Chapter 5.01
UTILITY TAX*

Sections:

5.01.010    Generally.

5.01.020    Definitions.

5.01.030    Reporting period and payment provisions.

5.01.040    Businesses and utilities subject to utility tax – Amount.

5.01.050    Exemptions and deductions.

5.01.060    Sale or transfer of business.

5.01.070    Taxpayer to keep books and records – Returns to be confidential.

5.01.080    Right to audit.

5.01.090    Overpayment or underpayment of tax.

5.01.100    Late payment penalties.

5.01.110    Clerk-treasurer to make the rules.

5.01.120    Violation – Penalty.

*Prior legislation: Ords. 208, 554, 576, 602, 618, 644, 665, 682, 704, 853, 854 and 958.

5.01.010 Generally.

There are levied and shall be collected utility taxes against the persons on account of the business activities, and in the amounts to be determined by the application of the rates against gross income, as set forth in this chapter. (Ord. 1019, 1997).

5.01.020 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:

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

(2) “Taxpayer” means any person liable for taxes imposed by this chapter.

(3) “Gross revenue” means revenues received by a utility or business from operations or sales within the city less net uncollectibles. Gross revenue of natural, artificial or mixed gas and electric utilities shall include revenues from the use, rental or lease of operating facilities of the utility other than residential-type space and water heating equipment. Gross revenues shall not include charges which are passed onto the subscribers by a utility pursuant to tariffs required by regulatory order to compensate for the cost to the company of the tax imposed by this section. Gross revenues of telephone utilities shall include 100 percent of the toll service fees from calls originating in and/or billed to subscribers within the city of Stanwood including revenue from providing access to a local telephone network, local telephone network switching service, toll service, or coin telephone services, 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, including transmission of communication for cellular telephones or other wireless phone service. Gross revenues of cable television utilities shall include revenues from the one-way transmission of video programming and associated nonvideo signals to subscribers which is provided in connection with video programming. (Ord. 1019, 1997).

5.01.030 Reporting period and payment provisions.

Utility taxes are due at the end of each monthly tax-reporting period. However, the city clerk-treasurer may, in the interest of economy of administration, set quarterly tax-reporting periods for individual taxpayers. Remittance of utility taxes imposed by this section shall be made to the city clerk-treasurer on or before the twenty-fifth day of the month next succeeding the end of the tax-reporting period. (Ord. 1019, 1997).

5.01.040 Businesses and utilities subject to utility tax – Amount.

(1) There are levied and shall be collected utility taxes against persons on account of business activities in amounts to be determined by the nature of the business activities and by the application of rates against gross income, as follows:

(a) Electric. Upon every person engaged in or carrying on the business of selling or furnishing electric light and power within the city of Stanwood, a tax equal to six percent of the total gross revenue from such business during the tax-reporting period;

(b) Gas. Upon every person engaged in or carrying on a business of selling or furnishing gas within the city of Stanwood, a tax equal to six percent of the total gross revenue from such business in the city during the tax-reporting period;

(c) Telephone. Upon every person engaged in or carrying on a telephone business within the city of Stanwood, a tax equal to six percent of the total gross revenue from such business during the tax-reporting period;

(d) Water. Upon every business in the city engaged in selling or furnishing water including for resale or distribution outside of the city, to be levied upon customers of such business:

(i) A city tax equal to 10.07 percent of the total gross revenue from such business during the tax-reporting period;

(ii) A state public utility tax at the rate established by RCW 82.16.020, as said rate adjusts in said statute, the rate at the time of adoption of this section being equal to 5.029 percent of total gross revenue.

(e) Sanitary Sewer. Upon every business in the city engaged in furnishing sanitary sewer services within the city of Stanwood, to be levied upon customers of such business:

(i) A city tax equal to six percent of the gross revenue from such business during the tax-reporting period;

(ii) A state public utility tax equal to the amount of the public utility tax on sewerage collection incurred by the city under RCW 82.16.020, to be revised annually based on actual preceding year costs and the rate in said section; and

(iii) The business and occupation tax on the amount of sewer service costs that are not related to sewerage collection, to be revised annually based on actual costs, according to the guidance provided by WAC 458-20-251.

(f) Drainage. Upon every business engaged in providing drainage services within the city of Stanwood, to be levied upon customers of such business:

(i) A city tax equal to six percent of the gross revenue from such business during the tax-reporting period;

(ii) A state business and occupation tax at the rate established by RCW 82.04.290, as said rate adjusts, said rate currently being equal to one and one-half percent of the total gross revenues.

(g) Garbage. Upon every person engaged in or carrying on the business of collection of garbage or solid waste within the city of Stanwood, a tax of six percent of the gross revenue from such business during the tax-reporting period;

(h) Cable Television. Upon every person engaged in or carrying on a cable television business within the city of Stanwood, a tax equal to three percent of the gross revenue from such business in the city during the tax-reporting period. (Ord. 1437 § 1, 2017; Ord. 1436 § 1, 2016; Ord. 1287 § 1, 2010; Ord. 1019, 1997).

5.01.050 Exemptions and deductions.

There shall be exempted and deducted from the total gross income upon which the tax is computed so much thereof as is derived from 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. There shall be exempted and deducted from the total gross income upon which the tax is computed all bad debts for services incurred, rendered or charged for during the tax-reporting period. Debts shall be deemed bad and uncollectible when the same have been written off the books of the taxpayer. (Ord. 1019, 1997).

5.01.060 Sale or transfer of business.

Upon the sale or transfer during any tax year of a business subject to the utility tax, the purchaser or transferee shall, if the tax has not been paid in full for said year, be responsible for its payment for that portion of said year during which he carries on such business. (Ord. 1019, 1997).

5.01.070 Taxpayer to keep books and records – Returns to be confidential.

It shall be the duty of each taxpayer taxed upon his gross income to keep and enter in a proper book or set of books or records an account(s) which shall accurately reflect the amount of his gross income, which account shall always be open to the inspection of the city clerk-treasurer, or his duly authorized agent, and from which said officer or his agent may verify the return made by the taxpayer. The applications, statements or returns made to the city clerk-treasurer, pursuant to this chapter, shall not be made public, nor shall they be subject to inspection of any person except the mayor, city attorney, the city clerk-treasurer, or his authorized agent, and members of the city council. (Ord. 1019, 1997).

5.01.080 Right to audit.

If any taxpayer fails to make his return, or if the city clerk-treasurer is dissatisfied as to the correctness of the statements made in the application or return of any taxpayer, the city shall have the right, at the expense of the business subject to taxation, to conduct such audit procedures as are necessary to establish or account for the taxable revenue should the business subject to taxation fail or refuse to provide an accounting. (Ord. 1019, 1997).

5.01.090 Overpayment or underpayment of tax.

If the city clerk-treasurer upon investigation or upon checking a return finds that the tax paid is more than the amount required of the taxpayer, he shall refund the amount overpaid by a warrant upon the general fund. If the city clerk-treasurer finds that the tax paid is less than required, he shall send a statement to the taxpayer showing the balance due. Said taxpayer shall within 10 days after notification pay the amount shown thereon. (Ord. 1019, 1997).

5.01.100 Late payment penalties.

All taxes due under this chapter, beginning with tax to be paid for the month of January, 1998, if said tax is not paid on or before the time specified in SMC 5.01.030, a late payment penalty shall accrue and be added to the tax due as follows: If any tax is not paid within 15 days of its due date, a penalty shall be added equal to five percent of the tax. (Ord. 1019, 1997).

5.01.110 Clerk-treasurer to make the rules.

The city clerk-treasurer shall have the power and it shall be his duty, from time to time, to adopt, post in the City Hall, 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. 1019, 1997).

5.01.120 Violation – Penalty.

Violation of this chapter shall constitute a Class B infraction as defined in SMC 13.01.045(1) and subject the violator to enforcement as set forth therein. Any such fines shall be in addition to the tax required. Officers, directors and managers of any organization conducting business activities shall be jointly and severally liable for the payment of the tax, late penalties, and any fine imposed under SMC Title 13. (Ord. 1112 § 2, 2001; Ord. 1018, 1997; Ord. 1019, 1997).