Chapter 5.04
BUSINESS LICENSES
Sections:
5.04.030 Business license required.
5.04.040 Separate licenses required.
5.04.050 Change in nature or location of business.
5.04.080 License to be posted.
5.04.100 Licenses not transferable.
5.04.120 Fraudulent use of business license.
5.04.130 Home occupation license.
5.04.140 Inspections – Right of entry.
5.04.190 Penalty for late renewal.
5.04.200 Denial, revocation or suspension of license.
5.04.210 Termination of business activity.
5.04.230 General business license application – Public record.
5.04.010 Purpose.
The provisions of this chapter shall be deemed an exercise of the power of the city to license for revenue and to regulate and ensure the legal conduct of businesses and to assist in the effective administration of health, fire, building, zoning and other codes of the city. (Ord. 1295-18 § 1)
5.04.020 Definitions.
The following words, terms and phrases when used in this chapter shall have the following meanings, except where the content clearly indicates a different meaning:
A. “Business” includes all activities, occupations, trade, pursuits, or professions located and/or engaged in within the city with the object of gain, benefit or advantage to the person engaging in the same, or to any other person or class, directly or indirectly.
B. “Business enterprise” means each location at which a person engages in business within the city.
C. “City” means the city of Sultan, Washington.
D. “Employee” means any person employed at any business and/or business enterprise who performs any part of his/her duties within the city, except casual laborers not employed in the usual course of business. All officers, agents, dealers, franchisees, etc., of a corporation or business trust, and partners of a partnership, are “employees” within this definition.
E. Engaging in Business.
1. 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.
2. 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 minimis 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 (E)(1) 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.
3. 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:
a. 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.
b. Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city.
c. Soliciting sales.
d. Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.
e. 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.
f. Installing, constructing, or supervising installation or construction of real or tangible personal property.
g. Soliciting, negotiating, or approving franchise, license, or other similar agreements.
h. Collecting current or delinquent accounts.
i. Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.
j. 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.
k. Rendering professional services such as those provided by accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball clubs and other sports organizations, chemists, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, veterinarians.
l. Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.
m. 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.
n. Investigating, resolving, or otherwise assisting in resolving customer complaints.
o. 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.
p. Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.
4. 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:
a. Meeting with suppliers of goods and services as a customer.
b. Meeting with government representatives in their official capacity, other than those performing contracting or purchasing functions.
c. 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.
d. Renting tangible or intangible property as a customer when the property is not used in the city.
e. 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.
f. Conducting advertising through the mail.
g. Soliciting sales by phone from a location outside the city.
5. 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 (E)(4) of this section.
The city expressly intends that engaging in business include 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.
F. “Licensee” means any business granted a business license.
G. “Person” includes one or more persons of either sex; corporations, including not-for-profit corporations and municipal corporations; partnerships, including limited partnerships; associations, joint ventures or any other entity capable of having an action at law brought against such entity, but excluding employees.
H. “Premises” shall mean and include all lands, structures and places, and any personal property, which either is affixed to or is used in connection with any such business conducted on such premises.
I. Peddler and/or Solicitor.
1. All persons, both principals and agents, as well as employers and employees, who shall sell, offer for or expose for sale, or who shall trade, deal or traffic in any personal property or services in the city by going from house to house or from place to place or by indiscriminately approaching individuals.
2. Sales by sample or for future delivery, and executory contracts of sale by solicitors or peddlers, are embraced within the preceding subsection; provided, however, that this chapter is not applicable to any salesperson or canvasser who solicits trade from wholesale or retail dealers within the city.
3. Any person, both principals and agents, as well as employers and employees, who, while selling or offering for sale any goods, wares, merchandise or anything of value, stands in a doorway or any unenclosed vacant lot, parcel of land or in any other place not used by such person as a permanent place of business.
J. “Transient merchant” means any person, firm or corporation who engages temporarily in the business of selling and delivering goods, wares or merchandise within the city, and who, in furtherance of such purposes, hires, leases, uses or occupies any building, structure or vacant lot, motor vehicle, trailer or railroad car. (Ord. 1295-18 § 1)
5.04.030 Business license required.
It is unlawful for any person to conduct, operate, engage in or practice any business in the city without having first obtained a business license for the current calendar year or unexpired portion thereof, and paying the fees prescribed herein, unless such activity is exempt as provided in SMC 5.04.060. (Ord. 1295-18 § 1)
5.04.040 Separate licenses required.
A person shall obtain a separate business license for each separate business engaged in, including but not limited to a separate business for each separate Unified Business Identifier number issued by the Washington State Department of Licensing. (Ord. 1295-18 § 1)
5.04.050 Change in nature or location of business.
Each business license shall authorize a particular type of business at the designated location. Any change in the nature of the business shall necessitate a new application for a business license. A change of location shall be reported in writing to the city clerk within 10 days of the change and, if in compliance with zoning and business regulatory ordinances, the existing business license shall be transferred to the new location. (Ord. 1295-18 § 1)
5.04.060 Exemptions.
Every person who engages in a business in the city that is exempt from the licensing provisions of this chapter under federal, state or local laws shall notify the city clerk in writing of the exemption and the basis for the exemption.
A. The following shall be exempt from the provisions of this chapter:
1. Minors engaged in business or operating a business concern where no other person is employed by the minor.
2. The United States or instrumentality thereof and the state of Washington or any municipal subdivision thereof, with respect to any exercise of government functions.
3. All special events sponsored by the city, but not to include participating commercial peddlers.
4. Business where the sale or contract for services occurs on business premises outside of the city and the only event occurring within the city is the mere delivery of the goods and services to the customer or client.
5. Any farmer, gardener, or other person who sells, delivers or peddles any fruits, vegetables, berries or any farm produce or edibles raised, gathered, or produced by such person within the state.
6. Peddlers operating at any city-sponsored or authorized civic event for a time period not to exceed five consecutive days, so long as each peddler’s name, address and telephone number is submitted to the city, in advance of the civic event, to be maintained in the city records.
7. Vendors operating at a farmers’ or public market or other city-sponsored or approved activity under the provisions of a temporary use permit; provided, that the name, address and telephone number of each vendor is provided in advance to the city to be maintained in the city records.
8. Casual and isolated sales, including garage sales conducted on residential premises in compliance with this code; provided, that not more than two such sales are made during the calendar year per Chapter 5.18 SMC.
9. Sales conducted as “fundraisers” for youth athletic, scouting, or educational organizations. By way of illustration and not limitation, these organizations may include boy scouts and girl scouts, youth soccer, basketball, football, softball, and other youth athletic organizations.
10. A person whose business activities are exempt from business licensing due to preemption by state or federal law.
B. The license fee portion of this chapter shall not apply to:
1. Tax Exempt Organizations. Any organization holding a current IRS 501(c)(3) exemption certificate issued by the Internal Revenue Service.
2. Nonprofit organizations carried on by religious, civic, charitable, benevolent, cultural, or youth organizations.
3. 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 director or designee. The threshold does not apply to regulatory license requirements or activities that require a specialized permit. (Ord. 1295-18 § 1)
5.04.070 License fees.
The fee for the business license required by this chapter shall be as established by periodic resolution of the city council and include the Business Licensing Service’s handling fee. The fee may be prorated as necessary to conform to SMC 5.04.170.
Any business that is exempt from the provisions of this chapter or has terminated its business activities in the city shall not be entitled to a refund of any license fee paid under this chapter. (Ord. 1295-18 § 1)
5.04.080 License to be posted.
All licenses issued pursuant to this chapter authorizing the operation or conducting of any occupation, business, trade or entertainment at a specified location shall be posted in a conspicuous place at such location. The licensee at the request of any interested person shall display such license. (Ord. 1295-18 § 1)
5.04.090 License – Exhibit.
Peddlers, solicitors and transient merchants are required to exhibit their license displayed on their person and fully visible while conducting any peddling activities. (Ord. 1295-18 § 1)
5.04.100 Licenses not transferable.
When the place of business of a person required to obtain a business license under this chapter is changed, the person shall inform the Business Licensing Service of the change. A change of place of business may require the filing of a new master application with the Business Licensing Service. Upon approval by the city of the new place of business, a new license shall be issued for the person’s new place of business. (Ord. 1295-18 § 1)
5.04.110 Ownership change.
When a licensed business changes ownership, the license of the previous owner may not be transferred to the new owner. The new owner shall apply for a license for the business by filing a master application with the Business Licensing Service. (Ord. 1295-18 § 1)
5.04.120 Fraudulent use of business license.
No person holding a city business license shall suffer or allow any other person for whom a separate license is required to operate under or display such person’s license and no person may maintain a business license obtained through false or fraudulent application or return of any false statement or representation in or in connection with any such application or return for such business license. (Ord. 1295-18 § 1)
5.04.130 Home occupation license.
In addition to the provisions of this chapter, home occupation licensees must also comply with the home occupation standards referenced in Chapter 16.38 SMC. (Ord. 1295-18 § 1)
5.04.140 Inspections – Right of entry.
The city clerk, or designee, or authorized representative of the department of community development is authorized to make such inspections of licensed premises and take such action as may be required to enforce the provisions of any business license or regulation ordinance. (Ord. 1347-21 § 3; Ord. 1295-18 § 1)
5.04.150 Use of streets.
No peddler shall have any exclusive right to any location in the public streets, nor be permitted a stationary location, nor be permitted to operate in any congested area where operations might impede or inconvenience the public. For the purpose of this section, the judgment of a police officer, exercised in good faith, shall be conclusive as to whether the area is congested or the public impeded or inconvenienced. (Ord. 1295-18 § 1)
5.04.160 Hours and notice.
No person shall engage in the business of peddler or solicitor between the hours of 8:00 p.m. and 9:00 a.m. (Ord. 1295-18 § 1)
5.04.170 Terms of license.
All business licenses shall expire on the date determined by the State of Washington Department of Licensing in cooperation with the city, and a licensee otherwise in compliance with the terms of this chapter may renew the business license by payment of the annual city license fee and Business Licensing Service handling fee within the time period established by the Business Licensing Service. The city license term or expiration date will be coordinated with the terms or expiration date of all other licenses or permits required by the state for each business. (Ord. 1295-18 § 1)
5.04.180 Renewal.
Renewals shall be handled by the State of Washington Department of Licensing in coordination with the city finance director. (Ord. 1295-18 § 1)
5.04.190 Penalty for late renewal.
If any license issued under this chapter is not obtained in a timely manner or renewed by the date of expiration of the existing license, a penalty may be assessed by the Department of Revenue, Business Licensing Service, as provided for in RCW 19.02.085. (Ord. 1295-18 § 1)
5.04.200 Denial, revocation or suspension of license.
A business license issued under this chapter may be revoked, suspended or denied for any one or more of the following reasons:
A. Failure to comply with any federal, state or local laws or regulations.
B. Failure to comply with any of the terms and conditions imposed by the city on the issuance of the business license.
C. Conduct of the business or activity in a manner that endangers the public health, welfare, or safety.
D. When the license was procured by fraud, false representation, evasions, or suppression of material fact. (Ord. 1295-18 § 1)
5.04.210 Termination of business activity.
Every person who has obtained a business license required by this chapter and who thereafter ceases to engage in business within the city shall, prior to the end of the calendar year during which business operations have been terminated, notify the city clerk in writing that business activities have ceased. Any business for which a license has been issued shall be presumed to continue in operation within the city unless notice of termination of business activities has been given as provided above, and enforcement proceedings may be commenced on the basis of such presumption. (Ord. 1295-18 § 1)
5.04.220 Violation.
A. Any person violating or failing to comply with any of the provisions of this chapter shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished as provided in SMC 1.10.080.
B. In addition to any criminal penalties provided for in subsection (A) of this section, the city may also impose a civil penalty in an amount not to exceed $1,000 per violation of this title. Any party assessed a civil penalty may appeal the decision on such penalty as provided for in Chapter 1.10 SMC. (Ord. 1295-18 § 1)
5.04.230 General business license application – Public record.
General business license applications made to the city clerk pursuant to this chapter shall be public information subject to inspection by all persons except to the extent those records may be deemed to be private or would result in unfair competitive disadvantage to such business enterprise if disclosed, all as more particularly described in Chapter 42.17 RCW. (Ord. 1295-18 § 1)