Chapter 5.12
BUSINESS LICENSES

Sections:

5.12.010    Definitions.

5.12.020    Requirements.

5.12.030    Exemptions.

5.12.040    Display of license – Transferability.

5.12.050    Disclaimer of city liability – Indemnification.

5.12.060    Prohibited use.

5.12.070    General qualifications of licensees.

5.12.080    Application procedure.

5.12.090    Renewal.

5.12.100    Licenses for businesses located outside city limits.

5.12.110    License approval or denial.

5.12.120    Suspension or revocation procedure.

5.12.130    Exercise of power.

5.12.140    Inspections – Right of entry.

5.12.150    Notice and order.

5.12.160    Civil penalty.

5.12.170    Criminal penalties.

5.12.180    Additional relief.

5.12.010 Definitions.

For the purposes of this chapter, the following terms, phrases, words, and their derivations shall have the meanings given herein:

(1) “Business” includes all activities, occupations, pursuits or professions located and/or engaging in business within the city with the object of gain, benefit or advantage to the licensee or to another person or class, directly or indirectly, whether part-time or full-time. Each business location shall be deemed a separate business. For the purposes of this chapter, the owner of any apartment building or buildings containing an aggregate of 10 or more rental units located on a single or contiguous lot(s) and the owner of any business or commercial building containing any rental units shall be considered to be engaging in business. Utility companies are defined as businesses.

(a) For purposes of this chapter, “business” also includes medical marijuana cooperatives as defined under Chapter 69.51A RCW and marijuana producers, marijuana processors, marijuana retailers and marijuana retail outlets as defined in Chapter 69.50 RCW.

(2) Engaging in Business.

(a) The term “engaging in business” means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.

(b) This section sets forth examples of activities that constitute engaging in business in the city, and establishes safe harbors for certain of those activities so that a person who meets the criteria may engage in de minimus business activities in the city without having to pay a business license fee. The activities listed in this section are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection (2)(a) of this section. If an activity is not listed, whether it constitutes engaging in business in the city shall be determined by considering all the facts and circumstances and applicable law.

(c) Without being all-inclusive, any one of the following activities conducted within the city by a person, or its employee, agent, representative, independent contractor, broker or another acting on its behalf, constitutes engaging in business and requires a person to register and obtain a business license:

(i) Owning, renting, leasing, maintaining, or having the right to use, or using, tangible personal property, intangible personal property, or real property permanently or temporarily located in the city.

(ii) Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city.

(iii) Soliciting sales.

(iv) Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.

(v) Providing technical assistance or service, including quality control, product inspections, warranty work, or similar services, on or in connection with tangible personal property sold by the person or on its behalf.

(vi) Installing, constructing, or supervising installation or construction of real or tangible personal property.

(vii) Soliciting, negotiating, or approving franchise, license, or other similar agreements.

(viii) Collecting current or delinquent accounts.

(ix) Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.

(x) Providing disinfecting and pest control services, employment and labor pool services, home nursing care, janitorial services, appraising, landscape architectural services, security system services, surveying, and real estate services including the listing of homes and managing real property.

(xi) Rendering professional services such as those provided by accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball clubs and other sports organizations, chemists, consultants, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, veterinarians.

(xii) Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.

(xiii) Training or recruiting agents, representatives, independent contractors, brokers or others, domiciled or operating on a job in the city, acting on its behalf, or for customers or potential customers.

(xiv) Investigating, resolving, or otherwise assisting in resolving customer complaints.

(xv) In-store stocking or manipulating products or goods, sold to and owned by a customer, regardless of where sale and delivery of the goods took place.

(xvi) Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.

(d) If a person, or its employee, agent, representative, independent contractor, broker or another acting on the person’s behalf, engages in no other activities in or with the city but the following, it need not register and obtain a business license:

(i) Meeting with suppliers of goods and services as a customer.

(ii) Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.

(iii) Attending meetings, such as board meetings, retreats, seminars, and conferences, or other meetings wherein the person does not provide training in connection with tangible personal property sold by the person or on its behalf. This provision does not apply to any board of director member or attendee engaging in business such as a member of a board of directors who attends a board meeting.

(iv) Renting tangible or intangible property as a customer when the property is not used in the city.

(v) Attending, but not participating in, a “trade show” or “multiple vendor events.” Persons participating at a trade show shall review the city’s trade show or multiple vendor event ordinances.

(vi) Conducting advertising through the mail.

(vii) Soliciting sales by phone from a location outside the city.

(e) A seller located outside the city merely delivering goods into the city by means of common carrier is not required to register and obtain a business license; provided, that it engages in no other business activities in the city. Such activities do not include those in subsection (2)(d) of this section.

The city expressly intends that “engaging in business” includes any activity sufficient to establish nexus for purposes of applying the license fee under the law and the Constitutions of the United States and the state of Washington. Nexus is presumed to continue as long as the taxpayer benefits from the activity that constituted the original nexus generating contact or subsequent contacts.

(3) “Person” means any individual, firm, partnership, company, corporation, association, receiver, assignee, trust, estate, joint venture, group, joint stock company, business trust, society or any group of individuals acting as a unit.

(4) “Licensee” means any business granted a business license by the city.

(5) “Premises” includes all lands, structures and places, and also any personal property which is either affixed to or is otherwise used in connection with any such business conducted on such premises.

(6) “City license officer” is the city finance director, her/his designee or any city of Port Orchard police officer.

(7) “Minor” means any person under 18 years of age.

(8) “Nonprofit organization” means an organization which has been granted nonprofit status by the Secretary of State of Washington or the Internal Revenue Service. (Ord. 028-18 § 1; Ord. 018-16 § 2; Ord. 023-13 § 2; Ord. 011-12 § 1; Ord. 1701 § 1, 1997).

5.12.020 Requirements.

Any person, firm, or corporation that is engaging in business or carries on within the city any business, profession, trade or occupation designated in this chapter shall first obtain from the city a license to do so. Unless otherwise exempted, the license established by this chapter is in addition to any other license required by another chapter within this title. All licenses issued pursuant to the provisions of this chapter shall be posted in a prominent location at the premises where the licensed business, profession, trade or occupation is carried on. (Ord. 028-18 § 1; Ord. 008-10 § 1; Ord. 1701 § 2, 1997).

5.12.030 Exemptions.

To the extent set forth in this section, the following persons and businesses shall be exempt from the registration, license and/or license fee requirements as outlined in this chapter:

(1) Any instrumentality of the United States, state of Washington or any political subdivision thereof, with respect to the exercise of governmental functions;

(2) Any person, firm, or corporation which the city is forbidden to tax by law;

(3) Pursuant to RCW 36.71.090, no business license shall be required of any farmer, gardener or other person to sell, deliver or peddle any fruits, vegetables, berries, eggs or any farm produce or edibles raised, gathered, or produced by such person. Collective gardens as defined under Chapter 69.51A RCW are not covered by this exemption;

(4) No business license shall be required of any minor engaging in a de minimis entrepreneurial venture with permission of the property owner, including but not limited to such trade and activities as running a lemonade stand;

(5) Accredited public or private schools, colleges or universities, as to their education endeavors only; churches and other religious bodies, as to their religious activities only; fraternal organizations and lodges as to their fraternal and lodge activities only; civic and charitable organizations, including nonprofit hospitals and clinics, as to their civic and charitable activities only; but not as to any business activities by these entities;

(6) Garage, yard and rummage sales;

(7) Representatives from businesses located outside the city limits calling on licensed businesses within the city limits for purposes of wholesale business;

(8) Vendors of books, periodicals, newspapers or others exempted by law;

(9) Individual vendors at fundraising events held by tax-exempt nonprofit organizations described by IRC Section 501(c)(3) (educational and charitable), 501(c)(4) (social welfare), or 501(c)(10) (fraternal societies operating as lodges), when the vending activities are conducted by the individual vendor for a period not exceeding a cumulative total of three days and constitute the vendor’s only business activity within the city, and as a condition to participation in the event, the individual vendor pays a lump sum or a portion of the gross revenues to the nonprofit organization;

(10) Any person, business, or organization engaged in public property vending, as defined by POMC 5.96.010(6), at a farmers’ market. (Ord. 028-18 § 1; Ord. 011-12 § 2; Ord. 009-05 § 1; Ord. 1871 § 1, 2002; Ord. 1701 § 3, 1997).

5.12.040 Display of license – Transferability.

(1) Licenses to Be Posted. The city business licenses issued pursuant to this chapter shall be prominently displayed in the place of business at all times, and such license shall not be tampered with in any manner; provided, however, that when the licensee has no established place of business and goes from place to place or from house to house, then such license must be carried on the person of such licensee while actually engaged in the licensed occupation, business or trade.

(2) Licenses Not Transferable. Upon the sale or transfer of any business licensed pursuant to this chapter, the license issued to the prior owner or transferor shall automatically expire on the date of such sale or transfer and the new owner intending to continue such business in the city shall apply for and obtain a new business license pursuant to the procedures established by this chapter prior to engaging in, conducting or operating the business. Also, upon substantial change in the type of business operated, a new business license shall be required. (Ord. 028-18 § 1; Ord. 008-10 § 2; Ord. 1701 § 4, 1997).

5.12.050 Disclaimer of city liability – Indemnification.

(1) Issuance of a license pursuant to this chapter does not constitute the creation of a duty by the city to indemnify the licensee for any wrongful acts against the public, or to guarantee the quality of goods, services or expertise of a licensee. The issuance of a license does not shift responsibility from the licensee to the city for proper training, conduct or equipment of the licensee or their agents, employees or representatives, even if specific regulations require standards of training, conduct or inspection. Issuance of the license does not exempt the licensee from other required permits or licenses.

(2) For all city business licenses issued to businesses operating under Chapters 69.50 and 69.51A RCW, and POMC Title 20:

(a) All licensees waive and release the city, its officers, elected officials, employees, volunteers and agents from any liability for injuries, damages, or liabilities of any kind that result from any arrest or prosecution of business owners, operators, employees, clients or customers for a violation of federal, state or local laws and regulations; and

(b) All licensees, jointly and severally, if more than one, agree to indemnify, defend and hold harmless the city, its officers, elected officials, employees, volunteers and agents, insurers and self-insurance pool against all liability, claims and demands on account of any injury, loss or damage, including, without limitation, claims arising from bodily injury, personal injury, sickness, disease, death, property loss or damage, or any other loss of any kind whatsoever arising out of or in any manner connected with the operation of the marijuana business or medical marijuana cooperative that is the subject of the license. (Ord. 017-23 § 1 (Exh. A); Ord. 028-18 § 1; Ord. 019-17 § 17; Ord. 018-16 § 3; Ord. 023-13 § 3; Ord. 1701 § 5, 1997).

5.12.060 Prohibited use.

A license hereunder shall not be issued to any person who uses or occupies or proposes to use or occupy any real property or otherwise conducts or proposes to conduct any business in violation of the provisions of any ordinance of the city of Port Orchard or of the statutes of the state of Washington. The granting of a business license shall in no way be construed as permission or acquiescence in a prohibited activity or other violation of the law. (Ord. 028-18 § 1; Ord. 1701 § 6, 1997).

5.12.070 General qualifications of licensees.

(1) No license shall be issued, nor shall any license be renewed, pursuant to the provisions of this chapter to:

(a) An applicant who is under 18 years of age at the time of the application, unless they shall obtain the written consent of said applicant’s parent or guardian to make said application;

(b) An applicant who has had a similar license revoked or suspended, pursuant to POMC 5.12.120, or its predecessor;

(c) An applicant who shall not first comply with the general laws of the state;

(d) An applicant who seeks such a license in order to practice some illegal act or some act injurious to the public health or safety;

(e) An applicant proposing any activity that is known to violate local, state, and/or federal law, except as otherwise specifically allowed pursuant to Chapters 69.50 and 69.51A RCW, and POMC Title 20.

(2) Any person, including city officials, may submit written complaints or objections to the city license officer regarding the application for any license, and the city license officer is additionally authorized to request and receive information from all city departments as will tend to aid her/him in determining whether to issue or deny the license. Such information shall be confidential unless a hearing is requested on the application, or if the applicant shall request the information in writing. All information, complaints or objections shall be investigated and considered by the city license officer prior to issuing, denying or renewing any license. (Ord. 017-23 § 1 (Exh. A); Ord. 028-18 § 1; Ord. 019-17 § 17; Ord. 018-16 § 4; Ord. 023-13 § 4; Ord. 011-12 § 3; Ord. 1701 § 7, 1997).

5.12.080 Application procedure.

(1) Application for a business license shall be made by submitting a completed business license application and any appropriate addenda forms, and remitting all fees due, including handling fees established in RCW 19.02.075, to the Washington State Department of Revenue’s business license service, in coordination with the city.

(2) The annual business license fee shall be established by council resolution.

(3) A license shall be issued after the application has been fully completed and all applicable requirements have been fully complied with. In addition, any business requiring a state or federal license shall obtain said licenses and provide the city with proof of their issuance prior to the issuance of a city business license or any renewal thereof.

(4) Neither the filing of a new or renewal application for a license shall authorize a person to engage in or conduct a business until such license has been granted or renewed.

(5) Any business relocating to another address in the city shall reapply to have a new business license reissued to reflect the new address.

(6) If more than one business is conducted on a single premises, a separate license shall be required for each separate business conducted, operated, engaged in or practiced.

(7) The license shall expire on the date established by the business license service and must be renewed on or before the expiration in order to continue conducting business in the city. The license term and fee may be prorated to accommodate the expiration date established by the business license service.

(8) A single (master) business license will be issued to the owner of a business complex which has dealers/stations utilizing a common single cashiering function. The owner shall provide a list of the State Department of Revenue tax numbers for all tenants. (Ord. 028-18 § 1; Ord. 008-10 § 3; Ord. 1863 § 1, 2002; Ord. 1701 § 8, 1997).

5.12.090 Renewal.

(1) Renewal Process. The city business license must be renewed on or before the expiration date. The business license service shall send a renewal notice to each licensee at the last address provided by the business. Failure of the licensee to receive any such form shall not excuse the licensee from making application for and securing the required renewal license. Failure to renew the license by the expiration date may result in the charging of the late renewal penalty established in RCW 19.02.085. Failure to renew the license within 120 days after the expiration date may result in the cancellation of the license and may require the reapplication for a license in order to continue conducting business in the city.

(2) Renewal Fee. The annual business license renewal fee shall be established by council resolution. (Ord. 028-18 § 1; Ord. 008-10 § 4; Ord. 1863 § 2, 2002; Ord. 1701 § 9, 1997).

5.12.100 Licenses for businesses located outside city limits.

For purposes of the license by this chapter, any person or business whose annual value of products, gross proceeds of sales, or gross income of the business in the city is equal to or less than $2,000 and who does not maintain a place of business within the city shall submit a business license registration to the city finance director or designee. The threshold does not apply to regulatory license requirements or activities that require a specialized permit. Peddlers and hawkers shall apply for a business license. Businesses whose activities require a permit issued under the jurisdiction of the city’s building code shall apply for a business license. (Ord. 028-18 § 1; Ord. 1701 § 10, 1997).

5.12.110 License approval or denial.

The city license officer shall approve business licenses for all persons who submit an application in accordance with the process described in POMC 5.12.080 and are qualified under the requirements of this chapter and shall:

(1) Submit all applications to the planning department, fire authority, city clerk’s department and police department for their endorsements as to compliance by applicant with all city regulations which they have the duty of enforcing.

(2) A business license shall only be issued if none of the conditions listed in POMC 5.12.120(1)(a) through (f) exist or apply to the license applicant or premises proposed to be licensed.

(3) The city license officer shall notify the applicant in writing by mail, return receipt requested, of the denial of the application and the grounds therefor. Within 15 calendar days after the city license officer’s decision, the applicant may request an appeal and hearing before the city council by filing a written notice of appeal and paying the appeal fee of $200.00. The city licensing officer shall notify the applicant by mail, return receipt requested, of the time and place of the hearing. If request for hearing is not received within the time specified, the license officer’s decision shall be final. The appeal fee shall be refundable only if the city council finds in favor of the applicant.

(4) If an application for a business license is denied and the applicant has filed a timely appeal of such denial, the applicant may continue to conduct business during the pendency of the appeal. (Ord. 028-18 § 1; Ord. 008-10 § 5; Ord. 1701 § 11, 1997).

5.12.120 Suspension or revocation procedure.

(1) In addition to the other penalties provided herein or by law, any business license issued under the provisions of this chapter may be revoked or suspended, should any or all of the following conditions apply:

(a) The license was procured by fraud, false representation, or material omission of fact; or

(b) The licensee or any of its employees, officers, agents or servants, while acting within the scope of their employment, violates or fails to comply with any of the provisions of this chapter; or

(c) The licensee’s continued conduct of the business for which the license was issued has or will result in a danger to the public health, safety or welfare, or the violation of any federal or state law or any ordinance or regulation of the city; provided, however, for purposes of this chapter only, a marijuana use operated in full compliance with Chapter 69.50 or 69.51A RCW, and POMC Title 20, shall not be deemed to violate federal or state law; or

(d) The licensee has been convicted in any court of violating any federal, state or city statute, law, regulation or ordinance upon the business premises stated in the license; or

(e) The place of business does not conform to city ordinance; or

(f) The license is being used for a purpose different from that for which it was issued.

(2) Whenever the city license officer determines that there is cause for suspending or revoking any license issued pursuant to this chapter, the officer shall notify the person holding the license by mail, return receipt requested, of the determination. Notice mailed to the address on the license shall be deemed received three days after mailing. The notice shall specify the grounds for suspension, denial or revocation.

(3) The licensee may appeal the decision of the city officer to deny or revoke a business license by filing a written notice of appeal to the city council and paying the appeal fee of $200.00 within 15 calendar days of the city license officer’s decision.

(4) Upon timely receipt of the notice of appeal, the city license officer shall set a date for hearing the appeal. The city license officer shall mail notice of the date of the hearing to the licensee at least 15 calendar days prior to the hearing date.

(5) The hearing shall be de novo. The city council may affirm, reverse or modify the city license officer’s decision. The appeal fee shall be refundable only if the city council finds in favor of the applicant.

(6) The decision of the city council shall be final. Any person desiring to appeal must file the appropriate action in Kitsap County superior court within 15 calendar days of the city council’s decision.

(7) It is unlawful for any such person whose city business license has been revoked or suspended to continue operation of the business enterprise, or to keep the license issued to them in their possession and control, and the same shall immediately be surrendered to the city license officer. Following revocation, no business license shall be issued for a period of 12 months to the person or business entity whose license was revoked, or to any business entity owned or controlled by such person or entity. (Ord. 017-23 § 1 (Exh. A); Ord. 028-18 § 1; Ord. 019-17 § 17; Ord. 018-16 § 5; Ord. 023-13 § 5; Ord. 1701 § 12, 1997).

5.12.130 Exercise of power.

This chapter shall be deemed an exercise of the power of the city to license for revenue and regulation, and nothing in this chapter shall be construed to repeal or affect any other ordinance of the city which purports to regulate some business or activity pursuant to the general police power of the city, notwithstanding the fact that such ordinance may or might contain provisions relating to the licensing of such activity. (Ord. 028-18 § 1; Ord. 1701 § 13, 1997).

5.12.140 Inspections – Right of entry.

(1) The city license officer or any police officer is authorized to make such inspections and take such action as may be required to enforce the provisions of this chapter.

(2) Whenever necessary to make an inspection to enforce any of the provisions of this chapter, or whenever a city license officer has reasonable cause to believe that a licensee is operating in violation of this chapter, a license officer may enter the licensee’s place of business at all reasonable times to inspect the same or perform any duty imposed on the license officer by this chapter; provided, that:

(a) If the place of business is occupied, a license officer shall first present proper credentials and demand entry; and

(b) If the place of business is unoccupied, a license officer shall first make a reasonable effort to locate the licensee or other persons having charge or control of the place of business and demand entry; and

(c) If entry is refused, a license officer shall have recourse to the remedies provided by law to secure entry. (Ord. 028-18 § 1; Ord. 1701 § 14, 1997).

5.12.150 Notice and order.

(1) Issuance. The city license officer shall issue a notice and order, directed to the licensee or owner of the premises determined to be in violation of any of the terms and provisions of this chapter. The notice and order shall contain:

(a) The street address, when available, and a Kitsap County tax account number for identification of the premises upon which the violation has occurred;

(b) A statement that a license officer has found the conduct of the licensee or condition of the premises to be in violation of this chapter, with a brief and concise description of the conditions found to render such licensee or premises in violation;

(c) A statement of any action required to be taken to comply with this chapter, as determined by a city license officer. If the license officer has determined to assess a civil penalty, the order shall require that the penalty shall be paid within a time certain from the date of order;

(d) A statement of any action taken by a city license officer;

(e) Statement advising:

(i) That the person may appeal from the notice and order to the city council; provided, that the appeal is made in writing as provided in this chapter and filed with the city license officer within 15 calendar days from the date of service of such notice and order; and

(ii) The failure to appeal will constitute a waiver of all right to an administrative hearing and determination of the matter.

(2) Method of Service. The notice and order shall be served upon the licensee either personally or by mailing a copy of such notice and order by mail, return receipt requested, to such licensee at their address as it appears on the most recent business license application. The failure of any person to receive such notice shall not affect the validity of any proceedings taken under this section. Service by mail in the manner herein provided shall be effective on the date of mailing.

(3) Appeals. Appeals of any notice and order and any penalty imposed hereunder may be brought by any person entitled to service of the notice and order within 15 calendar days after service of the notice and order. Such requests for an appeal and hearing shall be filed with the city license officer, and be accompanied by the appeal fee of $200.00.

The city license officer shall notify the applicant by mail of the time and place of the hearing before the city council.

The appeal fee shall be refundable only if the city council finds in favor of the applicant. (Ord. 017-23 § 1 (Exh. A); Ord. 028-18 § 1; Ord. 1701 § 15, 1997).

5.12.160 Civil penalty.

(1) In addition to or as an alternative to any other penalty provided herein or by law, civil penalties shall be assessed against any licensee or person who violates any provision of this chapter as follows:

(a) Operation of Business Without a License. The penalty for operation of a business without a license shall be assessed by the city license officer in an amount not to exceed $500.00 for every 30-day period in violation. This penalty shall not apply to business enterprises failing to renew their business license as set forth in subsection (1)(b) of this section.

(b) Operation of Business After License Expiration. Failure to renew the license on or before the expiration date established by the business license service will subject the licensee to the penalty or license cancellation set forth in POMC 5.12.090.

(c) Violations of the Business License Chapter. The penalty for violations of this chapter, other than the late renewal penalty, shall be assessed by the city license officer in an amount not to exceed $500.00.

(2) The city license officer may vary the amount of the penalty to be assessed in subsections (1)(a) and (c) of this section, upon consideration of the appropriateness of the penalty to the size of the business of the violator; the gravity of the violation; the number of the past and present violations committed and the good faith of the violator in attempting to achieve compliance after notification of the violation. (Ord. 028-18 § 1; Ord. 008-10 § 6; Ord. 1701 § 16, 1997).

5.12.170 Criminal penalties.

Any person violating or failing to comply with any of the provisions of this business license chapter, and who has had a civil penalty entered against them pursuant to POMC 5.12.160 within the past five years, shall be subject to criminal prosecution and, upon conviction of a subsequent violation, shall be fined in a sum not exceeding $1,000. Each day of noncompliance with any of the provisions of this chapter shall constitute a separate offense. (Ord. 017-23 § 1 (Exh. A); Ord. 028-18 § 1; Ord. 1701 § 17, 1997).

5.12.180 Additional relief.

The city license officer may seek legal or equitable relief to enjoin any acts or practices and abate any condition which constitutes or will constitute a violation of this chapter when civil or criminal penalties are inadequate to effect compliance. (Ord. 028-18 § 1; Ord. 1701 § 18, 1997).