Chapter 3.16
BUSINESS AND OCCUPATION TAX

Sections:

3.16.010    Exercise of revenue license power.

3.16.020    Definitions.

3.16.030    Repealed.

3.16.031    Repealed.

3.16.040    Repealed.

3.16.050    License tax year.

3.16.060    Occupation license and tax – Applicable businesses – Rate.

3.16.070    Exceptions and deductions.

3.16.080    Repealed.

3.16.090    Monthly, quarterly payments.

3.16.100    Tax apportioned for business commencing during tax year.

3.16.110    License prerequisite to monthly payments.

3.16.120    Sale or transfer of business.

3.16.130    Books and records of gross income.

3.16.140    Investigation of returns.

3.16.150    Over or under payment.

3.16.160    Nonpayment of tax – Liability.

3.16.170    Appeals to city council.

3.16.180    Rules and regulations.

3.16.190    Posting of license – Transferability.

3.16.200    Violation – False returns, etc.

3.16.210    Violation – Penalty.

3.16.010 Exercise of revenue license power.

The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue. (Ord. 129 § 1, 1970).

3.16.020 Definitions.

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

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 (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 evidences of indebtedness, or stocks and the like) and without any deduction on account of the cost of the property sold, the cost of materials used, labor costs, interest or discount paid, or any expense whatsoever, and without any deduction on account of losses;

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

C. “Tax year” or “taxable year” means the calendar 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.

D. “Business, telephone” means the business of providing access to a local telephone network, local network telephone switching service, toll service, cellular phone or coin telephone services, or the providing of telephonic, video, data, or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. This includes interstate service, and includes toll service, originating from or received on telecommunications equipment or apparatus in this state if the charge for the service is billed to a person in this state. It further includes cooperative or farmer line telephone companies or associations operating an exchange. “Telephone business” does not include the providing of competitive telephone service, the providing of cable television service, nor the providing of broadcast services by radio or television stations. “Competitive telephone service” means the providing 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. (Ord. 670 § 1, 1994; Ord. 129 § 2, 1970).

3.16.030 License required – Fee – Issuance.

Repealed by Ord. 666. (Ord. 343, 1980; Ord. 129B § 2, 1971; Ord. 129, 1970).

3.16.031 Grounds for issuance.

Repealed by Ord. 666. (Ord. 609 § 1, 1991).

3.16.040 Occupation license – Required.

Repealed by Ord. 666. (Ord. 130 § 1, 1970; Ord. 129 § 3, 1970).

3.16.050 License tax year.

A. All occupation licenses shall be for the tax year for which issued and shall expire at the end of such tax year.

B. Such occupation license and the fee or tax therefor imposed shall be for the calendar year; provided, however, that if the taxpayer in transacting his business keeps the books reflecting the same for a fiscal year not based on the calendar year he may, with the assent of the city clerk, obtain his license for the period of his current fiscal year which shall be deemed his tax year, and pay the fee or tax computed upon his gross income made during his fiscal year (next preceding his tax year) covering his accounting period as shown by the method of keeping the books of the business. (Ord. 129 § 4, 1970).

3.16.060 Occupation license and tax – Applicable businesses – Rate.

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

Upon every person or company engaged in or carrying on a telephone business, electrical power business, water utility business, sewer utility business, storm drainage utility business, and a business for furnishing natural gas, a fee or tax equal to five percent of the total gross income from such businesses in the city and city utility businesses operating outside the city during his or its fiscal year next preceding the tax year for which the license is required. (Ord. 549 § 1, 1989; Ord. 436 § 1, 1983; Ord. 408 § 1, 1982; Ord. 129 § 5, 1970).

3.16.070 Exceptions and deductions.

There is excepted and deducted from the total gross income upon which the license fee or tax is computed so much thereof as is derived from the business which the city is prohibited from taxing under the Constitution or laws of the United States or the Constitution or laws of the state of Washington, and any amount paid by the taxpayer to the United States or the state of Washington as excise taxes levied or imposed upon the sale or distribution of property or services.

There shall also 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. (Ord. 1205 § 1, 2011; Ord. 129 § 7, 1970).

3.16.080 Occupation license – Application.

Repealed by Ord. 666. (Ord. 130 § 1, 1970; Ord. 129 § 8, 1970).

3.16.090 Monthly, quarterly payments.

Where the amount of the license fee or tax is based upon gross income, the taxpayer may pay his fee or tax in equal monthly installments during the life of his license, each such installment to be paid on or before the tenth day of the month. In all other cases the taxpayer may pay his fee or tax in equal installments during the life of his license, each such installment to be paid on or before the first day of February, the first day of May, the first day of August, and the first day of November, respectively. (Ord. 129 § 9, 1970).

3.16.100 Tax apportioned for business commencing during tax year.

A. Where a business, occupation or pursuit subject to tax upon gross income has not been carried on for the full calendar or fiscal year next preceding the tax year for which license is required, the license fee or tax shall be paid monthly in installments during the life of the license on or before the tenth day of the month, and shall be based upon the gross income for the month next preceding that in which payment is due. In such cases the taxpayer shall make monthly returns similar to the annual returns provided for herein on or before the tenth day of the month, under oath or affirmation covering the business of the previous month.

B. In all other cases where a person commences during any tax year to engage in any business, occupation, pursuit or privilege, he shall be entitled to a license for the remainder of such tax year for the required fee apportioned in the ratio of said remainder to a full tax year. (Ord. 129 § 10, 1970).

3.16.110 License prerequisite to monthly payments.

In any case where the taxpayer pays his license fee or tax monthly he shall nevertheless first procure his occupation license in the manner herein required before commencing or continuing in business. (Ord. 129 § 11, 1970).

3.16.120 Sale or transfer of business.

Upon the sale or transfer during any tax year of a business on account of which a fee or tax is required, the purchaser or transferee shall, if the fee or tax has not been paid in full for said year, be responsible for its payment for that portion of said year during which he carries on such business. (Ord. 129 § 12, 1970).

3.16.130 Books and records of gross income.

It shall be the duty of each taxpayer taxed upon his gross income to keep and enter in a proper book or set of books or records an amount which shall accurately reflect the amount of his gross income, which account shall always be open to the inspection of the city clerk, or his duly authorized agent, and from which said officer or his agent may verify the return made by the taxpayer. (Ord. 129 § 13, 1970).

3.16.140 Investigation of returns.

If any taxpayer fails to apply for license, to make his return, or if the clerk is dissatisfied as to the correctness of the statements made in the application or return of any taxpayer, said officer, or his authorized agent, may enter the premises of such taxpayer at any reasonable time for the purpose of inspecting his 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 said officer, or his agent, touching the matters inquired into, or said officer, or his authorized 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 each investigation and there testify, under oath administered by said officer, 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. 129 § 14, 1970).

3.16.150 Over or under payment.

If the 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 city clerk finds that the fee or tax paid is less than required, he shall send a statement to the taxpayer showing the balance due, who shall within three days pay the amount shown thereon. (Ord. 129 § 15, 1970).

3.16.160 Nonpayment of tax – Liability.

If any taxpayer fails to apply for license, or make his return, or to pay the fee or tax therefor, or any part thereof, within three days after the same shall have become due, and the city clerk shall ascertain the amount of the fee or tax or installment thereof due and shall notify such taxpayer thereof, who shall be liable therefor in any suit or action by the city for the collection thereof. The city clerk shall also notify the city attorney in writing of the name of such delinquent taxpayer and the amount due from him and said officer shall, with the assistance of the city clerk, collect the same by any appropriate means or by suit or action in the name of the city. (Ord. 129 § 16, 1970).

3.16.170 Appeals to city council.

A. Any taxpayer aggrieved by the amount of the fee or tax found by the city clerk to be required under the provisions of this chapter, may appeal to the city council from such findings by filing a written notice of appeal with the city clerk within five days from the time such taxpayer was given notice of such amount. The clerk shall, as soon as practicable, fix a time and place for the hearing of such appeal, which time shall not be more than 20 days after the filing of the notice of appeal, and shall cause a notice of the time and place thereof to be delivered or 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 city clerk shall immediately notify the appellant thereof, which amount, together with cost of the appeal, if appellant is unsuccessful therein, must be paid within three days after such notice is given.

B. The mayor may, by subpoena, require the attendance thereat of any person, and may also require him to produce any pertinent books and 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 mayor or acting mayor as to any matter required of him pertinent to the appeal and it shall be unlawful for him to fail or refuse so to do. (Ord. 129 § 17, 1970).

3.16.180 Rules and regulations.

The city clerk shall have the power, 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 shall be unlawful to violate, or fail to comply with, any such rule or regulation. (Ord. 129 § 18, 1970).

3.16.190 Posting of license – Transferability.

A. All licenses issued pursuant to the provisions of this chapter shall be kept posted by the licensee in a conspicuous place in his principal place of business in the city, or, if there be no such principal place of business, in such conspicuous public place in said city as the licensee may select.

B. No person to whom a license has been issued, pursuant to this chapter, shall suffer or allow any other person chargeable with a separate license to operate under or display his license nor shall such other person operate under or display such license. (Ord. 129 § 19, 1970).

3.16.200 Violation – False returns, etc.

It is unlawful for any person liable to tax hereunder to fail or refuse to make application or return for a license or to pay the fee or tax or installment thereof 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 any attempt to evade payment of the fee or tax, or any part thereof, or for any person to fail to appear, 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. 129 § 20, 1970).

3.16.210 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 city clerk pursuant thereto shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punished as prescribed in GHMC 1.16.010. (Ord. 184 § 2, 1974; Ord. 129 § 22, 1970).