

(c) All claims for relief shall be submitted in writing on forms provided by the Director and certified by the claimant that, under the penalty of perjury, all information provided in the claim is true and correct; and

(d) The Director may require documents deemed necessary to establish proper proof of income level and/or disability status of the claimant, including, but not limited to, the two most recent months’ bank statements, two most recent years’ income tax statements, and a current physician’s statement or supplemental security income award letter. (Ord. 07-08 § 1; Ord. 16-07 § 1)