Chapter 5.32
UTILITIES BUSINESS AND
OCCUPATION TAX

Sections:

5.32.010    Scope.

5.32.020    License – Generally.

5.32.022    Term of license.

5.32.025    License – Fees – Time for payment – Penalty.

5.32.030    Utilities business and occupation tax.

5.32.035    Definition of “gross income.”

5.32.040    Tax – Deduction.

5.32.050    Tax – Due date and payment.

5.32.060    Taxpayer records – Inspections.

5.32.070    Excess payments.

5.32.080    Nonpayment of tax – Penalty – Collection.

5.32.090    Rules and regulations.

5.32.010 Scope.

The provisions of this chapter shall be deemed to be an exercise of the power of the City to license for revenue. (Ord. 1358 § 1, 1978).

5.32.020 License – Generally.

After January 1, 1979, no person, firm or corporation shall engage in or carry on any business, occupation, act, or privilege for which a tax is imposed by IMC 5.32.030 without first having obtained, and being the holder of, a license to do so, to be known as a utility occupation license; provided, the City shall be exempt from such license requirement. The annual license fee for such license shall be $20.00. Each such person, firm, or corporation shall promptly apply to the City Clerk for such license upon such forms as the Clerk shall prepare and provide, giving such information as the Clerk shall deem reasonably necessary to enable him to administer and enforce this chapter; and, upon acceptance of such application by the Clerk, he shall thereupon issue such license to the applicant. Such occupation license shall be personal and nontransferable and shall be valid as long as the licensee shall continue in the business and shall comply with this chapter. (Ord. 1358 § 2, 1978).

5.32.022 Term of license.

All utility business and occupation licenses issued pursuant to the provisions of this chapter shall be valid until December 31st of the year for which they are issued, and all renewals thereafter shall be for a period of 1 year commencing January 1st of the year for which the license is issued and terminating and expiring December 31st of the same year. (Ord. 2425 § 1, 2005).

5.32.025 License – Fees – Time for payment – Penalty.

A. The annual license fee for such license shall be $60.00. The fee for renewals shall be $50.00 per year.

B. Each such person, firm, or corporation shall promptly apply to the Director of Building or his designee for such license upon such forms as the Director of Building or his designee shall prepare and provide, giving such information as the Director of Building or his designee shall deem reasonably necessary to enable him to administer and enforce this chapter; and, upon acceptance of such application by the Director of Building or his designee, he shall thereupon issue such license to the applicant. Such occupation license shall be personal and nontransferable and shall be valid as long as the licensee shall continue in the business and shall comply with this chapter.

C. All utility businesses and occupations required to obtain licenses under this chapter shall obtain the same and pay all fees required on or before January 1st of each respective year. Any utility business or occupation which fails to obtain and pay the license fees by February 1st shall, in addition to any other penalties provided in this chapter, be assessed $10.00 for each month past due as a penalty for such late application and/or payment. (Ord. 2425 §§ 2, 3, 2005).

5.32.030 Utilities business and occupation tax.

There is levied upon, and shall be collected from everyone, including the City, on account of certain business activities engaged in or carried on in the City, occupation fees or utility business taxes in the amount to be determined by the application of rates given against gross income as follows:

A. A fee or tax is levied upon everyone engaged in or carrying on a telephone business. Said fee or tax shall be equal to a percent, stated herein, of the total gross income from such business in the City during the period for which the license fee or tax is due. Gross income for this purpose shall not include charges which are passed on to the subscribers by a telephone company pursuant to tariffs required by regulatory order to compensate for the cost to the company of the tax imposed by this section. The term “telephone business” means the business of operating or managing any telephone line or channel or part of any telephone line or channel, or exchange or exchanges used in the conduct of affording telephonic communication for hire, or providing access to a local telephone network, toll line or channel, coin telephone services, telephonic video, cable, microwave, data or similar communication or transmission system and includes, but is not limited to, the furnishing or providing by any person of cellular telephone service and intrastate toll telephone service. The term also includes the provision of transmission to and from the site of an Internet service provider (ISP) via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. In determining gross income from such telephone service, the taxpayer shall include 100 percent of the gross income received from such business in the City, provided, there shall be no tax or fees imposed on that portion of the network telephone service, pursuant to RCW 82.04.065, which represents charges to another telecommunications company, pursuant to 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 intrastate services.

The term “telephone business” does not include the provision of “competitive telephone service” as defined in IMC 5.04.030(C)(3).

The fee or tax rate on such telephone business shall be as follows:

Year

Rate

1987

6.5

1988

6.4

1989

6.3

1990

6.2

1991

6.1

1992, et sequentia

6.0

B. Upon everyone engaged in or carrying on the business of selling or furnishing natural gas for domestic, business or industrial consumption, a fee or tax equal to a percent, stated herein, of the total gross income from such business in the City during the period for which the license fee or tax is due.

The fee or tax upon such a business shall be as follows:

Year

Rate

1987

6.5

1988

6.4

1989

6.3

1990

6.2

1991

6.1

1992, et sequentia

6.0

C. Repealed by Ord. 2296.

D. Upon everyone engaged in or carrying on the business of selling or furnishing electric energy, a fee or tax equal to a percent, stated herein, of the total gross income from such business in the City during the period for which the license fee or tax is due.

The fee or tax upon such a business shall be as follows:

Year

Rate

1987

6.5

1988

6.4

1989

6.3

1990

6.2

1991

6.1

1992, et sequentia

6.0

E. Upon the City of Issaquah engaging in or carrying on the business of selling, providing, or furnishing water, a fee or tax equal to 2.33 percent of the total gross income from such business during the period for which such license, fee or tax is due.

F. Upon everyone engaged in or carrying on the business of collection and/or disposal of solid wastes, a fee or tax equal to a percent, stated herein, of the total gross income from such business in the City during the period for which the license fee or tax is due. The operation of a sewerage system shall not be included under this subsection.

The fee or tax upon such a business shall be as follows:

Year

Rate

1987

6.5

1988

6.4

1989

6.3

1990

6.2

1991

6.1

1992, et sequentia

6.0

G. Upon everyone engaged in or carrying on the business of operating or providing cable television service, a fee or tax equal to the difference between 6 percent of the total gross income from such business in the City during the period for which the license fee or tax is due, and any cable television franchise fee paid the City by said person. (Ord. 2578 § 1, 2009; Ord. 2508 § 1, 2007; Ord. 2425 § 4, 2005; Ord. 2296 § 1, 2000; Ord. 2217 § 1, 1998; Ord. 2176 § 1, 1997; Ord. 2137 § 1, 1996; Ord. 1892 § 1, 1991; Ord. 1740 §§ 1 – 4, 1986; Ord. 1738 § 1, 1986; Ord. 1735 §§ 1 – 4, 1986; Ord. 1685 §§ 1 – 4, 1985; Ord. 1636 §§ 1 – 4, 1984; Ord. 1536 § 1, 1982; Ord. 1503 § 1, 1981; Ord. 1358 § 3, 1978).

5.32.035 Definition of “gross income.”

For purposes of IMC 5.32.030(B) through (G), “gross income” means the value proceeding or accruing from the sale of tangible property or service, including the recovery of taxes, 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 deductions on account of the cost of the property sold, the cost of materials used, labor costs, interest or discount paid, taxes, or any expense whatsoever, and without any deduction on account of losses. (Ord. 2634 § 1, 2011).

5.32.040 Tax – Deduction.

In computing the tax imposed by IMC 5.32.030, there shall be deducted from the total gross income, the following items:

A. The amount of credit losses and uncollectibles actually sustained by the taxpayer;

B. Amounts derived from transactions in interstate or foreign commerce or from any business which the City is prohibited from taxing under the Constitution of the United States or the State of Washington. (Ord. 1358 § 4, 1978).

5.32.050 Tax – Due date and payment.

The tax imposed by IMC 5.32.030 shall be due and payable monthly, such payment to be received no later than the last day of each following month. On or before such due date, the taxpayer shall file with the Finance Director a written return, setting forth such information as shall reasonably be required, together with payment of the amount of tax due. (Ord. 1503 § 2, 1981; Ord. 1358 § 5, 1978).

5.32.060 Taxpayer records – Inspections.

Each taxpayer shall keep records reflecting the amount of his gross operating revenues, and such records shall be open at all reasonable times to the inspection of the City Clerk, or his duly authorized subordinates, for verification of tax returns or for the fixing of the tax of a taxpayer who fails to make such returns. (Ord. 1358 § 6, 1978).

5.32.070 Excess payments.

Any money paid to the City through error or otherwise not in payment of the tax imposed in this chapter or in excess of such tax shall, upon request of the taxpayer, be credited against any tax due or to become due from such taxpayer under the provisions of this chapter or, upon the taxpayer’s ceasing to do business in the City, be refunded to the taxpayer. (Ord. 1358 § 8, 1978).

5.32.080 Nonpayment of tax – Penalty – Collection.

If any person, firm, or corporation subject to this chapter fails to pay any tax required by this chapter on or before the due date thereof, there shall be added to such tax a penalty of 10 percent of the amount of such tax or $10.00, whichever is greater; and any tax due under this chapter and 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. 1949 § 1, 1992; Ord. 1358 § 7, 1978).

5.32.090 Rules and regulations.

The Finance Director, or his or her designee, is authorized to adopt, publish and enforce, from time to time, such rules and regulations for the proper administration of this chapter as shall be necessary; and it shall be a violation of this chapter to violate or to fail to comply with any such rule or regulation lawfully promulgated under the provisions of this chapter. (Ord. 2425 § 5, 2005; Ord. 1358 § 11, 1978).