Chapter 5.25
GAMBLING TAX
Sections:
5.25.005 Certain forms of gambling allowed.
5.25.010 Adoption by reference.
5.25.030 Taxes imposed – Amounts and alternative tax agreement.
5.25.040 Tax to be computed and paid monthly – Exceptions.
5.25.050 Administration and collection of tax.
5.25.070 Failure to make timely payments of tax or fee.
5.25.080 Notice of intention to engage in activity to be filed.
5.25.085 Taxpayer notification of closure.
5.25.100 Overpayment or underpayment of tax.
5.25.110 Failure to make return.
5.25.120 Tax additional to others.
5.25.130 Taxes, penalties and fees constitute debt to municipality.
5.25.140 Limitations on right of recovery.
5.25.005 Certain forms of gambling allowed.
The following forms of social gambling are allowed within the city limits, subject to regulation, restriction and taxation under state law, this chapter and LCMC Title 18 (Development Code):
(1) Bingo and raffle games;
(2) Amusement games;
(3) Punch board and pull-tab;
(4) Social card rooms;
(5) Public card rooms.
Unless specifically listed in this section, no gambling or gaming is allowed in the city. All forms of gambling and gaming not listed in this section are prohibited. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2003-02 § 1, 2003.]
5.25.010 Adoption by reference.
(1) The following Washington statutes are adopted by reference as and for a portion of the gambling ordinance of this city as if set forth in full herein:
RCW
9.46.110
9.46.130
9.46.150
9.46.170
9.46.185
9.46.190
9.46.195
9.46.196
9.46.198
9.46.200
9.46.210
9.46.231(1), (2), (3), (5)
9.46.235
9.46.240
9.46.250
9.46.350
(2) In addition, each and every rule and regulation of the Washington State Gambling Commission, as set forth in WAC Title 230, is adopted by reference as and for a portion of the gambling ordinance of this city as if set forth in full herein, as each currently exists or may from time to time be amended.
(3) The amendment, addition or repeal by the Washington Legislature or the Washington State Gambling Commission of any section of any of the adopted statutes or rules and regulations set forth above shall be deemed to amend this chapter and the statutes and rules and regulations contained in this chapter which are adopted by reference, in conformity with the amendment, addition or repeal and it shall not be necessary for the legislative authority of this city to take any action with respect to such addition, amendment, or repeal. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.020 Definitions.
(1) Unless the context specifically indicates or provides otherwise, the terms and expressions used in this chapter shall have the same meaning as provided in Chapter 9.46 RCW and WAC Title 230 as these statutes and rules now exist or may from time to time be amended.
(2) “Gross gambling receipts” means the monetary value, stated in U.S. currency, due to any operator of a gambling activity for purchase of a chance to play a punch board or pull-tab series; purchase of a chance to enter a raffle; fees or purchase of cards to participate in bingo games; fees for participation in an amusement game, including rent or lease payments paid to licensees or franchisors for allowing operation of an amusement game on their premises; and any fee to participate in, or net win from, any card games or fundraising events as defined in WAC 230-02-109. The value shall be before any deductions for prizes or other expenses. Fees from players for entry into a player-supported jackpot held in conjunction with card games are not gross gambling receipts; provided, that any portion of wagers deducted for any purpose other than increasing current prizes or repayment of amounts used to seed such prizes shall be treated as gross gambling receipts.
(3) “Net win” means gross wagers received by a licensee from the operation of house- banked card games or fundraising events, less the amount paid to players for winning wagers, accrual of prizes for progressive jackpot contests, and repayment of amounts used to seed guaranteed progressive jackpot prizes. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2003-02 § 2, 2003; Ord. 2002-02 § 1, 2002.]
5.25.030 Taxes imposed – Amounts and alternative tax agreement.
There is levied a tax upon all persons, associations, and organizations who conduct or operate gambling activities within the city and who have been duly licensed by the Washington State Gambling Commission to conduct or operate such gambling activities as provided in this section.
(1) Presumptive Tax on Gambling Activities. Absent an alternative tax agreement with the operator of a public card room as provided below, or with a person, association, or organization that conducts or operates gambling activities within the city, the following taxes are imposed upon and shall be paid by the person, association, or organization that conducts or operates gambling activities:
(a) Bingo and Raffle Games. Any bingo or raffle activity, a tax computed at the rate of 10 percent of the net win; provided, however, that no tax shall be imposed under the authority of this chapter on bingo or raffles when such activity or any combination thereof are conducted by any bona fide charitable or nonprofit organization as defined in RCW 9.26.020(3), which organization has no paid operating or management personnel and has gross income from bingo or raffles, or any combination thereof, not exceeding $5,000 per year less the amount paid for as prizes; and further provided, that activities carried out by public or private schools or by organizations sponsored by or related to public or private schools, including parent organizations and student body organizations, shall be exempt from the provisions of this chapter when the proceeds of such activities are applied for the benefit of any such school, or school-sponsored or school-related organization; and provided further, that any deviation from exemption restrictions enumerated herein shall subject such organization to the requirements of this chapter to the same extent as if such exemption had not been granted, including required payment within 10 days after written demand of the city of La Center of any taxes formerly granted exemption hereunder.
(b) Amusement Games. Any amusement game, a tax computed at two percent of the net win; provided, however, that no tax shall be imposed under the authority of this chapter on amusement games when such activity is conducted by any bona fide charitable or nonprofit organization as defined in RCW 9.26.020(3), which organization has no paid operating or management personnel and has gross income from amusement games not exceeding $5,000 per year less the amount paid for as prizes; and provided further, that activities carried out by public or private schools or by organizations sponsored by or related to public or private schools, including parent organizations and student body organizations, shall be exempt from the provisions of this chapter when the proceeds of such activities are applied for the benefit of any such school, or school-sponsored or school-related organizations; and provided further, that any deviation from exemption restrictions enumerated herein shall subject such organization to the requirements of this chapter to the same extent as if such exemption had not been granted, including required payment within 10 days after written demand of the city of La Center of any taxes formerly granted exemption hereunder.
(c) Punch Board or Pull-Tab. Any punch board or pull-tab, a tax computed at the rate of five percent of the net win from the conduct of such activity.
(d) Social Card Rooms. Any card game, a tax computed at the rate of 10 percent of the net win from the conduct of such activity.
(e) Public Card Rooms. Any card game, a tax computed at the rate of net win from such monthly gambling activities:
(i) Five percent on net win up to $400,000.
(ii) Seven and one-half percent on net win between $400,001 and $700,000.
(iii) Ten percent on net win between $700,001 and $1,000,000.
(iv) Twelve and one-half percent on net win between $1,000,001 and $1,300,000.
(v) Fifteen percent on net win over $1,300,000.
(2) Alternative Tax Agreement for Public Card Rooms. As an alternative to the taxes and tax rates imposed on the operators of public card rooms in subsection (1) of this section, the city may enter into an alternative tax agreement with a person, association, or organization that operates a public card room within the city, subject to the following limitations and requirements:
(a) The decision to enter into an alternative tax agreement with any party is within the complete and sole discretion of the city council, but if the city enters into an alternative tax agreement with any party, all similarly situated persons, associations, and organizations operating a public card room shall be eligible for a similar alternative tax agreement on the same terms.
(b) If a valid alternative tax agreement is executed between the city and the operator of a public card room within the city, the terms, taxes, tax rates, penalties, and remedies for late or nonpayment shall control instead of those set forth in subsection (1) of this section.
(c) Any alternative tax agreement executed between the city and the operator of a public card room shall remain in effect and control according to its terms so long as the alternative tax agreement remains in effect. If an otherwise valid alternative tax agreement is terminated, violated, breached, or declared invalid by a court of competent jurisdiction, the applicable taxes, tax rates and other requirements of subsection (1) of this section that would otherwise have applied without an alternative tax agreement shall immediately become effective and retroactively applied without any action by the city, in addition to the applicable penalties provided by LCMC 5.25.070. In the event of any such termination, violation, breach, or declaration of invalidity, all such retroactive taxes and penalties shall immediately be due and payable and shall attach as a lien on the operator’s real property as provided in LCMC 5.25.130. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2003-02 § 2, 2003; Ord. 2002-02 § 1, 2002.]
5.25.040 Tax to be computed and paid monthly – Exceptions.
Each of the various taxes imposed by this chapter shall be computed on the basis of activity during each calendar month, and shall be due and payable in monthly installments, and the remittance, together with return forms authorized by the city clerk/treasurer, shall be made to the city of La Center, Washington, on or before the last working day of the month next succeeding the monthly period in which the tax is accrued; provided, that the following exceptions to the payment schedule shall be allowed or required:
(1) Whenever any person, association, or organization taxable hereunder, conducting or operating a taxable activity on a regular basis discontinues operation of that taxable activity for a period of more than four consecutive weeks, or quits business, sells out, or otherwise disposes of the business, or terminates the business, any tax due shall become due and payable, and such taxpayer shall, within 10 days thereafter, make a return and pay the tax due.
(2) Whenever it appears to the city of La Center that the collection of taxes from any person, association, or organization may be in jeopardy, the city of La Center, after not less than 10 days’ notice to the taxpayer, may require the taxpayer to remit taxes and returns at shorter intervals than monthly, as the city of La Center shall deem appropriate under the circumstances.
(3) Whenever reports required by the Washington State Gambling Commission under the provisions of Chapter 9.46 RCW are required on less than a quarterly basis, any person, association, or organization hereunder shall report to the city of La Center on the same basis.
(4) The gambling tax provided herein on punch board or pull-tabs shall be collected quarterly, on the last business day of January, April, July and October of each year. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.050 Administration and collection of tax.
Administration and collection of the various taxes imposed herein shall be the responsibility of the La Center city clerk/treasurer, under the supervision of the mayor and the city council. Remittance of the amount due shall be accompanied by a completed return form authorized or provided by the city. In addition, the city shall obtain copies of all filings made by the taxpayer to the Washington State Gambling Commission. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.060 Method of payment.
Taxes payable hereunder shall be remitted to the city of La Center on or before the time required, by bank draft, certified check, cashier’s check, personal check, money order, or in cash. If payment is made by draft or check, the tax shall not be deemed paid until the draft or check is honored in the usual course of business, nor shall the acceptance of any sum by the city of La Center be an acquittance or discharge of the tax unless the amount paid is the full amount due. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.070 Failure to make timely payments of tax or fee.
(1) If full payment of any tax or fee under this chapter is not received by the city of La Center on or before the date due, there shall be added to the amount due a penalty fee as follows:
(a) One to 14 days late: 2.5 percent of tax due;
(b) Fifteen to 31 days late: 5 percent of tax due;
(c) Over 31 days late: 10 percent of tax due;
Notwithstanding the foregoing, the penalty shall be waived for the first late tax payment in a calendar year so long as the past-due amount is fully paid within 14 days of the due date. In addition to these penalties, the city may charge the taxpayer interest of one percent of all taxes and fees due for each 30-day period, or portion thereof, during which unpaid taxes remain past due.
(2) Failure to make payment in full of all tax amounts, penalties and interest, within 60 days following the day the tax amount initially became due shall be both a civil infraction and a criminal violation of this section. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.080 Notice of intention to engage in activity to be filed.
In order that the city of La Center may identify those persons who are subject to taxation under this chapter, each person, association, or organization shall file with the city of La Center a sworn “declaration of intent” to conduct an activity taxable under this chapter. The filing shall be made not later than five days prior to conducting or operating the taxable activity or 20 days after the effective date of this chapter if the activity is being conducted prior to its adoption. No fee shall be charged for such filing, which is not for the purpose of regulation of this activity but for the purposes of administration of this chapter only. Failure to timely file shall not excuse any person, association, or organization from any tax liability.
Each person, association, or organization subject to taxation under this chapter shall notify the city within one hour of any permanent closure and not less than two days before any temporary closure of its operations. If the closure is temporary, notification shall include information on the length of closure and the planned reopening date. Notification to the city via email, with return receipt, shall be sufficient for this purpose. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.085 Taxpayer notification of closure.
Those persons who are subject to taxation as a public card room under this chapter shall notify the city within one hour of any permanent closure and not less than two days before any temporary closure of its card room. If the closure is temporary, the notification shall include information on the length of closure and the planned reopening date. Notification to the city via email, with return receipt, shall be sufficient for this purpose. [Ord. 2019-14 § 1 (Exh. 1), 2019.]
5.25.090 Records required.
(1) Each person, association, or organization engaging in an activity taxable under this chapter shall maintain records respecting that activity which truly, completely, and accurately disclose all information necessary to determine the taxpayer’s tax liability hereunder during each base tax period. Such records shall be kept and maintained for a period of not less than three years. In addition, all information and items required by the Washington State Gambling Commission under Chapter 230-08 WAC, and the United States Internal Revenue Service respecting taxation, shall be kept and maintained for the periods required by those agencies.
(2) The premises and paraphernalia, and all books, records and other items required to be kept and maintained under this section and under Chapter 9.46 RCW, and any person, association, or organization receiving profits therefrom or having any interest therein shall be subject to, and immediately made available for, inspection and audit at any reasonable time, with or without notice, upon demand by the city of La Center or its designee for the purpose of determining compliance or noncompliance with this chapter.
(3) A reasonable time for the purposes of this section shall be:
(a) If the items or records to be inspected or audited are located anywhere upon a premises any portion of which is regularly open to the public or members and guests, then at any time when the premises are so open, or at which they are usually open; or
(b) If the items or records to be inspected or audited are not located upon a premises set out in subsection (3)(a) of this section, then any time between the hours of 8:00 a.m. and 9:00 p.m., Monday through Friday.
(4) Where the taxpayer does not keep all of the books, records, or items required to be kept or maintained under this section in this jurisdiction, the taxpayer shall either:
(a) Produce all of the required books, records, or items within the city of La Center for such inspection within five days following a request of the city of La Center to do so; or
(b) Bear the actual cost of the inspection by the city of La Center or its designee, at the location at which such books, records or items are located; provided, that a taxpayer choosing to bear these costs shall pay in advance to the city of La Center the estimated costs thereof, including but not limited to round-trip fare by the most rapid means, lodging, meals, and incidental expenses. The actual amount due, or to be refunded, for expenses shall be determined following said examination of the books, records or items required to be kept or maintained under this section.
(5) A taxpayer who fails, neglects or refuses to produce such books, records or other items, either within or without this jurisdiction, in addition to being subject to other civil and criminal penalties provided by this chapter or otherwise, shall be subject to a jeopardy tax assessment by the city clerk/treasurer.
(6) Said jeopardy tax assessment shall be deemed prima facie correct and shall be the amount of fee or tax owing to the city of La Center by the taxpayer unless the taxpayer can prove otherwise by competent evidence. The taxpayer shall be notified by mail by the city clerk/treasurer of the amount of tax so determined by jeopardy tax assessment, together with any penalty and/or interest, and the total of such amounts shall thereupon become immediately due and payable. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.100 Overpayment or underpayment of tax.
If, upon application by a taxpayer for a refund or an audit of his records, or upon any examination of the returns or records by the city of La Center, it is determined that within five years immediately preceding receipt of the application from the taxpayer for a refund, or an audit, or in the absence of such application, within five years immediately preceding the commencement by the city clerk/treasurer of such examination:
(1) A tax or other fee has been paid in excess of that properly due, the total excess paid over all amounts due to the city within such period of five years shall be credited to the taxpayer’s account or shall be credited to the taxpayer at the taxpayer’s option. No refund or credit shall be allowed with respect to any excess amounts paid more than five years before the date of such application or examination.
(2) A tax or other fee has been paid which is less than that properly due, or no tax or other fee has been paid, the city clerk/treasurer shall mail a statement to the taxpayer showing the balance due, including the tax amount or penalty assessment and fees, and it shall be a separate, additional violation of the provisions of this chapter, both civil and criminal, if the taxpayer fails to make payment in full within 10 calendar days of such mailing. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.110 Failure to make return.
If any taxpayer fails, neglects or refuses to make and file his return as and when required under this chapter, the city clerk/treasurer is authorized to determine the amount of tax payable, together with any penalty and/or interest assessed under the provisions of this chapter, and shall notify the taxpayer by mail of the amount so determined, which amount shall thereupon become immediately due and payable. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.120 Tax additional to others.
The tax herein levied shall be in addition to any license fee or tax imposed or levied under any law or any other ordinance of the city of La Center, except as herein otherwise expressly provided. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.130 Taxes, penalties and fees constitute debt to municipality.
(1) Any tax due and unpaid under this chapter and all penalties or interest shall constitute a debt to the city of La Center, a municipal corporation, and may be collected by court proceedings the same as any other debt in like amount, but shall be in addition to all other existing remedies.
(2) In addition to any tax, penalties or interest due, the taxpayer shall also be liable for reasonable attorney’s fees and audit charges incurred in connection with the collection of the sums owing.
(3) Further, in the event the taxes, penalties and interest owed exceed $5,000, the city may revoke the business license of the taxpayer and close the business establishment until the tax is paid.
(4) Any delinquent tax or penalty due under this chapter, or combination thereof, shall be a lien on the operator’s real and personal property pursuant to RCW 9.46.110 and 84.60.010, which shall attach on the date the tax becomes due and shall relate back and have priority against real and personal property to the same extent as ad valorem taxes. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.140 Limitations on right of recovery.
The right of recovery by the city from the taxpayer for any tax provided hereunder shall be outlawed after the expiration of five calendar years from the date said tax became due. The right of recovery against the city because of overpayment of tax by any taxpayer shall be outlawed after the expiration of five calendar years from the date such payment was made. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.150 Revenue.
Any revenue collected from the taxes imposed hereunder shall be used primarily by the city of La Center for the purpose of the enforcement of the provisions of Chapter 9.46 RCW, the rules and regulations of the Washington State Gambling Commission. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]
5.25.160 Violation – Penalty.
(1) Except as otherwise provided within this chapter, any person, association or organization violating or failing to comply with any of the provisions of this chapter, upon conviction thereof, is guilty of a misdemeanor, and any person, association or organization so convicted shall be punished by a fine not to exceed $500.00, or by punishment in the county jail not to exceed 90 days, or both such fine and imprisonment.
(2) Any taxpayer who engages in, or carries on, any gambling activity subject to a tax hereunder, without having complied with the provisions of this chapter or in violation of any of this chapter, shall be guilty of a violation of this chapter for each day or portion of such day during which the gambling activity is carried on.
(3) For all violations or failures to comply with any of the provisions of statutes, rules and regulations adopted by reference pursuant to LCMC 5.25.010, the penalty shall be as set forth in such statute, rule or regulation adopted by reference. [Ord. 2019-14 § 1 (Exh. 1), 2019; Ord. 2018-02 § 1 (Exh. A), 2018; Ord. 2002-02 § 1, 2002.]