Chapter 5.84
UTILITY SERVICES TAX

5.84.000    Chapter Contents

Sections:

5.84.001    Administrative provisions.

5.84.002    Business and occupations tax applies.

5.84.010    Definitions.

5.84.020    Exercise of power to license for revenue.

5.84.030    License required.

5.84.050    Occupations subject to tax – Amount.

5.84.060    Interstate, foreign and governmental commerce exempt.

5.84.070    Allocation of income – Cellular telephone service.

5.84.080    Tax due quarterly.

5.84.090    Effective date of rate change.

5.84.110    Tax due upon transfer.

5.84.115    Use tax on the privilege of using natural gas or manufactured gas as a consumer.

5.84.170    Power to promulgate regulations.

5.84.210    Violations – Civil infraction.

(Ord. 7424 §51, 2025).

5.84.001 Administrative Provisions

The administrative provisions contained in OMC Chapter 5.05 shall be fully applicable to the provisions of this chapter except as expressly stated to the contrary herein.

(Ord. 7424 §51, 2025).

5.84.002 Business and Occupations Tax Applies

The provisions contained in OMC Chapter 5.04 shall be fully applicable to businesses regulated under this chapter.

(Ord. 7424 §51, 2025).

5.84.010 Definitions

In construing the provisions of this chapter, save when otherwise plainly declared or clearly apparent from the context, the following definitions shall be applied:

A.    “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.

A deduction from gross income shall be allowed to cellular telephone service companies who keep their books on an accrual basis for credit losses, including losses to fraud, other than fraud by employees or agents of the telephone service company.

B.    “Person” or “persons” means persons of either sex, firms, copartnerships, corporations, and other associations of natural persons, whether acting by themselves or by servants, agents or employees.

C.    “Taxpayer” means any person liable to the license fee or tax imposed by this chapter.

D.    “Tax year” or “taxable year” means the year commencing January 1st, and ending on the thirty-first day of December of the same year, or in lieu thereof, the taxpayer’s fiscal year when permission is obtained from the Director to use the same as the tax period.

E.    "Telecommunications service" or “Telephone business” means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. It includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice over internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. Telecommunication services or telephone business also includes ancillary services that are associated with or incidental to the provision of telecommunication services including, but not limited to, conference bridging, detailed telecommunications billing, directory assistance, vertical service, or voice mail services as defined in RCW 82.04.065.

Telecommunication services or telephone business also includes those activities previously used to define telephone business such as the providing by any person of access to a local telephone network, local telephone network switching service, toll service, cellular or mobile telephone service, coin telephone services, pager service, or the providing of 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. The term includes the provision of cooperative or farmer line telephone services or associations operating exchanges. The term also includes the provision of transmission to and from the site of an internet provider via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Telecommunication service or telephone business" does not include the providing of competitive telephone service, data processing, providing of cable television service, or other providing of broadcast services by radio or television stations.

F.    “Cellular telephone service” is a voice or data telephone/telecommunications system based in whole or substantial part on wireless radio communications, whether or not the communications are subject to regulation by the Washington Utilities and Transportation Commission (WUTC). This includes cellular mobile service. 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.

G.    “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. Competitive telephone service also includes leasing of telephone street directories. Transmission of communication through cellular telephones is classified as "telephone business" rather than "competitive telephone service."

H.    “Place of primary use” means the residential street address or the primary business street address of the customer and in both cases must be located within the licensed service area of the home service provider.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 5566 §1, 1995; Ord. 2258 §2, 1935).

5.84.020 Exercise of power to license for revenue

The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 2258 §1, 1935).

5.84.030 License required

It is unlawful for any person, firm or corporation to engage in business in the City without first obtaining a license pursuant to the provisions of OMC 5.02. Any additional licensing or permitting requirements of this Chapter 5.84 (Utility Services Tax) shall also apply.

(Ord. 7424 §51, 2025; Ord. 7187 §3, 2019; Ord. 6690 §1, 2010; Ord. 4736 §1, 1986; Ord. 2258 §3, 1935).

5.84.050 Occupations subject to tax – Amount

From and after the effective date of the ordinance codified in this section, there is levied upon, and shall be collected from, the persons on account of the business activities, license fees in the amounts to be determined by the application of the rates against gross income, as follows:

A.    Upon every person engaged in or carrying on a telecommunications service or telephone business, or a combined telephone and telegraph business, including revenues from intrastate toll, derived from such business provided to customers within the city, a fee or tax equal to nine (9) percent of the total gross income from such business in the city during the person’s tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred dollars ($100.00) per tax year.

B.    Upon every person engaged in or carrying on a telegraph business, a fee or tax equal to nine (9) percent of the total gross income from such business in the city during the tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred dollars ($100.00) per tax year.

C.    Upon every person engaged in or carrying on the business of selling or furnishing gas for hire, a fee or tax equal to nine (9) percent of the gross income from such business in the city during the person’s tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

D.    Upon every person engaged in or carrying on the business of selling or furnishing electric light and power, a fee or tax equal to nine (9) percent of the total gross income from such business in the city during the person’s tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

E.    Upon every person engaged in or carrying on the business of selling or furnishing cable television, a fee or tax equal to six (6) percent of the total gross income from such business in the city during the person’s tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

F.    Upon every person conducting or engaged in the business of supplying steam heat or power to the public for hire, a fee or tax equal to one (1) percent of the total gross income from such business in the city during the person’s tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

G.    Upon every person conducting or engaged in the business of transporting passengers for hire on a regular route, a fee or tax equal to one (1) percent of the total gross income from such business in the city during the tax year for which the license is required; provided, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

H.    Upon every person conducting or engaged in the business of selling or furnishing water, collecting or processing sewage, collecting or disposing of solid waste, handling or disposing of storm water runoff, a fee or tax equal to six (6) percent of the total gross income from such business in the city during the tax year for which the license is required; provided, that the tax on City of Olympia owned utilities engaged in the business of collecting or processing sewage, collecting or disposing of solid waste, handling or disposing of stormwater runoff, or furnishing water shall be as set forth below, based on the total gross income from such enterprise in the city during the tax year; provided further, however, that the minimum fee or tax shall not be less than one hundred ($100.00) dollars per tax year.

Enterprise

Rate

1. Sewer

12.5%

2. Solid Waste

12.5%

3. Stormwater

12.5%

4. Water

12.5%

This section shall not apply to:

1.    Gross revenue of wholesale utility providers, that is, those which obtain utility services from the city for customers located in the service area of the provider and which own the distribution system and provide maintenance, collection, meter reading, and/or other services associated with the wholesale provision of utility services;

2.    Businesses operated primarily for the purpose of recycling of solid waste.

(Ord. 7424 §51, 2025; Ord. 7308 § 1, 2022; Ord. 7307 §1, 2021; Ord. 7187 §3, 2019; Ord. 6923 §1, 2014; Ord. 6883 §1, 2013; Ord. 6690 §1, 2010; Ord. 6682 §1, 2009; Ord. 6314 §1, 2004; Ord. 5753 §1, 1997; Ord. 5645 §1, 1996; Ord. 5471 §1, 1994; Ord. 5448 §1, 1994; Ord. 5345 §1, 1992; Ord. 4736 §2, 1986; Ord. 4358 §2, 1982; Ord. 4332 §2, 1982; Ord. 3121 §1, 1959).

5.84.060 Interstate, foreign and governmental commerce exempt

A.    There shall be excepted and deducted from the total gross income upon which a license fee or tax is computed so much thereof as is derived from the transactions in interstate or foreign commerce, or from business done for the government of the United States, its officers or agents, and any amount paid by the taxpayer to the United States, the state, or the city as excise taxes levied or imposed upon the sale or distribution of property or services.

B.    Nothing in this chapter shall be construed as requiring a license, or the payment of a license fee or tax, or the doing of any act, which would constitute an unlawful burden or interference in violation of the Constitution or laws of the United States, or which would not be consistent with the Constitution or laws of the state.

C.    Any person subject to the payment of a license fee or tax under the provisions of any ordinance of the city, other than this, on account of engaging in any activity for which the person is liable to tax under this chapter, or any person required to pay fees, or render services, to the city, by virtue of any ordinance granting a franchise to such person, may deduct the amount of such fee, tax, or the value of such services, from the amount of fee or tax imposed by this chapter on account of such activity, but such person shall nevertheless, in the manner provided for under this chapter, apply for and procure a business license.

(Ord. 7424 §51, 2025; Ord. 7187 §3, 2019; Ord. 6690 §1, 2010; Ord. 2258 §6, 1935).

5.84.070 Allocation of income – Cellular telephone service

A.    In determining the total gross income from telephone business in the City for purposes of subsection 5.84.050.A, there shall be included all gross income from cellular telephone service (including roaming charges incurred by Olympia customers outside this state) provided to customers whose "place of primary use" is in the City, regardless of the location of the facilities used to provide the service. The customer’s "place of primary use" is, with respect to each telephone: (a) the customer’s address; or (b) the customer’s place of residence if the telephone is for personal use, and in both cases must be located within the licensed service area of the home service provider. Roaming charges and cellular telephone charges to customer whose principal service address is outside Olympia will not be taxable even though those mobile services are provided within Olympia.

B.    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.    When the service is provided while a subscriber is roaming outside the subscriber’s normal cellular network area, the gross revenues 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.    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 city and the other city or cities by submitting the issue for settlement to 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 company 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.

(Ord. 7424 §51, 2025).

5.84.080 Tax due quarterly

A.    Tax imposed by this chapter shall be due and payable in quarterly installments, and remittance shall be made on or before the end of the month next succeeding the end of the quarterly period in which the tax accrued. Such quarterly periods are as follows:

1.    First quarter – January, February, March;

2.    Second quarter – April, May, June;

3.    Third quarter – July, August, September;

4.    Fourth quarter – October, November, December.

B.    On or before the due date, the taxpayer shall file with the Director a written return upon such form and setting forth such information as the Director shall reasonably require to compute the tax, together with the payment of the amount of the tax.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 4358 §4, 1982; Ord. 2258 §8, 1935).

5.84.090 Effective date of rate change

No rate change under this chapter shall take effect before the expiration of sixty days following the enactment of the ordinance establishing the change.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 5566 §2, 1995).

5.84.110 Tax due upon transfer

Upon the sale or transfer during any tax year of a business on account of which a fee or tax is required by this chapter, the purchaser or transferee shall, if the fee or tax has not been paid in full for said year, be responsible for its payment for that portion of the year during which the purchaser or transferee carries on such business.

(Ord. 7424 §51, 2025; Ord. 7187 §3, 2019; Ord. 6690 §1, 2010; Ord. 2258 §11, 1935).

5.84.115 Use tax on the privilege of using natural gas or manufactured gas as a consumer

A.    As authorized by RCW 82.14.230, there is fixed and imposed on every person a use tax for the privilege of using natural gas or manufactured gas in the city as a consumer. The tax shall be in an amount equal to the value of the article used by the taxpayer multiplied by the rate of tax on the business of selling or furnishing gas for domestic, business or industrial consumption set forth in Section 5.84.050(C) of this chapter. The “value of the article used” shall have the meaning set forth in RCW 81.12.010(1), and does not include any amounts that are paid for the hire or use of a natural gas business in transporting the gas subject to tax under this section if those amounts are subject to tax under Section 5.84.050(C) of this chapter.

B.    The tax imposed under this section shall not apply to the use of natural or manufactured gas if the person who sold the gas to the consumer has paid a tax under Section 5.84.050(C) of this chapter with respect to the gas for which exemption is sought under this subsection.

C.    There shall be a credit against the tax levied under this section in an amount equal to any tax paid by:

1.    The person who sold the gas to the consumer when that tax is a gross receipts tax similar to that imposed pursuant to Section 5.84.050(C) of this chapter by another state with respect to the gas for which a credit is sought under this subsection; or

2.    The person consuming the gas upon which a use tax similar to the tax imposed by this section was paid to another state with respect to the gas for which a credit is sought under this subsection.

D.    The use tax hereby imposed shall be paid by the consumer. The administration and collection of the tax hereby imposed shall be by the Washington State Department of Revenue pursuant to RCW 82.14.050.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 5150 §1, 1990).

5.84.170 Power to promulgate regulations

The Director shall have the power, and it shall be the Director’s duty, from time to time, to adopt, publish, and enforce rules and regulations not inconsistent with this chapter or with law, for the purpose of carrying out the provisions thereof, and it is unlawful to violate or fail to comply with, any such rule or regulation.

(Ord. 7424 §51, 2025; Ord. 7187 §3, 2019; Ord. 6690 §1, 2010; Ord. 2258 §17, 1935).

5.84.210 Violations – Civil infraction

It shall be a civil infraction for a person, firm, limited liability company or corporation to violate or fail to comply with any term or provision of this chapter. Each day shall be a separate infraction. A person, firm, limited liability company or corporation found to have committed a civil infraction shall be assessed a monetary penalty as provided in OMC Chapter 4.44, Uniform Civil Enforcement.

(Ord. 7424 §51, 2025; Ord. 6690 §1, 2010; Ord. 6682 §1, 2010; Ord. 6081 §21, 2001; Ord. 2258 §20, 1935. Formerly 5.84.190).