Chapter 3.52UTILITY TAX

Sections:

3.52.010
Exercise of License Revenue Power.
3.52.020
Definitions.
3.52.030
Purpose for Utility Tax Revenues.
3.52.040
Utility Business License.
3.52.050
Utility Businesses Subject to Tax - Amount.
3.52.060
Cellular Telephone Service - Income Allocation and Administration.
3.52.070
Tax Rate Change.
3.52.080
Exemption.
3.52.090
License Tax Year.
3.52.100
Deductions.
3.52.110
Monthly Installments.
3.52.120
Taxpayer's Records.
3.52.130
Applications and Returns Confidential.
3.52.140
Failure to Make Returns or Pay the Tax in Full.
3.52.150
Overpayment of Tax.
3.52.160
Appeal to Hearing Examiner.
3.52.170
False Returns.
3.52.180
Tax Delinquency Unlawful Acts.
3.52.190
Noncompliance - Penalty.
3.52.200
Customer Utility Tax Relief.
3.52.210
Customer Utility Tax Relief Qualifications.
3.52.220
Claim Filing Procedures.
3.52.230
Customer Price Index Changes.
3.52.240
Designated Official to Administer, Make Rules.
3.52.250
Severability.
3.52.010Exercise of License Revenue Power.

The provisions of this Chapter shall be deemed an exercise of the power of the City of Lakewood to tax for revenue. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.020Definitions.

In construing the provisions of this Chapter, the following definitions shall be applied:

A. “Gross income” means the value proceeding or accruing from the sale of any 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, including the amount of credit losses actually sustained by the taxpayer whose regular books or accounts are kept upon an accrual basis.

B. “Cable service” 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City under the Cable Communications Policy Act of 1984 Public Law No. 98-549, 47 U.S.C. § 521, as it may be amended or superseded; or

2. any system that competes directly with such franchised system by employing antennae, microwave, 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 service” shall not include entities that are subject to charges as “Commercial TV Stations” under 47 U.S.C. § 158.

C. “Cellular telephone service” means two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not subject to regulation by the Washington Utilities and Transportation Commission (WUTC). This includes cellular mobile service. The definition of cellular mobile service includes other wireless radio communications services such as specialized mobile radio (SMR), personal communications services (PCS) and any other evolving wireless radio communications technology which accomplishes the same purpose as cellular mobile service.

D. “Competitive telecommunication service” means the providing by any person 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.

E. “Designated official” means such City employee or agent as the City Manager of the City shall designate.

F. “Network telecommunication service” means the providing by any person of access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, or the providing of telephonic, video, data, pagers, or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. “Network telecommunication service” includes interstate service, including 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. “Network telecommunication service” does not include the providing of competitive telecommunication service, the providing of cable television service, nor the providing of broadcast services by radio or television stations.

G. “Telecommunications company” includes every corporation, company, association, joint stock association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, and every city or town owning, operating or managing any facilities used to provide telecommunications for hire, sale, or resale to the general public within this state.

H. “Telecommunication business” means the business of providing network telecommunication service, as defined in this section. It includes cooperative or farmer line telephone companies or associations operating an exchange.

I. “Telecommunication service” means competitive telecommunication service or network telecommunication service, or both, as defined in this section (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.030Purpose for Utility Tax Revenues.

The revenue generated by the tax established pursuant to the provisions of this Chapter shall be used solely for public safety and transportation needs of the City. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.040Utility Business License.

No person, firm or corporation shall engage in or carry on any business, occupation or act or privilege for which a tax is imposed by Section 3.52.050 of this Chapter without first having obtained, and being the holder of a business license as provided in Title 5 of the Lakewood Municipal Code. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.050Utility Businesses Subject to Tax - Amount.

There are 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, utility business occupation taxes in the amounts to be determined by the application of rates given against gross income as follows:

A. Upon everyone engaged in and carrying on a telegraph business, a tax equal to 6.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due;

B. Upon everyone engaged in or carrying on a competitive telecommunication service or network telecommunication service, a tax equal to 6.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due. In determining gross income from such business, including intrastate toll service, the taxpayer shall include 100 percent of the gross income received from such business in the City;

C. Upon everyone engaged in or carrying on the business of cellular telephone service, a tax equal to 6.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due;

D. Upon everyone engaged in or carrying on the business of selling, brokering or furnishing artificial, natural or mixed gas for domestic, business or industrial consumption, a tax equal to 5.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due;

E. Upon everyone engaged in or carrying on the business of selling or furnishing electric energy, a tax equal to 5.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due, PROVIDED, this tax shall not apply to any entity engaged in or carrying on the business of selling or furnishing electric energy on which there is already imposed a tax on the business of selling or furnishing electric energy levied by and paid to any other municipality of the State of Washington organized under the provisions of Title 35 RCW or Title 35A RCW;

F. Upon everyone engaged in or carrying on the business of cable communications, a fee or tax equal to 6.0 percent of the total gross income, not including the amount of the tax, from gross subscriber revenues in the City during the period for which the fee or tax is due. For purposes of this Chapter, “gross subscriber revenues” means and includes those revenues derived from the supplying of subscription services, that is, installation fees, disconnect and reconnect fees, fees for regular cable benefits including the transmission of broadcast signals and access and origination channels and per-program or per-channel charges; it does not include leased channel revenue, advertising revenue, or any other income derived from the system:

G. Upon the City with respect to its conducting, maintaining and/or operating any municipal storm water management program or utility that it operates, or may operate in the future, as a public utility a tax of 6.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due.

H. Upon the City with respect to its conducting, maintaining and/or operating any municipal garbage collection service or utility that it operates, or may operate in the future as a public utility, a tax of 6.0 percent of the total gross income, not including the amount of the tax, from such business in the City during the period for which the tax is due. (Ord. 290 § 1, 2002; Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.060Cellular Telephone Service - Income Allocation and Administration.

A. Allocation of income.

1. Service address. Payments by a customer for cellular telephone service from telephones without a fixed location shall be allocated among taxing jurisdictions to the location of the customer’s principal service address during the period for which the tax applies.

2. Presumption. There is a presumption that the service address a customer supplies to the taxpayer is current and accurate, unless the taxpayer has actual knowledge to the contrary.

3. Roaming. When the cellular telephone service is provided while a subscriber is roaming outside the subscriber’s normal cellular network area, the gross income shall be assigned consistent with the taxpayer’s accounting system to the location of the originating cell site of the call, or to the location of the main cellular switching office that switched the call.

B. Authority of administrator. The City Manager or his or her designee is authorized to represent the City in negotiations with other cities for the proper allocation of cellular telephone service taxes imposed pursuant to this Chapter. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.070Tax Rate Change.

No change in the rate of tax imposed by Section 3.52.050 shall apply to business activities occurring before the effective date of the change and, except for a change in the tax rate authorized by RCW 35.21.870, no change in the rate of the tax may take effect sooner than 60 days following the enactment of the ordinance establishing the change. The designated official shall send to each affected business at the address of record a copy of any ordinance changing the rate of tax promptly upon its enactment. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.080Exemption.

The tax herein levied is in lieu of any excise, privilege or occupational tax under any Chapters of this Title with respect to activities specifically within the provisions of this Chapter. Nothing herein shall be construed to exempt persons taxable under the provisions of this Chapter from tax under any other Chapters of this Title with respect to activities other than those specifically within the provisions of this Chapter. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.090License Tax Year.

All utility occupation licenses and the fee for the tax therefor shall be for the tax year for which issued and shall expire at the end of the tax year. The tax year shall commence January 1 and shall end on December 31. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.100Deductions.

In computing the tax imposed by this Chapter, the following items may be deducted from the measure of the tax:

A. The amount of credit losses actually sustained by taxpayers whose regular books are kept upon an accrual basis.

B. Charges by a taxpayer engaging in a telephone business to a telecommunications company for telephone service that the purchaser buys for the purpose of resale.

C. That portion of the gross income derived from charges to another telecommunications company for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services.

D. Adjustments made to a billing or to a customer account or to an accrual account in order to reverse a billing or charge that had been made as a result of third-party fraud or other crime and was not properly a debt of the customer.

E. Amounts derived from a business which the City is prohibited from taxing under the Constitution of this state or the Constitution or laws of the United States.

F. Grants from governmental agencies. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.110Monthly Installments.

The tax imposed by Section 3.52.050 of this Chapter shall be due and payable in monthly installments, and remittance therefor shall be made on or before the last day of the month following the end of the monthly period in which the tax is accrued. On or before said due date, the taxpayer shall file with the designated official a written return upon such form and setting forth such information as the designated official shall reasonably require, together with the payment of the amount. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.120Taxpayer's Records.

Each taxpayer shall keep records for up to six years reflecting the amount of his or her gross operating revenues on services within the City, and such records shall be open at all reasonable times to inspection by the designated official, or his or her duly authorized subordinates, for verification of said tax returns or for the filing of the tax of a taxpayer who fails to make such return, or for other appropriate uses. Where necessary, and in addition to other remedies provided for herein, the City's designated official or his or her agent may fix a time and place for an investigation of the correctness of any return and may issue a subpoena to the taxpayer or any other person, to attend upon such investigation and there testify, under oath in regard to the matters inquired into and may, by subpoena, require the taxpayer or any other person to bring with him or her such books, records and papers as my be required by the designated official. (Ord. 374 § 1, 2005; Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.130Applications and Returns Confidential.

The applications, statements or returns made to the designated official pursuant to this Chapter shall not be made public, nor shall they be subject to the inspection of any person except the City Manager, City Attorney, designated official or authorized agent and to the Mayor and members of the City Council; and it is unlawful for any person to make public or inform any other person as to the contents of or any information contained in or to permit inspection of any application or return; provided, however, that the foregoing shall not be construed to prohibit the designated official from making known or revealing names, addresses and telephone numbers of utilities operating within the City, facts or information contained in any return to any taxpayer or disclosed in any investigation or examination of the taxpayer’s books or records to the State Department of Revenue, for official purposes, but only if the statutes of the state grant substantially similar privileges to the proper officers of the City. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.140Failure to Make Returns or Pay the Tax in Full.

If any taxpayer fails, neglects or refuses to make its return as and when required herein the designated official is authorized to determine the amount of tax payable, and by mail to notify such taxpayer of the amount so determined. The amount so fixed shall thereupon be the tax and be immediately due and payable, together with penalty and interest. Delinquent taxes, including any penalty and interest, are subject to an interest charge of 12 percent per year on any unpaid balance from the date the tax became due as provided in Section 3.52.110 of this Chapter until paid. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.150Overpayment of Tax.

Any money paid to the City through error, or otherwise not in payment of the tax imposed by this Chapter, or in excess of such tax, shall, upon the request of the taxpayer, be credited against any tax due or to become due from such taxpayer hereunder, or, upon the taxpayer ceasing to do business in the City, be refunded to the taxpayer. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.160Appeal to Hearing Examiner.

Any taxpayer aggrieved by the amount of the fee or tax determined by the designated official to be due under the provisions of this Chapter may appeal such determination to the City hearing examiner in accordance with, and subject to the procedures set forth in Chapter 1.36 of the Lakewood Municipal Code or such subsequent superseding procedures as may be adopted by ordinance, provided that in such appeal hearing, the hearing examiner shall receive and examine available information, conduct public hearings, prepare records and reports thereof, and make decisions, which shall be final and conclusive. Pending a hearing, a taxpayer may withhold the fee or tax determined by the designated official. If the tax or fee is withheld, the taxpayer shall pay such amount to the City with interest from the date the amount was withheld. The designated official shall periodically set the applicable interest rate for withholding. ( (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.170False Returns.

It is unlawful for any person subject to this Chapter 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 to testify falsely upon any investigation of the correctness of a return upon the hearing of any appeal or in any manner hinder or delay the City or any of its officers in carrying out the provisions of this Chapter. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.180Tax Delinquency Unlawful Acts.

Delinquent Penalties and Interest. For each payment due, if such payment is not made by the due date thereof, in addition to any other remedies available under the law, there shall be added penalty and interest as follows:

A. If paid one (1) to ten (10) days late, there shall be a penalty of ten percent (10%) added to the amount of tax due.

B. If paid eleven (11) to twenty (20) days late, there shall be a penalty of fifteen percent (15%) added to the amount of tax due.

C. If paid twenty-one (21) to thirty (30) days late, there shall be a penalty of twenty percent (20%) added to the amount of tax due.

D. If paid more than thirty (30) days late, there shall be a penalty of twenty-five percent (25%) added to the amount of tax due.

E. In addition to the above penalty, the City of Lakewood shall charge the taxpayer interest on all taxes and delinquent penalties due at the rate of one percent per month or the portion thereof that said amounts are past due.

F. The tax imposed by this chapter, and all penalties and interest thereon, shall constitute a debt to the City of Lakewood, and may be collected by court proceedings in the same manner as any other debt which remedy shall be in addition to all other available remedies. Any judgment entered in favor of the City of Lakewood may include an award to the City of Lakewood of all court and collection costs including attorneys’ fees to the extent permitted by law. Amounts delinquent more than 60 days may be assigned to a third party for collection, in which case the amount of any collection charges shall be in addition to all other amounts owed. Amounts due shall not be considered paid until the City of Lakewood has received payment for the full amount due or has discharged the amount due and not paid. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.190Noncompliance - Penalty.

Any person, firm or corporation subject to the provisions of this Chapter, who fails or refuses to apply for a business license for a business to which the provisions of this Chapter apply, or to make tax returns or to pay any tax when due, or who makes any false statement or representation in or in connection with any tax return or any application for a business license or tax return, or who otherwise violates or refuses to comply with any provision of this Chapter, is guilty of a misdemeanor, and each such person, firm or corporation is guilty of a separate offense for each and every day or portion thereof during which any violation of any of the provisions of this Chapter is committed, continued or permitted, and upon conviction of any such violation, such person shall be punishable by a fine not to exceed $1,000.00 for each day or portion thereof which such person, firm or corporation is found guilty of noncompliance with the provisions of this Chapter. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.200Customer Utility Tax Relief.

There is granted to persons who meet the qualifications and requirements of Sections 3.52.210 and 3.52.220 of this Chapter relief from the utility business tax of the City as follows:

A. For all billings paid directly or indirectly by the person during a calendar year for service charges to any entity or organization which paid the utility business tax of the City, the City is authorized to pay to such person a “reimbursement” in a maximum amount determined in accordance with Paragraph B, below; provided, that the total amount of all reimbursements paid pursuant to this subsection shall not exceed the total dollar amount established through the budget process.

B. The amount of maximum relief available under Paragraph A, above, for any calendar year is ten dollars ($10.00) for utility taxes paid for each of the following utilities (1) electric, (2) natural gas and (3) telephone, with a combined total for all three named not to exceed $30.00; Provided that the amount of the relief shall not to exceed the amount of utility business taxes actually paid to the City for the named utilities. The amount of the maximum relief may be adjusted for subsequent years in accordance with the provisions of Section 3.52.230 of this Chapter. The amount of relief shall be pro-rated on a monthly basis for each month that the customer was a resident of the City, and for which the customer qualified for the relief as set forth in Section 3.52.210 of this Chapter, and was paying the tax. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.210Customer Utility Tax Relief Qualifications.

To qualify for the relief set forth in Section 3.52.200 of this Chapter, a person must file a request for tax relief and reimbursement of the amount allowable of the City utility occupation taxes imposed in the current year on the form approved by the City, and must:

A. Meet one of the following criteria:

1. Be 62 years of age or older at all times during any period for which “reimbursement” is requested; or

2. Be permanently disabled under the definitions of subsections (2) or (3)(A), (3)(B) or (3)(C) of 42 U.S.C. § 1382c(a) and receiving funds from a disability program such as Supplemental Security Income, Social Security Disability Insurance or Disabled Veterans payments; and must:

B. Have an income during the calendar year for which a “reimbursement” is requested from all sources whatsoever, not exceeding 50 percent of the median income level for such calendar year for the Primary Metropolitan Statistical Area (PMSA) per household for the Seattle-Tacoma area, as published by the Secretary of Housing and Urban Development. If the annual update of the PMSA is not available, the median income level shall be determined by adjusting the prior year median income level in accordance with Section 3.52.230 of this Chapter. As used in this subsection, “income” means:

1. “Disposable income,” as that term is defined in RCW 84.36.383, as it may be amended or replaced from time to time, plus

2. The aggregate value of all gifts received during the calendar year for which a “reimbursement” is requested, excluding the first $5,008.69 thereof. The aggregate value of gifts excludable from income as provided in this section shall be adjusted for the calendar year 2000 and each subsequent calendar year in accordance with Section 3.52.230 of this Chapter; and means:

C. Have been a resident of the dwelling unit within the City at all times during any period for which a reimbursement is requested, and have contributed to the payment of City utility tax charges from his or her income or resources. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.220Claim Filing Procedures.

A. All requests for tax relief under Sections 3.52.200 and 3.52.210 of this Chapter must be filed with the City or its agent no later than the date established by the designated official for the calendar year for which “reimbursement” is requested.

B. The designated official shall adopt rules and procedures for the filing of reimbursement claims, and for the administration of Sections 3.52.200, 3.52.210 and 3.52.220 of this Chapter. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.230Customer Price Index Changes.

The amount of the maximum relief established under Section 3.52.200 of this Chapter, and the aggregate value of gifts, subsidies and benefits excludable from income under Section 3.52.210 of this Chapter, and the median income level figure utilized when the Primary Metropolitan Statistical Area (PMSA) per household for the Seattle-Tacoma area update is not available, shall be periodically reviewed up to one time per year for adjustment based upon recommendations by the designated official and the City Manager to reflect any change in the cost of living, which adjustment, together with supporting documentation, shall be subject to review and approval by the City Council, and any such approval shall be set forth in an ordinance or resolution duly adopted or passed by the City Council. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.240Designated Official to Administer, Make Rules.

The designated official shall have the power to construe, interpret, administer and enforce the provisions of this Chapter, and shall further have the power, and it shall be his or her duty, from time to time, to adopt, publish and enforce rules and regulations not inconsistent with this Chapter or with the law for the purpose of implementing, interpreting and carrying out the provisions thereof, and it is unlawful to violate or fail to comply with any such rule or regulation. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)

3.52.250Severability.

If any provision of this Chapter or the application thereof to any person or circumstance is held to be invalid, the remainder of such Chapter and its provisions and regulations or the application thereof to other person or circumstances shall not be affected. (Ord. 253 § 1 (part), 2000; Ord. 215 § 1 (part), 1999.)