Chapter 3.18
UTILITY TAX ON TELEPHONE, GAS, ELECTRIC, SOLID WASTE, WATER, SEWER, AND DRAINAGE UTILITIES* Revised 1/23
Sections:
3.18.001 Administrative provisions.
3.18.010 Definitions.
3.18.020 Certain utilities subject to tax. Revised 1/23
3.18.025 Reserved.
3.18.030 Utility tax, when due.
3.18.040 Repealed.
3.18.050 Repealed.
3.18.060 Repealed.
3.18.070 Repealed.
3.18.080 Repealed.
3.18.090 Repealed.
*Cross reference(s) – Application for and billing out utility services, ch. 7.01; water services, ch. 7.02; solid waste services, ch. 7.03; sanitary sewer services, ch. 7.04; storm and surface water utility, ch. 7.05; combined sewer and storm and surface water utility services, ch. 7.06; utility services outside the city, ch. 7.11.
State law reference(s) – Utility tax, RCW 82.16.010 et seq.; excise tax on telephone business, RCW 35A.82.060; network telephone service, RCW 35A.82.065; referendum procedure, RCW 35.21.706; minimum waiting period, RCW 35.21.865; tax limitation, RCW 35.21.870.
3.18.001 Administrative provisions.
The administrative provisions contained in Chapter 3.29 KCC shall be fully applicable to the provisions of this chapter except as expressly stated to the contrary herein.
(Ord. No. 4342, § 1, 11-19-19)
3.18.010 Definitions.
The following words, terms, and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
Cable television business means:
1. A system providing service pursuant to a franchise issued by the city under the Cable Communications Policy Act of 1984, Public Law No. 98-549, 47 U.S.C. Section 521, as it may be amended or superseded; or
2. Any system that competes directly with such franchised system by employing antennas, microwaves, wires, wave guides, coaxial cables, or other conductors, equipment, or facilities designed, construed, or used for the purpose of:
a. Collecting and amplifying local and distant broadcast television signals and distributing and transmitting them;
b. Transmitting original cable cast programming not received through television broadcast signals; or
c. Transmitting television pictures, film, and videotape programs not received through broadcast television signals, whether or not encoded or processed to permit reception by only selected receivers; provided, however, that “cable television business” shall not include entities that are subject to charges as “commercial TV stations” under 47 U.S.C. Section 158, as it may be amended or superseded.
Cellular telephone service means any two-way voice and/or 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 that conflicts with or overrides this chapter. Cellular telephone service includes other wireless radio communications services including, without limitation, specialized mobile radio, paging services, personal communications, and data services, and any other evolving wireless radio communications technology that accomplishes a purpose substantially similar to cellular telephone service. Cellular telephone service is included within the definition of “telephone business” for the purposes of this chapter.
Competitive telephone service means the providing by any person, firm, or corporation 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 RCW Title 80 and for which a separate charge is made.
Gross income means the value proceeding or accruing from the performance of the particular public service business involved, including operations incidental thereto, but without any deduction on account of the cost of the commodity furnished or sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses. In addition, when determining total gross income from cellular telephone service, “gross income” shall include all income from cellular telephone service (including roaming charges incurred outside this state) provided to customers whose place of primary use is in the city, regardless of the location of the facilities used to provide the service. The customer’s “place of primary use” is, with respect to each telephone: (1) the customer’s address shown on the telephone service company’s records; or (2) the customer’s place of residence if the telephone is for personal use, and in both cases must be located within the licensed service area of the home service provider. Roaming charges and cellular telephone charges to customers whose place of primary use is outside the city of Kent will not be taxable even though those cellular services are provided within the city of Kent. There is a rebuttable presumption that the address shown on the cellular telephone service company’s records is the place of primary use and is accurate. If the cellular telephone service company knows or should have known that a customer’s place of primary use address for a telephone is within the city, then the gross income from cellular telephone service provided to that customer with respect to that telephone is to be included in the company’s gross income. For the purposes of this chapter, water, sewer, and drainage service connection fees shall be excluded from gross income.
Solid waste means all putrescible and nonputrescible solid and semisolid wastes including, but not limited to, garbage, rubbish, ashes, industrial wastes, swill, sewage sludge, infectious, hazardous, or toxic wastes, demolition and construction wastes, abandoned vehicles or parts thereof, and recyclable or reusable materials collected, in whole or in part, for recycling or salvage.
Solid waste collection service means receiving solid waste for transfer, storage, processing, treatment, or disposal including, but not limited to, all residential and commercial collection services, public or private solid waste disposal sites, transfer stations, and similar operations. Solid waste collection service includes the activities of transferring, processing, treating, storing, or disposing of the solid waste collected.
Telephone business means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. It includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice over internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. Telephone business shall include 100 percent of the business and total gross income derived from calls originating and/or billed to subscribers within the city. Telephone business also includes ancillary services that are associated with or incidental to the provision of telecommunication services including, but not limited to, conference bridging, detailed telecommunications billing, directory assistance, vertical service, or voice mail services as defined in RCW 82.04.065.
“Telephone business” also includes the providing by any person, firm, or corporation of access to a local telephone network, local telephone network switching service, toll service, cellular or mobile telephone service, coin telephone services, pager service, 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. The term includes the provision of cooperative or farmer line telephone services or associations operating exchanges. The term also includes the provision of transmission to and from the site of an internet provider via a local 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, data processing, providing of cable television service, or other providing of broadcast services by radio or television stations. Transmission of communication through cellular telephones is classified as telephone business rather than competitive telephone service.
(Ord. No. 2758, § 1; Ord. No. 3091, § 1, 2-16-93; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12; Ord. No. 4281, § 1, 6-19-18; Ord. No. 4342, § 1, 11-19-19; Ord. No. 4423, § 1, 12-14-21. Formerly Code 1986, § 3.04.040(1)(a))
Cross reference(s) – Definitions and rules of construction generally, § 1.01.030.
State law reference(s) – Similar provisions, RCW 82.04.065.
3.18.020 Certain utilities subject to tax. Revised 1/23
A. In addition to the other business and license fees required by the ordinances of the city, the city levies upon all persons, firms, or corporations (including the city) engaged in certain business activities a utilities tax to be collected as follows:
1. Upon every person, firm, or corporation engaging in or carrying on any telephone business within the city, an annual tax equal to six percent of the total gross income, including revenues from intrastate toll, derived from the operation of such business within the city. This six percent tax will be allocated as follows: 4.7 percent to the general fund, 0.3 percent to youth/teen programs, and one percent to street improvement programs.
2. Upon every person, firm, or corporation engaging in or carrying on a business of selling, wheeling, furnishing, distributing, or producing gas, whether manufactured or natural, for commercial or domestic use or purposes, a fee or tax equal to six percent of the total gross income from such business in the city during the tax year for which the license is required. This six percent tax will be allocated as follows: 4.7 percent to the general fund, 0.3 percent to youth/teen programs, and one percent to street improvement programs.
3. Upon every person, firm, or corporation engaged in or carrying on the business of selling, wheeling, furnishing, or distributing electricity for light and power, a fee or tax equal to six percent of the total gross income from such business in the city during the tax year for which a license is required. This six percent tax will be allocated as follows: 4.7 percent to the general fund, 0.3 percent to youth/teen programs, and one percent to street improvement programs.
4. Upon every person, firm, or corporation engaged in or carrying on the business of providing cable television services, a tax equal to six percent of the total gross income from that business in the city during the tax year for which the license is required. All revenue received from this tax must be applied only to funding the city’s information technology department operations and capital projects budgets in the proportion determined by the city council in its biennial budget, including all amendments.
5. Upon every person, firm, or corporation engaging in or carrying on a business providing solid waste collection services, a tax equal to 18.4 percent of the total gross income from such business in the city during the tax year for which the license is required. This 18.4 percent tax will be allocated as follows: 6.5 percent to the general fund, 0.3 percent to youth/teen programs, one percent to street improvement programs, and 10.6 percent to maintain and repair residential streets, including related impacts to curbs, gutters, sidewalks, and other road amenities, including crosswalks along with necessary appurtenances, and improvements related to residential traffic calming, but this 10.6 percent portion of the solid waste utility tax shall not be used to expand, extend, or widen existing residential streets or to build new residential streets. The amount used from this fund for neighborhood traffic calming devices and crosswalks shall not exceed $150,000 in any year.
6. Upon every person (including the city) engaging in or carrying on the business of selling, furnishing, or distributing water services, a tax equal to 13 percent of the total gross income from that business in the city during the tax year; upon every person (including the city) engaging in or carrying on the business of selling, furnishing, or distributing sewer services, a tax equal to 9.5 percent of the total gross income from that business in the city during the tax year; and upon every person (including the city) engaging in or carrying on the business of selling, furnishing, or distributing drainage services, a tax equal to 19.5 percent of the total gross income from such business in the city during the tax year. Unless otherwise directed by the city council in its budget process, the total of these tax revenues will be allocated as follows: 90.00 percent to the general fund for the use as allocated in the city’s budget; 7.69 percent to street improvement programs; and 2.31 percent to youth/teen programs.
B. In computing the tax provided in subsection (A) of this section, the taxpayer may deduct from total gross income the following items:
1. The actual amount of credit losses and uncollectible receivables sustained by the taxpayer.
2. Amounts derived from transactions in interstate and foreign commerce which the city is prohibited from taxing under the laws and Constitution of the United States.
(Ord. No. 2390, § 1; Ord. No. 2514, § 1; Ord. No. 3274, § 1, 1-2-96; Ord. No. 3314, § 1, 10-1-96; Ord. No. 3319, § 2, 10-15-96; Ord. No. 3321, § 1, 11-6-96; Ord. No. 3370, § 1, 11-18-97; Ord. No. 3456, § 1, 5-4-99; Ord. No. 3489, § 1, 11-16-99; Ord. No. 3594, § 1, 2-19-02; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4020, § 1, 12-13-11; Ord. No. 4061, § 1, 12-11-12; Ord. No. 4128, § 1, 11-4-14; Ord. No. 4134, § 1, 12-16-14; Ord. No. 4213, § 1, 8-16-16; Ord. No. 4217*, § 1, 10-18-16; Ord. No. 4293, § 1, 11-20-18; Ord. No. 4342, § 1, 11-19-19; Ord. No. 4449, § 1, 11-15-22. Formerly Code 1986, § 3.04.040(2))
3.18.025 Reserved.
Editor’s note – Ord. No. 3274, § 1, adopted Jan. 2, 1996, repealed § 3.18.025, which pertained to certain utilities subject to interim tax.
3.18.030 Utility tax, when due.
The utility tax imposed by KCC 3.18.020 shall be due and payable in monthly installments and remittance thereof shall be made on or before the last day of the following month in which the tax accrued. On or before said due date, the taxpayer shall file with the finance department a return upon a form to be prescribed and provided by the finance department, which return shall contain a statement by the taxpayer, stating that the amount of tax for which it is liable for the preceding monthly period, that the information therein given and the amount of tax liability therein reported are full and true, and that the taxpayer knows the same to be true. This statement shall be signed by the taxpayer or its authorized agent. Taxpayers expected to owe less than one thousand dollars ($1,000) per month may submit taxes on a quarterly basis; taxes shall be due on the last day of the month following the end of the quarter in which the tax accrued. Quarterly period for the purpose of this chapter shall mean each three-month period of the calendar year, commencing on January 1st.
(Ord. No. 2390, § 1; Ord. No. 2758, § 1; Ord. No. 3074, § 1(3.04.080), 11-3-92; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12; Ord. No. 4342, § 1, 11-19-19. Formerly Code 1986, § 3.04.110)
3.18.040 Taxpayer’s records.
Repealed by Ord. No. 4342.
(Ord. No. 3074, § 1(3.04.090), 11-3-92; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12)
3.18.050 Tax – Payment failure – Penalty and collection.
Repealed by Ord. No. 4342.
(Ord. No. 3074, § 1(3.04.100), 11-3-92; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12)
3.18.060 Overpayment of tax.
Repealed by Ord. No. 4342.
(Ord. No. 3074, § 1(3.04.110), 11-3-92; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12)
3.18.070 Appeal to hearing examiner.
Repealed by Ord. No. 4342.
(Ord. No. 3074, § 1(3.04.120), 11-3-92; Ord. No. 3645, § 1, 6-3-03; Ord. No. 4061, § 1, 12-11-12)