Chapter 6.54
BUSINESS AND OCCUPATION TAX

Sections:

6.54.040    Exercise of revenue license power.

6.54.080    Definitions.

6.54.090    Engaging in business.

6.54.100    Business license required.

6.54.120    Persons subject to license fee – Amount.

6.54.160    Business located outside city.

6.54.200    Exemptions.

6.54.260    Application review.

6.54.280    Records to be kept.

6.54.320    Payment of license fees.

6.54.340    Collection of fees.

6.54.360    Overpayment.

6.54.400    Repealed.

6.54.440    Denial, suspension, or revocation of licenses – Appeal to city manager.

6.54.480    Repealed.

6.54.520    Repealed.

6.54.560    False applications, etc.

6.54.600    License fee additional to others.

6.54.640    Tax constitutes debt.

6.54.680    Repealed.

6.54.720    Penalty for violations.

6.54.760    Severability.

6.54.040 Exercise of revenue license power.

The provisions of this chapter shall be deemed an exercise of the power of the city of Ellensburg to license for revenue. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 1, 1958.]

6.54.080 Definitions.

In construing the provisions of this chapter, save when otherwise declared or clearly apparent from the context, the following definitions shall be applied:

“Business” includes all activities, occupations, trades, pursuits or professions located and/or engaged in within the city, with the object of gain, benefit, or advantage to the taxpayer, or to another person or class, directly or indirectly.

“Employee” means any person employed at any business location within the city and/or any person furnishing or performing services within the city, and in addition shall include all persons who are self-employed.

“Person” means any individual, firm, copartnership, company, corporation, association, receiver, assignee, trustee in bankruptcy, trust, estate, joint venture, club, joint stock company, business trust, society, or any group of individuals acting as a unit.

“Solicitor” includes, unless otherwise herein provided, any person who engages in merchandising any goods, wares, commodities, books, periodicals or services or solicits contributions of goods or monies, by going from house to house, place to place or street to street or by telephone.

“Taxpayer” includes any person who engages in business or who is required to have a business license hereunder, or who is liable for any license fee or tax hereunder, or who performs any act for which a license fee or tax is imposed by this chapter.

“Temporary business” includes any person who engages in a business for less than 90 consecutive days within any 12-month period selling and delivering goods, wares and merchandise and who in furtherance of such purpose hires, leases, uses or occupies any building, structure, parking lot or area, motor vehicle, tent, railroad boxcar, public room in hotels, motels, lodging houses, apartments, shops or other fixed location for the exhibition and sale of such goods, wares and merchandise.

“Temporary Kittitas County Fair business” includes any person who engages in a temporary business, either direct or indirect retail sales, for a six-day period immediately preceding and including Labor Day of each year within the perimeter fence of the Kittitas County Fair, and who does not hold a permanent license to do business within the city of Ellensburg. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3425 § 1, 1984; Ord. 2372 § 2, 1958.]

6.54.090 Engaging in business.

A.    The term “engaging in business” means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.

B.    This section sets forth examples of activities that constitute engaging in business in the city, and establishes safe harbors for certain of those activities so that a person who meets the criteria may engage in de minimis business activities in the city without having to pay a business license fee. The activities listed in this section are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection (A) of this section. If an activity is not listed, whether it constitutes engaging in business in the city shall be determined by considering all the facts and circumstances and applicable law.

C.    Without being all-inclusive, any one of the following activities conducted within the city by a person, or its employee, agent, representative, independent contractor, broker or another acting on its behalf, constitutes engaging in business and requires a person to register and obtain a business license:

1.    Owning, renting, leasing, maintaining, or having the right to use, or using, tangible personal property, intangible personal property, or real property permanently or temporarily located in the city.

2.    Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city.

3.    Soliciting sales.

4.    Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.

5.    Providing technical assistance or service, including quality control, product inspections, warranty work, or similar services on or in connection with tangible personal property sold by the person or on its behalf.

6.    Installing, constructing, or supervising installation or construction of real or tangible personal property.

7.    Soliciting, negotiating, or approving franchise, license, or other similar agreements.

8.    Collecting current or delinquent accounts.

9.    Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.

10.    Providing disinfecting and pest control services, employment and labor pool services, home nursing care, janitorial services, appraising, landscape architectural services, security system services, surveying, and real estate services including the listing of homes and managing real property.

11.    Rendering professional services such as those provided by accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball clubs and other sports organizations, chemists, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, and veterinarians.

12.    Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.

13.    Training or recruiting agents, representatives, independent contractors, brokers or others, domiciled or operating on a job in the city, acting on its behalf, or for customers or potential customers.

14.    Investigating, resolving, or otherwise assisting in resolving customer complaints.

15.    In-store stocking or manipulating products or goods, sold to and owned by a customer, regardless of where sale and delivery of the goods took place.

16.    Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.

D.    If a person, or its employee, agent, representative, independent contractor, broker or another acting on the person’s behalf, engages in no other activities in or with the city but the following, it need not register and obtain a business license:

1.    Meeting with suppliers of goods and services as a customer.

2.    Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.

3.    Attending meetings, such as board meetings, retreats, seminars, and conferences, or other meetings wherein the person does not provide training in connection with tangible personal property sold by the person or on its behalf. This provision does not apply to any board of directors member or attendee engaging in business such as a member of a board of directors who attends a board meeting.

4.    Renting tangible or intangible property as a customer when the property is not used in the city.

5.    Attending, but not participating in, a trade show or multiple vendor events. Persons participating at a trade show shall review the city’s trade show or multiple vendor event ordinances.

6.    Conducting advertising through the mail.

7.    Soliciting sales by phone from a location outside the city.

E.    A seller located outside the city merely delivering goods into the city by means of common carrier is not required to register and obtain a business license; provided, that it engages in no other business activities in the city. Such activities do not include those in subsection (D) of this section.

The city expressly intends that engaging in business include any activity sufficient to establish nexus for purposes of applying the license fee under the law and the Constitutions of the United States and the state of Washington. Nexus is presumed to continue as long as the taxpayer benefits from the activity that constituted the original nexus generating contact or subsequent contacts. [Ord. 4809 § 1, 2018.]

6.54.100 Business license required.

A.    On and after the effective date of the ordinance codified in this chapter, it shall be unlawful for any person to engage in any business or activity in the city for which a license fee or 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 a “business license,” issued under the provisions of this chapter, as hereinafter provided, and without paying the license fee or tax imposed by this chapter.

B.    Application for the license is made to the Business Licensing Service. The license expires on the date established by the Business Licensing Service, and must be renewed on or before that date each year. The application must include the name of the applicant, the place and nature of business, the number of employees and such other information as may be required to complete the application with the Business Licensing Service. The term and license fee due may be prorated in order to synchronize the expiration of the license with the established expiration date of the business as maintained by the Business Licensing Service. The application must be accompanied by the license fee prescribed by this chapter, the total fees due for all other licenses requested on the application, and the handling fee required by RCW 19.02.075.

C.    Every license granted under this chapter must be posted in a conspicuous place in the place of business of the licensee. Any license issued under and by virtue of the provisions of this chapter is nontransferable. In case business is transacted at two or more separate places, the taxpayer must license each place separately.

D.    Failure of the taxpayer to receive any forms shall not excuse the taxpayer from making application for and securing the license required and payment of the license fee or tax, when and as due hereunder.

E.    If any person required by the terms and provisions of this chapter to pay a license renewal fee fails to do so by the expiration date of the license, a late renewal penalty required by RCW 19.02.085 will be assessed. Failure to renew within 120 days after the expiration date of the license will result in the cancellation of the license and will require submission of a new application as provided in this chapter in order to continue business within the city of Ellensburg.

F.    Payment of the license fee is a condition precedent to lawful operation of a business within the city limits. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3239 § 4, 1979; Ord. 2751 § 2, 1968; Ord. 2372 § 6, 1958. Formerly 6.54.240.]

6.54.120 Persons subject to license fee – Amount.

On and after the effective date of the ordinance codified in this chapter, there is hereby levied upon and shall be collected from every person engaging in business in the city an annual license fee or tax for the privilege of engaging in business activities at each location. The license fee shall be measured by the number of employees of each business employed during the 12-month period immediately preceding the year for which the license fee is payable as follows:

A.    For every person employing zero to five employees: $30.00 per year;

B.    For every person employing six to 12 employees: $65.00 per year;

C.    For every person employing 13 to 25 employees: $120.00 per year;

D.    For every person employing 26 to 50 employees: $150.00 per year;

E.    For every person employing 51 or more employees: $200.00 per year;

F.    A home occupation, as defined in the zoning ordinance: a fee of $10.00 per year;

G.    A temporary business license not to exceed 90 days within any 12-month period: a fee of $25.00 for each 30-day period;

H.    A solicitor’s license not to exceed 30 days: a fee of $10.00 per solicitor;

I.    A temporary Kittitas County Fair business license not to exceed six days immediately preceding and including Labor Day each year: a fee of $10.00. This fee is to be collected by the Kittitas County Fair acting as agent for the city of Ellensburg. The Kittitas County Fair will remit fees collected to the city of Ellensburg by warrant, accompanied by a listing of temporary Kittitas County Fair businesses and their addresses.

J.    Employees working more than 1,600 hours, including legal holidays and vacation time, during the 12-month period immediately preceding the year for which the license fee is payable shall be considered permanent. Employees working 1,600 hours or less, including legal holidays and vacation time, shall be considered temporary employees.

K.    In determining the license fee to be paid hereunder by each business, the total number of employees shall be computed by adding together the number of permanent employees and the number of temporary employees, the latter figure to be computed by dividing total man-hours, including legal holidays and vacation time, worked by all temporary employees by 1,600. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3425 § 2, 1984; Ord. 3239 § 2, 1979; Ord. 2751 § 1, 1968; Ord. 2372 § 3, 1958.]

6.54.160 Business located outside city.

Unless otherwise exempt, this chapter covers and applies to businesses located outside the city that engage in any business activity inside the city limits. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 4, 1958.]

6.54.200 Exemptions.

Notwithstanding any other section of this chapter, the requirements to obtain a business license under this chapter shall not apply to:

A.    Any person or business whose annual value of products, gross proceeds for sales, or gross income of the business in the city is equal to or less than $2,000 and who does not maintain a place of business within the city;

B.    Telephone and television cable businesses for which a license is required by special ordinance;

C.    Fraternal benefit societies, as defined in RCW 48.36A.010, and fraternal mutual property insurers, as defined in RCW 48.36A.390;

D.    Any religious society, association or corporation, through the operation of any hospital, clinic, resort or other institution devoted exclusively to the care or healing of human beings; provided, that no exemption is granted where the income therefrom inures to the benefit of any physician, surgeon, stockholder, or individual by virtue of ownership or control of such hospital, clinic, resort or other institution;

E.    Any instrumentality of the United States, state of Washington, or political subdivision thereof;

F.    Any farmer, gardener or other person who shall sell, deliver or peddle any fruits, vegetables, berries, butter, eggs, milk, poultry, meats, or any farm produce or edibles raised, caught, produced or manufactured by such person within the state of Washington;

G.    Any person or business that has obtained a special events permit under Chapter 6.64 ECC;

H.    Lessors of rental property. As used in this chapter, “lessor” means the owner, landlord or sublessor of rental housing or rental property, and a person designated as a representative of the landlord; or a person or business entity such as a corporation, limited liability corporation, partnership, or agency that owns, operates, or manages rental housing or rental property; or a person, designated by the landlord, who has authority to sign a lease or rental agreement. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3239 § 3, 1979; Ord. 3027 § 5, 1974; Ord. 2971 § 1, 1973; Ord. 2372 § 5, 1958.]

6.54.260 Application review.

With the exception of temporary business licenses, all city business licenses are processed and issued through the State of Washington Business Licensing Service (BLS). All city application reviews will be completed within 10 working days from the day the city clerk receives the applicant’s information from BLS. Prior to BLS issuance of a business license authorized by this chapter, application review shall be conducted by the city as follows:

A.    Permanent and Temporary Business Licenses. All permanent and temporary business licenses shall be referred for zoning ordinance compliance, location approval and compliance with other city ordinances to the building official, community development department, and fire marshal.

B.    Renewals of Permanent Licenses. No review shall be required for zoning, building or fire unless a location change has been made, in which case the application will be referred for review as outlined in subsection (A) of this section.

C.    Home Occupation Licenses. All new home occupation license applications shall be referred for compliance with zoning ordinance requirements, location approval and review as outlined in subsection (A) of this section.

D.    Solicitor Licenses. All solicitor licenses shall be issued by the police department. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 4566 § 24, 2010; Ord. 3425 § 4, 1984.]

6.54.280 Records to be kept.

It shall be the duty of every person liable for any license fee provided for by this chapter to keep and preserve for a period of five years such suitable employment records as may be necessary to determine the amount of any license fee for which he may be liable under the provisions of this chapter; and such records shall be open for examination at any time by the city council or its duly authorized agent. In the case of an out-of-state person or concern which does not keep the necessary books or records within the city, it shall be sufficient if it produces within the city such books and records as shall be required by the city council, or bears the cost of examination by an agent authorized or designated by the said city council at the place where such books and records are kept. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 7, 1958.]

6.54.320 Payment of license fees.

Each annual license fee herein provided for shall become due and payable on the expiration of the license as established by the Business Licensing Service. The annual license fee may be prorated in order to synchronize the expiration date of the license with the established expiration of the business as maintained by the Business Licensing Service. Failure to pay the license fee by the expiration date incurs a late filing penalty as required by RCW 19.02.085. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 4414 § 1, 2005; Ord. 2751 § 3, 1968; Ord. 2372 § 8, 1958.]

6.54.340 Collection of fees.

The city shall have the power to institute suit or action in any court of competent jurisdiction for the purpose of collecting any license fees that are due and payable. Costs of such legal action shall be payable by the license applicant in addition to the license fees payable if the city’s suit is successful. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3425 § 6, 1984.]

6.54.360 Overpayment.

If the city clerk upon investigation or upon checking applications finds that the fee or tax paid on any of them is more than the amount required of the taxpayer, he shall return the amount overpaid by a check issued by the city finance director/treasurer upon the current expense fund. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 4414 § 2, 2005; Ord. 2372 § 9, 1958.]

6.54.400 Failure to make application.

Repealed by Ord. 4774. [Ord. 2372 § 10, 1958.]

6.54.440 Denial, suspension, or revocation of licenses – Appeal to city manager.

A.    Revocation or Suspension by City Clerk. The city clerk shall have the right to deny, revoke or suspend any license. The city clerk shall notify the license applicant or licensee in writing of the denial, suspension, or revocation of his or her registration and the grounds therefor. A business license may be denied, suspended or revoked for any one or more of the following reasons:

1.    The license was procured by fraud or false representation of fact or contains misleading statements or suppression of material facts about the business;

2.    The license applicant has applied for a business license for activities that are prohibited by law;

3.    The licensee, owner, or operator of the business is currently failing to comply with applicable fire, building, land use, sanitation or health regulations;

4.    The licensee is in violation of the terms and conditions under which the license was issued;

5.    The licensee, owner, operator, or an employee has been convicted of a crime involving the business; or

6.    It is necessary to deny, suspend, or revoke the license for the protection of the public health, safety, peace, or welfare.

B.    If a business license is denied, suspended, or revoked pursuant to any provision of this chapter, a business owner or license applicant may appeal such decision to the city manager within 30 days of such denial, suspension, or revocation. In order for an appeal to be considered, the business owner or applicant must state with particularity the reasons why the city’s decision was in error and the reasons the city manager should reverse the denial, suspension, or revocation. The city manager (or designee) will review the appeal and issue a written decision to uphold, modify, or reverse the denial, suspension, or revocation within 30 days of receipt of the appeal. The city manager’s decision is the final decision of the city and may be appealed to the Kittitas County superior court within 30 days of the date the city manager issues his/her decision. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 3425 § 5, 1984; Ord. 2372 § 11, 1958.]

6.54.480 City manager to make rules.

Repealed by Ord. 4774. [Ord. 3404 § 1, 1983; Ord. 2372 § 12, 1958.]

6.54.520 Mailing of notices.

Repealed by Ord. 4774. [Ord. 2372 § 13, 1958.]

6.54.560 False applications, etc.

It shall be unlawful for any person liable to license fee or tax hereunder to fail or refuse to secure the license or to pay the fee or tax when due, or for any person to make any false or fraudulent application or any false statement or representation, in or in connection with any such application, or to aid or abet another in any 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 any fee or tax, or upon the hearing of any fee or tax, 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. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 14, 1958.]

6.54.600 License fee additional to others.

The license fee and tax herein levied shall be additional to any license fee or tax imposed or levied under the law of any other ordinance of the city of Ellensburg except as herein otherwise expressly provided. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 15, 1958.]

6.54.640 Tax constitutes debt.

Any license fee or tax due and unpaid under this chapter, and all penalties thereon, shall constitute a debt to the city of Ellensburg 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. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 16, 1958.]

6.54.680 Limitation of actions.

Repealed by Ord. 4774. [Ord. 2372 § 19, 1958.]

6.54.720 Penalty for violations.

A.    Any person violating or failing to comply with any of the provisions of this chapter shall be punished by a fine in any sum not to exceed $1,000, or by imprisonment for a term not exceeding 90 days, or by both such fine and imprisonment, which penalty shall be in addition to any other penalties provided for herein.

B.    Any taxpayer who engaged in, or carried on, any business subject to a tax hereunder without having his business 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 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 so to do. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 17, 1958.]

6.54.760 Severability.

If any provision or section of this chapter shall be held void or unconstitutional, all other parts, provisions and sections of this chapter not expressly so held to be void or unconstitutional shall continue in full force and effect. [Ord. 4809 § 1, 2018; Ord. 4774 § 3, 2017; Ord. 2372 § 18, 1958.]