Chapter 3.11
UTILITIES TAX
Sections:
3.11.035 Water and sewer service providers exempt with current franchise.
3.11.040 Cellular telephone service – Income allocation and administration.
3.11.080 Quarterly installments.
3.11.100 Applications and returns confidential.
3.11.110 Failure to make returns or to pay the tax in full.
3.11.120 Penalty for delinquent payment.
3.11.140 Noncompliance – Penalty.
3.11.160 Designated official to make rules.
3.11.010 Purpose and effect.
The provisions of this chapter shall be deemed an exercise of power of the city to tax for revenue. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.020 Definitions.
Unless the context clearly indicates otherwise, the words, phrases and terms used in this chapter shall have the following meanings:
(1) “Gross income” means the value proceeding or accruing from the sale of 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.
(2) “Cable service” means:
(a) A system of 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under the Cable Communications Policy Act of 1984 Public Law No. 98-549, 47 U.S.C. Section 521, as it may be amended or superseded; and
(b) Any system that competes directly with such franchised system by employing antennas, microwaves, wires, waveguides, coaxial cables, or other conductors, equipment or facilities designed, construed or used for the purpose of:
(i) Collecting and amplifying local and distant broadcast television signals and distributing and transmitting them;
(ii) Transmitting original cable cast programming not received through television broadcast signals; or
(iii) 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. Section 158.
(3) “Cellular telephone service” means two-way voice and data telephone/telecommunications systems 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.
(4) “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 RCW Title 80 and for which a separate charge is made.
(5) “Designated official” means such city employee or agent as the city manager shall designate.
(6) “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 competitive telecommunication service, the providing of cable television service, or the providing of broadcast services by radio or television stations.
(7) “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.
(8) “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.
(9) “Solid waste” means garbage, trash, rubbish or other materials discarded as worthless or not economically viable for further use. The term does not include hazardous or toxic waste, and does not include yard waste or material collected primarily for recycling or salvage.
(10) “Recycling” means any material collected primarily for recycling or salvage.
(11) “Yard waste” means grass clippings, leaves, prunings, brush, garden material, weeds and certain limited size tree limbs and branches. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.030 Tax levied.
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 taxes in the amounts to be determined by application of rates given against gross income as follows:
(1) Upon everyone engaged in or carrying on competitive telecommunication service or network telecommunication service, a tax equal to six percent of the total gross income from such business in the city during the period for which 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;
(2) Upon everyone engaged in or carrying on the business of cellular telephone service, a tax equal to six percent of the total gross income from such business in the city during the period for which the tax is due;
(3) Upon everyone engaged in or carrying on the business of selling, brokering or furnishing natural gas for domestic, business, or industrial consumption, a tax equal to six percent of the total gross income from such business in the city during the period for which the tax is due;
(4) Upon the city or anyone else engaged in or carrying on the business of furnishing sewer services for commercial, industrial, or domestic use or purpose, a tax equal to eight percent of the total gross income from such business in the city during the period for which tax is due;
(5) Upon everyone engaged in or carrying on the business of selling or furnishing electric energy, a tax equal to six percent of the total gross income from such business in the city during the period for which the tax is due;
(6) Upon everyone engaged in the business of collecting solid waste, a tax equal to six percent of the total gross income from the city during the period for which the tax is due;
(7) Upon the city or anyone else in respect to the conduct, maintenance, and operations of its municipal recycling and yard waste collection service as a public utility, tax equal to six percent of the total gross income from such business in the city during the period for which tax is due;
(8) Upon the city or anyone else in respect to the conduct, maintenance, and operations of its municipal stormwater utility, a tax equal to eight percent of the total gross income from such business in the city during the period for which the tax is due;
(9) Upon everyone engaged in or carrying on the business of selling or furnishing cable service, a tax equal to six percent of the total gross income from such businesses in the city during the period for which the tax is due;
(10) Upon everyone engaged in or carrying on the business of selling or furnishing water services for commercial, industrial, or domestic use or purpose, a tax equal to eight percent of the total gross income from such business within the city during the period for which the tax is due. (Ord. 1032 §§ 2, 3, 2021; Ord. 918 § 1, 2015; Ord. 900 § 1, 2013; Ord. 882 § 1, 2012; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.035 Water and sewer service providers exempt with current franchise.
Water and sewer service providers holding a current, unexpired franchise with the city, and currently paying at least a six percent franchise fee, shall be exempt from the requirements of NPMC 3.11.030. (Ord. 1032 § 4, 2021).
3.11.040 Cellular telephone service – Income allocation and administration.
(1) Allocation of Income.
(a) 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.
(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.
(2) Authority of Administrator. The designated official is authorized to represent the city in negotiations with other cities for proper allocation of cellular telephone service taxes imposed pursuant to this chapter. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.050 Tax rate change.
Pursuant to RCW 35.21.865, no change in the rate of tax imposed by NPMC 3.11.030 for electrical energy, natural gas, or telephone business 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 for electrical energy, natural gas, or telephone business may take effect sooner than 60 days following the enactment of the ordinance establishing the change. (Ord. 900 § 2, 2013; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.060 Exemption.
Repealed by Ord. 900. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.070 Tax year.
The tax year shall commence January 1st and shall end on December 31st. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.080 Quarterly installments.
The tax imposed by NPMC 3.11.030 shall be due and payable in quarterly installments. Remittance shall be made on or before the last day of the month following the end of the quarter (April, July, October and January) in which the tax is accrued. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.090 Taxpayer’s records.
Each taxpayer shall keep records for up to six years reflecting the amount of gross operating revenues on services within the city, and such records shall be open at all reasonable times to the inspection of the designated official for verification of said tax returns or for the filing of the tax of a taxpayer who fails to make such a return. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.100 Applications 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 city administration, the city attorney and to 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. Pursuant to RCW 35.102.145, return and tax information are subject to disclosure in the manner provided by RCW 82.32.330. (Ord. 900 § 4, 2013; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.110 Failure to make returns or to 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 becomes due as provided in NPMC 3.11.080 until paid. (Ord. 900 § 5, 2013; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.120 Penalty for delinquent payment.
If any person, firm or corporation subject to this tax fails to pay any tax required by this chapter within fifteen 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 which is 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. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.130 Overpayment of tax.
Tax payment within two years 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 written application by the taxpayer that is supported by evidence, 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; provided, that the designated officer is able to reasonably determine that within two years immediately preceding the receipt of said application, tax has been paid in error or in excess of that properly due. (Ord. 900 § 6, 2013; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.140 Noncompliance – Penalty.
Any person, firm or corporation subject to this chapter, who fails or refuses to make returns or to pay any tax when due, or who makes any false statement or representation in or in connection with a tax return, or who violates or refuses to comply with this chapter, is guilty of a civil infraction and 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 provisions of this chapter is committed, continued, or permitted, and upon conviction of any such civil infraction, such person shall be punishable by a fine not to exceed $350.00 for each day or portion thereof which such person, firm or corporation is found guilty of noncompliance with the provisions of this chapter. (Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.150 Appeal.
(1) 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, or aggrieved by the amount of overpayment credit or refund determined by the designated official, may appeal such determination to the hearing examiner. The appeal must be made within 14 days of the designated official’s determination. The taxpayer shall bear the burden of proving that the amount of the fee, tax, overpayment credit, or refund determined by the designated official was in error. The decision of the hearing examiner shall be final. Any appeal of the hearing examiner’s decision shall be made to King County superior court within 14 days of the decision.
(2) Pending final disposition of an appeal, a taxpayer may withhold the fee or tax determined by the designated official. If the tax or fee is withheld and the tax is determined to be due, the taxpayer shall pay such amount to the city with interest from the date the amount is withheld. The designated official shall periodically set the applicable interest rate. (Ord. 918 § 2, 2015; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.160 Designated official to make rules.
The designated official shall have the power to adopt, publish and enforce rules and regulations not inconsistent with this chapter or with the law for the purpose of carrying out the provisions thereof. (Ord. 900 § 7, 2013; Ord. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).
3.11.170 False 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 or 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. 678 §§ 1, 2, 2000; Ord. 667 § 1, 1999).