Chapter 3.16
UTILITY TAX
Sections:
3.16.020 Business license requirements.
3.16.070 Due and payable when.
3.16.110 Administration and enforcement.
3.16.150 Cellular telephone service – Income allocation and administration.
3.16.010 Authorization.
The provisions of this chapter shall be deemed to be an exercise of the power of the city to license and tax for revenue. (Ord. 768, 1998)
3.16.020 Business license requirements.
No person, firm, corporation, or legally recognized entity shall engage in or carry on any business, occupation, act or privilege for which a tax is imposed by Section 3.16.040 without first having obtained, and being the holder of, a license so to do, to be known as a business license. 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 or her to administer and enforce this chapter; and, upon acceptance of such application by the clerk, he or she shall thereupon issue such license to the applicant. Such business license shall be personal and nontransferable and shall be valid as long as the licensee continues in said business, and complies with this chapter, and renews it in accordance with Chapter 5.04. (Ord. 768, 1998)
3.16.030 Definitions.
“Cable television services” means the one-way transmission of video programming and associated nonvideo signals to subscribers together with subscriber interaction, if any, which is provided in connection with video programming.
“Cellular telephone service” means a two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not currently 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 a purpose similar to cellular mobile service.
“Competitive telephone 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 RCW Title 80 and for which a separate charge is made.
“Gross proceeds of sale” or “gross income of the business” means the value proceeding or accruing from the sale of tangible personal property and/or for services rendered, without any deduction on account of the cost of property sold, the cost of materials used, labor costs, interest, discount paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without deduction on account of loss. Tangible personal property and/or services rendered may include gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property 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, except as otherwise authorized in this chapter. In determining gross income from a telephone business, including intrastate toll telephone service, the taxpayer shall include 100 percent of the gross income derived from such business in the city.
“Network telephone service” means the business of providing access to a local telephone network, local telephone network switching service, toll service, or coin telephone service, or the providing of telephonic, video, data, or similar communication or transmission for hire, via a local telephone network, toll line or channel, or similar communication or transmission system. “Network telephone service” includes interstate service, including toll service, originating from or received on telecommunication equipment or apparatus in this state if the charge for the service is billed to a person in this state. “Network telephone service” does not include the providing of competitive telephone service, the providing of cable television service or the providing of broadcast services by radio or television stations.
“Telephone business” means the business of providing network telephone service, as defined in this section. It includes cooperative or farmer line telephone companies or associations operating an exchange. (Ord. 768, 1998)
3.16.040 Tax levied.
A tax is to be collected from and imposed upon the gross income of every person, firm, corporation or other entity engaged in carrying on the following types of businesses whether said business activity is within or partly within the corporate limits of the city. Said tax being for the privilege of being allowed to do business in the city. Said tax is hereby levied on the following businesses:
A. Telephone business. Gross income for this purpose shall not include charges which are passed on to the subscribers by a telephone business pursuant to tariffs required by regulatory order to compensate for the cost to the business of tax imposed by this chapter.
B. The sale, delivery or distribution of electricity, electrical energy and for the privilege of carrying on said business. Said tax is to be based on the total gross income from such business in the city; provided, however, that there shall not be any tax levied for installation charges of electrical units.
C. Cable television service. The business of furnishing community antenna television (cable television) services in the city.
D. The business of collecting, handling or transporting garbage and refuse within the city.
E. Cellular telephone business or service.
F. The sale, delivery, distribution or furnishing of water for domestic, business or industrial consumption and for the privilege of carrying on said business service in the city; provided, that as to the city in the operation of its water utility, such tax shall be applicable to the gross income derived from the sale, delivery, distribution or furnishing of water for domestic, business or industrial consumption located within or outside the city; provided, however, that there shall not be any tax levied for installation charges or hook-up fees.
G. The business of sewer collection and treatment; provided, however, that there shall not be any tax levied for installation charges or hook-up fees.
H. The maintenance and operation of a storm and surface water drainage system. (Ord. 941, 2010; Ord. 768, 1998)
3.16.050 Deductions.
There shall be excluded from the total gross income upon which the tax is computed the following:
A. The amount of credit losses 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 Constitutions of the United States or the state;
C. That portion of the gross income derived from charges to another telecommunications business, as defined in 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, interstate services;
D. Charges by a taxpayer engaging in a telephone business to a telecommunications company, as defined in RCW 80.04.010, for telephone service that the purchaser buys for the purpose of resale;
E. Adjustments made to a billing or to a customer account or to a telecommunications business 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 a customer;
F. Charges to cellular telephone service subscribers passed on to compensate for the cost to the company of the tax imposed by this chapter;
G. That portion of gross income derived from revenues deposited into pay telephone and other coin- or currency-operated telecommunications apparatus. (Ord. 768, 1998)
3.16.060 Tax rate.
The tax rate imposed on the gross income from conducting an electrical energy, natural gas, cable television service, telephone, cellular phone, garbage or refuse disposal, water, sewer or storm sewer business/services shall be six percent. (Ord. 768, 1998)
3.16.070 Due and payable when.
The tax imposed by Section 3.16.060 shall be due and payable not less than quarterly on the fifteenth day of April, July, October and January of each year. On or before such due date, the taxpayer shall file with the city clerk-treasurer a written return upon such form and setting forth such information as the clerk shall reasonably require, together with payment of the amount of the tax. (Ord. 768, 1998)
3.16.080 Record of income.
Each taxpayer shall keep records reflecting the amount of his/her gross operating income, and such records shall be open at all reasonable times to the inspection of the city clerk-treasurer, or his/her duly authorized subordinates, for verification of said tax returns or for the fixing of the tax of a taxpayer who fails to make such returns. (Ord. 768, 1998)
3.16.090 Failure to pay.
If any person, firm, business or corporation subject to this chapter fails to pay any tax required by this chapter within 30 days after the due date thereof, there shall be added to such tax a penalty of 10 percent of the amount of such tax, 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. 768, 1998)
3.16.100 Overpayment.
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 this chapter or, upon the taxpayer’s ceasing to do business in the city, be refunded to the taxpayer. (Ord. 768, 1998)
3.16.110 Administration and enforcement.
The city clerk-treasurer 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 this chapter. (Ord. 768, 1998)
3.16.120 Violation – Penalty.
Any person, firm, or corporation subject to this chapter who fails or refuses to apply for a business license or to make said tax returns or to pay said tax when due, or who makes any false statement or representation in or in connection with any such application for a business license or such tax return, or otherwise violates or refuses or fails to comply with this chapter, shall be guilty of a misdemeanor. (Ord. 768, 1998)
3.16.130 Budget allocation.
Tax revenues received from the ordinance codified in this chapter shall be allocated to the general fund. (Ord. 941, 2010; Ord. 768, 1998)
3.16.140 Rate change.
No change in the rate of tax shall apply to business activities occurring before the effective date of the change in the tax rate authorized by RCW 35.21.870, and 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 city clerk-treasurer shall send to each utility service company, at the address on its license, a copy of any ordinance changing the rate of tax upon such utility service promptly upon its enactment. (Ord. 768, 1998)
3.16.150 Cellular telephone service – Income allocation and administration.
A. Service Address. Payments by a customer for the 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.
B. 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.
C. 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.
D. Dispute Resolution. If there is a dispute between or among the city and another city or cities as to the service address of a customer who is receiving cellular telephone services and the dispute is not resolved by negotiation among the parties, then the dispute shall be resolved by the Association of Washington Cities (AWC). Once taxes on the disputed revenues have been paid to one of the contesting cities, the cellular telephone service business shall have no further liability with respect to additional taxes, penalties, or interest on the disputed revenues so long as it promptly changes its billing records for future revenues to comport with the settlement facilitated by AWC.
E. Authorized Official. The city clerk-treasurer or his/her appointed designee is authorized to represent the city in negotiations with other cities for the proper allocation of taxes due under this section. (Amended during 2013 reformat; Ord. 768, 1998)