Chapter 3.71
UTILITY TAXES1
Sections:
3.71.030 Business license required – Businesses subject to utility tax.
3.71.040 Utility tax and tax rates.
3.71.050 Monthly returns and payment.
3.71.060 Books and records – Inspection and confidentiality.
3.71.070 Investigation of returns.
3.71.080 Over- or underpayment.
3.71.090 Penalty for delinquent payment.
3.71.100 Failure to make return.
3.71.130 Allocation of utility tax to the creative arts fund.
3.71.140 Rules and regulations.
3.71.010 Purpose.
The provisions of this chapter shall be deemed to be an exercise of the power of the city of Oak Harbor to license for revenue, as authorized by RCW 35A.82.020, and other applicable state law. In addition to the license fees provided in OHMC Title 5, there is hereby levied upon and shall be collected from the business enterprises engaged in certain business activities and occupations described in this section taxes in the amounts to be determined by the application of the rates herein stated against gross income. In computing said tax the business enterprise may deduct in computing gross income the actual amount of credit losses and uncollectibles sustained by the business enterprise, and 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. 1896 § 2, 2020).
3.71.020 Definitions.
For purposes of this chapter, the following definitions shall be applied. Words in the singular number shall include the plural, and the plural shall include the singular.
(1) “Business” includes all activities engaged in with the object of gain, benefit, or advantage to the taxpayer or to another person or class, directly or indirectly.
(2) “Cellular telephone service” means a one- or two-way telecommunications system used to transmit voice and/or data-based signals or content 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, pager services, 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. Cellular telephone service shall not include competitive telephone service, cablevision service, non-broadcast television or radio.
(3) “Competitive telephone service” means the providing by any person of telephone telecommunications equipment, or apparatus, or service related to that equipment or apparatus such as repair or maintenance service, if the equipment or apparatus is (other than toll service which 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. Transmission of communications through cellular telephones is classified as “telephone business” rather than “competitive telephone service.”
(4) “Director” shall mean the finance director of the city of Oak Harbor or his/her designee.
(5) “Gross income of the business” means the value proceeding or accruing by reason of the transaction of the business engaged in and includes 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.
(6) “Person” means any individual, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint venture, club, company, joint stock company, business trust, municipal corporation, political subdivision of the state of Washington, corporation, limited liability company, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise, and the United States or any instrumentality thereof.
(7) “Taxpayer” means any “person,” as herein defined, required to have a business license under this chapter or liable for the collection of any tax or fee under this chapter, or who engages in any business or who performs any act for which a tax or fee is imposed by this chapter.
(8) “Tax year” or “taxable year” means the 12-month period commencing January 1st and ending December 31st of the same year.
(9) “Telephone business” means the business of providing access to a local telephone network, local telephone network switching service, toll service, coin telephone service, or providing 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. It includes cooperative or farmer line telephone companies or associations operating an exchange. “Telephone business” does not include the providing of competitive telephone service, cable television service, nor broadcast television or radio. (Ord. 1896 § 2, 2020).
3.71.030 Business license required – Businesses subject to utility tax.
(1) License Required. No person shall engage in or carry on any business, occupation, pursuit or privilege for which a tax is imposed by this chapter without first having obtained, and being the holder of, a valid and subsisting business license issued pursuant to OHMC Title 5, and paying applicable license fees, including taxes imposed in this chapter.
(2) Utility Taxes. In addition to the business license fees in OHMC Title 5, there is hereby levied upon all persons engaged in business activities taxable under this chapter a utility tax in the amount to be determined by the application of the respective rates against gross income of such taxpayer. Taxpayers engaged in or carrying on the business shall be charged with collection of the tax as a condition of doing business, and the tax shall be levied thereafter upon their subscribers at the rate set forth below and in proportion to their contribution to gross income as defined by this chapter. (Ord. 1896 § 2, 2020).
3.71.040 Utility tax and tax rates.
(1) Telephones. Upon every person engaged in or carrying on a telephone business, a tax equal to six percent of the total gross income, including revenues for intrastate toll, derived from the operation of such business within the city.
(2) Gas. Upon every person engaged in or carrying on the sale of artificial, natural or mixed gases, a tax equal to six percent of the total gross income derived from the operation of such business within the city.
(3) Electrical Power. Upon every person engaged in or carrying on the sale of electrical power, a tax equal to six percent of the total gross income derived from such business within the city.
(4) Cellular Telephones. Upon every person engaged in or carrying on the sale of cellular telephone service, a tax equal to six percent of the total gross income derived from the operation of such business within the city.
(5) Water Suppliers. Upon every person, including the city, engaged in or carrying on the business of selling or furnishing water for domestic or commercial purposes, a tax equal to six and one-quarter percent of the total gross income from such activity, such tax to be paid covering each month’s business activity. Such tax shall be applicable to the extraterritorial revenues of such businesses if their principal place of business and most of the business activity are situated within the corporate limits of Oak Harbor and if the system which generates the extraterritorial revenue is interconnected with a portion of the system located within the city and at least 60 percent of the total system (by value) is located within the city of Oak Harbor.
(6) Sewer Collection and Treatment. Upon every person, including any sewer utility, engaged in or carrying on the business of collecting and treating sewer waste within the city, a tax equal to six and one-quarter percent of the total gross income from such activities, such tax to be paid covering each month’s business activities.
(7) Solid Waste Collection. Upon every person engaged in or carrying on the business of collecting and transporting solid waste as defined in OHMC Title 15, a tax equal to six and one-quarter percent of the total gross income from such activities, such tax to be paid covering each month’s business activities.
(8) Storm Water Collection. Upon every person engaged in or carrying out the business of collecting or treatment of water within the city, a tax equal to six percent of the total gross income from such activities, such tax to be paid covering each month’s business activities. (Ord. 1896 § 2, 2020).
3.71.050 Monthly returns and payment.
(1) On or before the thirtieth day of each month, each taxpayer shall remit payment for the preceding month’s utility tax, accompanied by a monthly statement showing the manner in which the monthly payment is calculated. The monthly statement shall be upon a form provided by the director and shall contain such information as may be necessary to enable the director to arrive at the lawful amount of the tax. The taxpayer shall, in a legible manner, provide all information required by the director on such returns, shall sign the same, and by affidavit shall swear or affirm that the information therein given is full and true and that the taxpayer knows the same to be so.
(2) Monthly returns shall be accompanied by a remittance by bank draft, certified check, cashier’s check or money order, payable to the city of Oak Harbor, or in cash, in the amount of the fee or tax owed, including all delinquencies and installments. Credit card payment may be made by phone to the finance/utility office.
(3) Payment made by draft or check shall not be deemed a payment of the fee or tax unless and until the same has been honored in the usual course of business, nor shall acceptance of any such check or draft operate as an acquittance or discharge of the fee or tax unless and until the check or draft is honored.
(4) If the applicant is a partnership, the monthly return must be made by one of the partners; if a corporation, by one of the officers thereof; if a foreign corporation, copartnership or nonresident individual, by the resident agent or local manager of said corporation, copartnership or individual. (Ord. 1896 § 2, 2020).
3.71.060 Books and records – Inspection and confidentiality.
(1) It is the duty of each taxpayer to keep and enter in a proper book or set of books or records an account which shall accurately reflect the amount of his or her gross income, which account shall always be open to inspection by the director, or his or her designee, at a reasonable time, and from which the director or his or her agent may verify returns made by the taxpayer.
(2) To the extent permitted by Chapter 42.56 RCW and other applicable statutes, the applications, statements or returns made to the director pursuant to this chapter shall not be made public, nor shall they be subject to the inspection of any person except the mayor, the city attorney, the director, or his or her authorized agent and members of the city council. (Ord. 1896 § 2, 2020).
3.71.070 Investigation of returns.
If any taxpayer fails to submit his or her return, or if the director is dissatisfied as to the correctness of the statements made in the application or return of any taxpayer, the director, or his or her designee, may:
(1) Inspect the taxpayer’s books or records of account to ascertain the amount of the fee or tax or to determine the correctness of such statements, as the case may be;
(2) Examine any person under oath administered by the director, or his or her agent, touching the matters inquired into; or
(3) Fix a time and place for an investigation of the correctness of the return, and issue a subpoena to the taxpayer, or any other person, to attend such investigation and testify, under oath administered by the director, or his or her agent, in regard to the matters inquired into and may, by subpoena, require him or her, or any person, to bring with him or her such books, records and papers as may be necessary. (Ord. 1896 § 2, 2020).
3.71.080 Over- or underpayment.
(1) Overpayment. If the director, upon investigation or upon checking returns, finds that the fee or tax paid by a taxpayer is more than the amount required of the taxpayer, he or she shall return the amount overpaid by a warrant upon the general fund.
(2) Underpayment. If the director finds that the fee or tax paid by a taxpayer is less than required, he or she shall send a statement to the taxpayer showing the balance due, and the taxpayer shall within 10 days pay the amount shown thereon. If payment is not received by the director by the due date specified in the notice, the director shall add a penalty of 25 percent of the amount of the additional tax found due.
(3) No assessment or correction of an assessment for additional taxes due may be made by the director for more than four years after the close of the tax year, except:
(a) Against a taxpayer who has not registered as required by this chapter;
(b) Upon a showing of fraud;
(c) Upon a showing of misrepresentation of a material fact by a taxpayer; or
(d) Where a taxpayer has executed a written waiver of such limitation. (Ord. 1896 § 2, 2020).
3.71.090 Penalty for delinquent payment.
If any person, firm or corporation subject to this tax fails to pay any tax required by the due date as contained in OHMC 3.71.050(1), there shall be added to such tax a penalty of 25 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. 1896 § 2, 2020).
3.71.100 Failure to make return.
(1) 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.
(2) The finance director may collect the same by any appropriate means or by suit or action in the name of the city. (Ord. 1896 § 2, 2020).
3.71.110 Violation.
Any person who fails or refuses to pay the tax when due or fails to make or file a return as required by this chapter may be subject to civil offenses in Chapter 1.28 OHMC. (Ord. 1896 § 2, 2020).
3.71.120 General fund.
The tax collected shall be placed in the general fund, except for the proportion of the tax allocated to the creative arts fund. The allocation for art purposes shall be deposited directly into the creative arts fund. (Ord. 1896 § 2, 2020).
3.71.130 Allocation of utility tax to the creative arts fund.
The city shall allocate one-quarter of one percent of the utility tax collected against each supplier of water (OHMC 3.71.040(5)), sewer collection and treatment (OHMC 3.71.040(6)), and solid waste (OHMC 3.71.040(7)) to the creative arts fund for the purposes set forth in Chapter 3.26 OHMC. (Ord. 1896 § 2, 2020).
3.71.140 Rules and regulations.
The director shall have the power to adopt, publish and enforce rules and regulations not inconsistent with this chapter or with applicable law for the purpose of carrying out the provisions of this chapter, and it is unlawful for any person or taxpayer to violate or fail to comply with any such rule or regulation. (Ord. 1896 § 2, 2020).
3.71.150 Appeals.
Appeal from the decision of the finance director shall be in accordance with the provisions of Chapter 1.24 OHMC as now in effect or hereafter amended. (Ord. 1896 § 2, 2020).
Prior legislation: Ords. 1289, 1547, 1620, 1872 and 1877.