HomeMy WebLinkAbout4843 AN ORDINANCE of the City Council of the City of
Bremerton, Washington, creating a new chapter of the Bremerton
Municipal Code, Chapter 3.48 entitled "Business and Occupation
Taxes" separating the provisions relating to business and
occupation taxes from those related to business licenses and utility
taxes and further updating the provisions relating to business and
occupation taxes and providing for new provisions relating to the
administration of same.
WHEREAS, the provisions relating to business licenses, business and occupation
taxes, and utility taxes are contained in one chapter of the Bremerton Municipal Code; and
WHEREAS, separating business license, business and occupation taxes and utility
taxes into separate chapters and creating another chapter relating to the administration of said
codes in this ordinance and in companion ordinances considered concurrently with this
ordinance, would assist in the interpretation and administration of the various provisions related
to each code; and
WHEREAS, the City Council desires to create a new chapter relating to business
and occupation taxes based on the model tax code established through the Association of
Washington Cities for the purpose of creating a uniform system for application of the business
and occupation taxes and the administration of the same; NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON,
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. A new chapter, Chapter 3.48 is hereby added to the Bremerton
Municipal Code entitled "Business and Occupation Taxes" to read as follows:
CHAPTER 3.48
BUSINESS AND OCCUPATION TAXES
3.48.020 Exercise Of Revenue License Power. The provisions of this chapter shall be
deemed an exercise of the power of the City to license and/or tax for revenue. The provisions of
this chapter are subject to periodic statutory or administrative role changes or judicial
interpretations of the ordinances or rules. The responsibility rests with the licensee or taxpayer to
reconfirm tax computation procedures and remain in compliance with the City code.
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3.48.025 Business License - Required. It is unlawful for any person to engage in
business in the City without having first obtained a business license pursuant to Chapter 5.02
BMC.
3.48.028 Administrative Provisions. The provisions contained in chapter 3.86 BMC
shall be fully applicable to the provisions of this chapter except as expressly stated to the
contrary herein.
3.48.030 Definitions. In construing the provisions 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.
"Advance," "reimbursement."
(1) "Advance" means money or credits received by a taxpayer from a customer or client with
which the taxpayer is to pay costs or fees on behalf of the customer or client.
(2) "Reimbursement" means money or credits received from a customer or client to repay the
taxpayer for money or credits expended by the taxpayer in payment of costs or fees of the
customer or client.
"Agricultural product," "farmer."
(1) "Agricultural product" means any product of plant cultivation or animal husbandry including,
but not limited to: A product of horticulture, grain cultivation, vermiculture, viticulture, or
aquaculture as defined in RCW 15.83.480; plantation Christmas trees; turf; or any animal
including but not limited to an animal that is a private sector cultured aquatic product as defined
in RCW 15.83.480, or a bird, or insect, or the substances obtained from such an animal.
"Agricultural product" does not include animals intended to be pets.
(2) "Farmer" means any person engaged in the business of growing or producing, upon the
person's own lands or upon the lands in which the person has a present right of possession, any
agricultural product whatsoever for sale. "Farmer" does not include a person using such products
as ingredients in a manufacturing process, or a person growing or producing such products for
the person's own consumption. "Farmer" does not include a person selling any animal or
substance obtained therefrom in connection with the person's business of operating a stockyard
or a slanghter or packing house. "Farmer" does not include any person in respect to the business
of taking, cultivating, or raising timber.
"Artistic or cultural organization". As used in this chapter:
(1) The term "artistic or cultural organization" means an organization which is organized and
operated exclusively for the purpose of providing artistic or cultural exhibitions, presentations, or
performances or cultural or art education programs, as defined in subsection (10) of this section,
for viewing or attendance by the general public.
(2) The organization must be a not-for-profit corporation under chapter 24.03 RCW.
(3) The organization must be managed by a governing board of not less than eight (8) individuals
none of whom is a paid employee of the organization or by a corporation sole under chapter
24.12 RCW.
(4) No part of its income may be paid directly or indirectly to its members, stOckholders,
officers, directors, or trustees except in the form of services rendered by the corporation in
accordance with its purposes and bylaws.
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(5) Salary or compensation paid to its officers and executives must be only for actual services
rendered, and at levels comparable to the salary or compensation of like positions within the
state.
(6) Assets of the corporation must be irrevocably dedicated to the activities for which the
exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation,
may not inure directly or indirectly to the benefit of any member or individual except a non-
profit organization, association, or corporation which also would be entitled to the exemption.
(7) The corporation must be duly licensed or certified when licensing or certification is required
by law or regulation.
(8) The amounts received that qualify for exemption must be used for the activities for which the
exemption is granted.
(9) Services must be available regardless of race, color, national origin, ancestry, religion, age,
sex, marital status, sexual orientation, Vietnam or disabled veteran status, or the presence of any
mental or physical disability.
(10) The term "artistic or cultural exhibitions, presentations, or performances or cultural or art
education programs" is limited to:
(a) An exhibition or presentation of works of art or objects of cultural or historical
significance, such as those commonly displayed in art or history museums;
(b) A musical or dramatic performance or series of performances; or
(c) An educational seminar or program, or series of such programs, offered by the
organization to the general public on an artistic, cultural, or historical subject.
"Business." "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.
"Cash discount." "Cash discount" means a deduction from the invoiced amount allowed by the
seller if the bill is paid within a certain time period or before a specified date.
"City." "City" means City of Bremerton, Washington.
"Commercial or industrial use." "Commercial or industrial use" means the following uses of
products, including by-products, by the extractor or manufacturer thereofi
(1) Any use as a consumer;
(2) Any use in the manufacturing of products including articles, substances or commodities; or
(3) Consigning, shipping or transferring extracted or manufactured products to another either
without consideration or in the performance of contracts.
"Competitive telephone service." "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 Title
80 RCW and for which a separate charge is made.
"Consumer." "Consumer" means the following:
(1) Any person who purchases, acquires, owns, holds, or uses any tangible or intangible personal
property irrespective of the nature of the person's business and including, among others, without
limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate
real or personal property of or for a consumer other than for the purpose of:
(a) resale as tangible or intangible personal property in the regular courSe of business;
(b) incorporating such property as an ingredient or component of real or personal
property when installing, repairing, cleaning, altering, imprinting, improving, constructing, or
decorating such real or personal property of or for consumers;
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(c) incorporating such property as an ingredient or component of a new product or as a
chemical used in processing a new product when the primary purpose of such chemical is to
create a chemical reaction directly through contact with an ingredient of a new product; or
(d) consuming the property in producing ferrosilicon which is subsequently used in
producing magnesium for sale, if the primary purpose of such property is to create a chemical
reaction directly through contact with an ingredient of ferrosilicon;
(2) Any person engaged in any business activity taxable under BMC 3.48.050(1)(g);
(3) Any person who purchases, acquires, or uses any competitive telephone service as herein
defined, other than for resale in the regular course of business;
(4) Any person who purchases, acquires, or uses any personal, business, or professional service
defined as a retail sale or retail service in BMC 3.48.030 other than for resale in the regular
course of business;
(5) Any person who is an end user of software;
(6) Any person engaged in the business of "public road construction" in respect to tangible
personal property when that person incorporates the tangible personal property as an ingredient
or component of a publicly-owned street, place, road, highway, easement, right-of-way, mass
public transportation terminal or parking facility, bridge, tunnel, or trestle by installing, placing
or spreading the property in or upon the right-of-way of a publicly-owned street, place, road,
highway, easement, bridge, tunnel, or trestle or in or upon the site of a publicly-owned mass
public transportation terminal or parking facility;
(7) Any person who is an owner, lessee or has the right of possession to or an easement in real
property which is being constructed, repaired, decorated, improved, or otherwise altered by a
person engaged in business;
(8) Any person who is an owner, lessee, or has the right of possession to personal property which
is being constructed, repaired, improved, cleaned, imprinted, or otherwise altered by a person
engaged in business;
(9) Any person engaged in "government contracting." Any such person shall be a consumer
within the meaning of this subsection in respect to tangible personal property incorporated into,
installed in, or attached to such building or other structure by such person;
Nothing contained in this or any other subsection of this section shall be construed to modify any
other definition of "consumer."
"Deficiency." "Deficiency" means the amount of tax imposed by law less any tax reported by
the taxpayer on a tax return.
"Director." "Director" means the Director of Finance of the City or any officer, agent or
employee of the City designated to act on the Director's behalf.
"Eligible gross receipts tax." The term "eligible gross receipts tax" means a tax which:
(1) Is imposed on the act or privilege of engaging in business activities within section .050; and
(2) Is measured by the gross volume of business, in terms of gross receipts and is not an income
tax or value added tax; and
(3) Is not, pursuant to law or custOm, separately stated from the sales price; and
(4) Is not a sales or use tax, business license fee, franchise fee, royalty or severance tax measured
by volume or weight, or concession charge, or payment for the use and enjoyment of property,
property right or a privilege; and
(5) Is a tax imposed by a local jurisdiction, whether within or without the State of Washington,
and not by a Country, State, Province, or any other non-local jurisdiction above the County level.
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"Engaging in business" - "nexus"
(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 minimt~s business activities in the City without having to register and obtain a
business license or pay City business and occupation taxes. The activities listed in this section
are illustrative only and are not intended to narrow the definition of "engaging in business" in
subsection (1). 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, consultants, psychologists, court reporters, dentists, doctors,
detectives, laboratory operators, teachers, veterinarians.
(1) Meeting with customers or potential customers, even when no sales or orders are
solicited at the meetings.
(m) Training or recruiting employees, 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.
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(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.
(q) Accepting or executing a contract with the City, irrespective of whether goods or
services are delivered within or without the City, or whether the person's office or place of
business is within or without the City.
(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 and pay tax.
(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.
(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) Mere delivery of goods via common carrier.
(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.
(6) "Nexus" A person has created nexus with the City if, whether itself or by its employees,
agents, representative, independent contractors, brokers or others acting on its behalf, it: (a) is physically present in the City;
(b) endeavors to maintain a share of the market within the City; or
(c) avails itself of the economic benefits of the City.
The City expressly intends that engaging in business include any activity sufficient to
establish nexus for purposes of applying the tax 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.
"Extractor." "Extractor" means every person who from the person's own land or from the land
of another under a right or license granted by lease or contract, either directly or by contracting
with others for the necessary labor or mechanical services, for sale or for commercial or
industrial use, mines, quarries, takes or produces coal, oil, natural gas, ore, stone, sand, gravel,
clay, mineral or other natural resource product; or fells, cuts or takes timber, Christmas trees,
other than plantation Christmas trees, or other natural products; or takes fish, or takes, cultivates,
or raises shellfish, or other sea or inland water foods or products. "Extractor" does not include
persons performing under contract the necessary labor or mechanical services for others; persons
cultivating or raising fish entirely within confined rearing areas on the person's own land or on
land in which the person has a present right of possession; or persons who fell, cut, or take
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plantation Christmas trees from the person's own land or from land in which the person has a
present right of possession.
"Extractor for Hire" "Extractor for hire" means a person who performs under contract
necessary labor or mechanical services for an extractor.
"Government contracting." "Government contracting" means the constructing, repairing,
decorating, or improving of new or existing buildings or other structures under, upon, or above
real property of or for the United States, any instrumentality thereof, or a county or city housing
authority created pursuant to RCW Chapter 35.82, including the installing or attaching of any
article of tangible personal property therein or thereto, whether or not such personal property
becomes a part of the realty by virtue of installation. The term shall include the clearing of land
and the moving of earth of or for the Untied States, any instrumentality, thereof, or a county of
city housing authority.
"Gross income of the business." "Gross income of the business" means the value proceeding or
accruing by reason of the of the business activity 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.
"Gross proceeds of sales." "Gross proceeds of sales" means the value proceeding or accruing
from the sale of tangible personal property or for services rendered, without any deduction on
account of the cost of property sold, the cost of materials used, labor costs, interest, discount
paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any
deduction on account of losses.
"In this City," "within this City." "In this City" or "within this City" includes all federal areas
lying within the corporate city limits of the City.
"Janitorial Services." The term "Janitorial Services" shall mean those cleaning and care taking
services ordinarily performed by commercial janitor service businesses including, but not limited
to, wall and window washing, floor cleaning and waxing, and the cleaning in place of rugs,
drapes and upholstery, The term does not include painting, papering, repairing, furnace or septic
tank cleaning, snow removal, sandblasting, or cleanup related to construction activities.
"Manufacturer," "to manufacture."
(1) "Manufacturer" means every person who, either directly or by contracting with others for the
necessary labor or mechanical services, manufactures for sale or for commercial or industrial use
from the person' s own materials or ingredients any products. When the owner of equipment or
facilities furnishes, or sells to the customer prior to manufacture, materials or ingredients equal to
less than twenty percent (20%) of the total value of all materials or ingredients that become a
part of the finished product, the owner of the equipment or facilities will be deemed to be a
processor for hire and not a manufacturer. A business not located in this City that is the owner of
materials or ingredients processed for it in this City by a processor for hire shall be deemed to be
engaged in business as a manufacturer in this City.
(2) "To manufacture" means all activities of a commercial or industrial nature wherein labor or
skill is applied, by hand or machinery, to materials or ingredients so that as a result thereof a
new, different or useful product is produced for sale or commercial or industrial use, and shall
include:
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(a) the production of special made or custom made articles;
(b) the production of dental appliances, devices, restorations, substitutes, or other dental
laboratory products by a dental laboratory or dental technician;
(c) crashing and/or blending of rock, sand, stone, gravel, or ore; and
(d) the producing of articles for sale, or for commercial or industrial use from raw
materials or prepared materials by giving such materials, articles, and substances of trade or
commerce new forms, qualities, properties or combinations including, but not limited to, such
activities as making, fabricating, processing, refining, mixing, slaughtering, packing, aging,
curing, mild curing, preserving, canning, and the preparing and freezing of fresh fruits and
vegetables.
"Newspaper," "magazine," "periodical." "Newspaper" means a publication offered for sale
regularly at stated intervals at least once a week and printed on newsprint in tabloid or
broadsheet format folded loosely together without stapling, glue, or any other binding of any
kind.
"Magazine, or periodical" means any printed publication, other than a newspaper, issued and
offered for sale regularly at stated intervals at least once every three (3) months, including any
supplement or special edition of the publication. Any publication meeting this definition
qualifies regardless of its content.
"Non-profit corporation or non-profit organization." "Non-profit corporation or non-profit
organization" means a corporation or organization in which no part of the income can be
distributed to its members, directors, or officers and that holds a current tax exempt status as
provided under Sec. 501(c)(3) of the Internal Revenue Code, as hereafter amended, or is
specifically exempted from the requirement to apply for its tax exempt status under Sec.
501(c)(3) of the Internal Revenue Code, as hereafter amended. Where the term non-profit
organization is used, it is meant to include a non-profit corporation.
"Office", "place of business." "Office" or "place of business" means a fixed location or
permanent facility where the regular business of the person is conducted and which is either
owned by the person or over which the person exercises legal dominion and control. The regular
business of the person is presumed conducted at a location:
(1) Whose address the person uses as its business mailing address,
(2) Containing a telephone line listed in a public telephone directory or other similar publication
under the business name; and
(3) Where the person holds itself out to the general public as conducting its regular business
through signage or other means; and
(4) Where the person is required to obtain any appropriate state and local business license or
registration unless they are exempted by law from such requirement.
A vehicle such as a pick-up, van, truck, boat or other motor vehicle is not an office or
place of business. A post office box is not an office or place of business.
If a person has an office or place of business, the person's home is not an office or place of
business unless it meets the criteria for office or place of business above. If a person has no
office or place of business, the person's home or apartment within the City will be deemed the
place of business.
"Person." "Person" means any individual, receiver, administrator, executor, assignee, trustee in
bankruptcy, trust, estate, firm, co-partnership, 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
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a unit, whether mutual, cooperative, fraternal, non-profit, or otherwise and the United States or
any instrumentality thereof.
"Precious metal bullion or monetized bullion." "Precious metal bullion" means any precious
metal which has been put through a process of smelting or refining, including, but not limited to,
gold, silver, platinum, rhodium, and palladium, and which is in such state or condition that its
value depends upon its contents and not upon its form. For purposes of this section, "monetized
bullion" means coins or other forms of money manufactured from gold, silver, or other metals
and heretofore, now, or hereafter used as a medium of exchange under the laws of this state, the
United States, or any foreign nation, but does not include coins or money sold to be
manufactured into jewelry or works of art.
"Processing for hire." "Processing for hire" means the performance of labor and mechanical
services upon materials or ingredients belonging to others so that as a result a new, different or
useful product is produced for sale, or commercial or industrial use. A processor for hire is any
person who would be a manufacturer if that person were performing the labor and mechanical
services upon that person's own materials or ingredients. If a person furnishes, or sells to the
customer prior to manufacture, materials or ingredients equal to twenty percent (20%) or more of
the total value of all materials or ingredients that become a part of the finished product the
person will be deemed to be a manufacturer and not a processor for hire.
"Product", "Byproduct." "Product" means tangible personal property, including articles,
substances, or commodities created, brought forth, extracted, or manufactured by human or
mechanical effort.
"Byproduct" means any additional product, other than the principal or intended product, which
results from extracting or manufacturing activities and which has a market value, without regard
to whether or not such additional product was an expected or intended result of the extracting or
manufacturing activities.
"Public road construction." "Public road construction" means the building, repairing, or
improving of any street, place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a
municipal corporation or a political subdivision of the state or by the United States and which is
used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of
any kind.
"Reporting period." "Reporting period" means:
(1) A one-month period beginning the first day of each calendar month (monthly); or
(2) A three-month period beginning the first day of January, April, July or October of each year
(quarterly); or
(3) A twelve-month period beginning the first day of January of each year (annual).
Retail Service. "Retail service" shall include the sale of or charge made for personal,-business,
or professional services including amounts designated as interest, rents, fees, admission, and
other service emoluments however designated, received by persons engaging in the following
business activities:
(1) Anmsement and recreation services including but not limited to golf, pool, billiards, skating,
bowling, swimming, bungee jumping, ski lifts and tows, basketball, racquet ball, handball,
squash, tennis, batting cages, day trips for sightseeing purposes, and others, when provided to
consumers. "Amusement and recreation services" also include the provision of related facilities
such as basketball courts, tennis courts, handball courts, swimming pools, and charges made for
providing the opportunity to dance. The term "amusement and recreation services" does not
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include instructional lessons to learn a particular activity such as tennis lessons, swimming
lessons, or archery lessons.
(2) Abstract, title insurance, and escrow services;
(3) Credit bureau services;
(4) Service charges associated with tickets to professional sporting events; and
(5) The following personal services: Physical fitness services, tanning salon services, tattoo
parlor services, steam bath services, turkish bath services, escort services, and dating services.
(6) The term shall also include the renting or leasing of tangible personal property to consumers
and the rental of equipment with an operator.
"Return." "Return" means any document a person is required by the City to file to satisfy or
establish a tax or fee obligation that is administered or collected by the City and that has a
statutorily defined due date.
"Royalties." "Royalties" means compensation for the use of intangible property, such as
copyrights, patents, licenses, franchises, trademarks, tradenames, and similar items.
"Sale," "casual or isolated sale."
(1) "Sale" means any transfer of the ownership of, title to, or possession of, property for a
valuable consideration and includes any activity classified as a "sale at retail," "retail sale, or
"retail service." It includes renting or leasing, conditional sale contracts, leases with option to
purchase, and any contract under which possession of the property is given to the purchaser but
title is retained by the vendor as security for the payment of the purchase price. It also includes
the furnishing of food, drink, or meals for compensation whether consumed upon the premises or
not.
(2) "Casual or isolated sale" means a sale made by a person who is not engaged in the business
of selling the type of property involved on a routine or continuous basis.
"Sale at retail," "retail sale."
(1) "Sale at retail" or "retail sale" means every sale of tangible personal property (including
articles produced, fabricated, or imprinted) to ail persons irrespective of the nature of their
business and including, among others, without limiting the scope hereof, persons who install,
repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers,
other than a sale to a person who presents a resale certificate under RCW 82.04.470 and who:
(a) Purchases for the purpose of resale as tangible personal property in the regular course
of business without intervening use by such person; or
(b) Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates real or
personal property of or for consumers, if such tangible personal property becomes an ingredient
or component of such real or personal property without intervening use by such person; or
(c) Purchases for the purpose of consuming the property purchased in producing for sale
a new article of tangible personal property or substance, of which such property becomes an
ingredient or component or is a chemical used in processing, when the primary purpose of such
chemical is to create a chemical reaction directly through contact with an ingredient of a new
article being produced for sale; or
(d) Purchases for the purpose of consuming the property purchased in producing
ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose
of such property is to create a chemical reaction directly through contact with an ingredient of
ferrosilicon; or
(e) Purchases for the purpose of providing the property to consumers as part of
competitive telephone service, as defined in RCW 82.04.065. The term shall include every sale
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of tangible personal property which is used or consumed or to be used or consumed in the
performance of any activity classified as a "sale at retail" or "retail sale" even though such
property is resold or utilized as provided in (a), (b), (c), (d), or (e) of this subsection following
such use.
(2) "Sale at retail" or "retail sale" also means every sale of tangible personal property to persons
engaged in any business activity which is taxable under BMC 3.48.050(1)(g).
(3) "Sale at retail" or "retail sale" shall include the sale of or charge made for tangible personal
property consumed and/or for labor and services rendered in respect to the following:
(a) The installing, repairing, cleaning, altering, imprinting, or improving of tangible
personal property of or for consumers, including charges made for the mere use of facilities in
respect thereto, but excluding charges made for the use of coin-operated laundry facilities when
such facilities are situated in an apartment house, rooming house, or mobile home park for the
exclusive use of the tenants thereof, and also excluding sales of laundry service to nonprofit
health care facilities, and excluding services rendered in respect to live animals, birds and
insects;
(b) The constructing, repairing, decorating, or improving of new or existing buildings or
other structures under, upon, or above real property of or for consumers, including the installing
or attaching of any article of tangible personal property therein or thereto, whether or not such
personal property becomes a part of the realty by virtue of installation, and shall also include the
sale of services or charges made for the clearing of land and the moving of earth excepting the
mere leveling of land used in commercial farming or agriculture;
(c) The charge for labor and services rendered in respect to constructing, repairing, or
improving any structure upon, above, or under any real property owned by an owner who
conveys the property by title, possession, or any other means to the person performing such
construction, repair, or improvement for the purpose of performing such construction, repair, or
improvement and the property is then reconveyed by title, possession, or any other means to the
original owner;
(d) The sale of or charge made for labor and services rendered in respect to the cleaning,
fumigating, razing or moving of existing buildings or structures, but shall not include the charge
made for janitorial services, which is taxed as a service in this chapter;
(e) The sale of or charge made for labor and services rendered in respect to automobile
towing and similar automotive transportation services, but not in respect to those required to
report and pay taxes under chapter 82.16 RCW;
(f) The sale of and charge made for the furnishing of lodging and all other services,
except network telephone Service and cable service, by a hotel, rooming house, tourist court,
motel, trailer camp, and the granting of any similar license to use real property, as distinguished
from the renting or leasing of real property, and it shall be presumed that the occupancy of real
property for a continuous period of one month or more constitutes a rental or lease of real
property and not a mere license to use or enjoy the same;
(g) The sale of or charge made for tangible personal property, labor and services to
persons taxable under (a), (b), (c), (d), (e), and (f) of this subsection when such sales or charges
are for property, labor and services which are used or consumed in whole or in part by such
persons in the performance of any activity defined as a "sale at retail" or "retail sale" even though
such property, labor and services may be resold after such use or consumption. Nothing
contained in this subsection shall be construed to modify subsection (1) of this section and
nothing contained in subsection (1) of this section shall be construed to modify this subsection.
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(4) "Sale at retail" or "retail sale" shall also include the providing of competitive telephone
service to consumers.
(5) "Sale at retail" or "retail sale" shall also include the sale of canned software other than a sale
to a person who presents a resale certificate under RCW 82.04.470, regardless of the method of
delivery to the end user, but shall not include custom software or the customization of canned
software.
(6) "Sale at retail" or "retail sale" shall also include the sale of or charge made for labor and
services rendered in respect to "public road construction."
(7) "Sale at retail" or "retail sale" shall also include the sale of or charge made for labor and
services rendered in respect to "government contracting."
(8) "Sale at retail" or "retail sale" shall also include automobile parking and storage garage
services;
(9) "Sale at retail" or "retail sale" shall also include landscape maintenance and horticultural
services but excluding (i) horticultural services provided to farmers and (ii) pruning, trimming,
repairing, removing, and clearing of trees and brush near electric transmission or distribution
lines or equipment, if performed by or at the direction of an electric utility;
(10) "Sale at retail" or "retail sale" shall not include the sale of services or charges made for the
clearing of land and the moving of earth of or for the United States, any instrumentality thereof,
or a county or city housing authority. Nor shall the term include the sale of services or charges
made for cleaning up for the United States, or its instrumentalities, radioactive waste and other
byproducts of weapons production and nuclear research and development. This is reported under
the service or other classification).
(11) "Sale at retail" or "retail sale" shall not include the sale of or charge made for labor and
services rendered for environmental remedial action as defined in RCW 82.04.2635(2) (This is
reported under the service and other classification).
"Sale at wholesale," "wholesale sale." "Sale at wholesale" or "wholesale sale" means any sale
of tangible personal property which is not a retail sale, and any charge made for labor and
services rendered for persons who are not consumers, in respect to real or personal property, if
such charge is expressly defined as a retail sale when rendered to or for consumers. Sale at
wholesale also includes the sale of network telephone service to a telecommunications company
as defined in RCW 80.04.010 for the purpose of resale, as contemplated by RCW 35.21.715.
"Software", "canned software," "custom software," "customization of canned software,"
"master copies," "retained rights."
(1) "Canned software" means software that is created for sale to more than one (1) person. For
purposes of this chapter, canned software is deemed to be tangible personal property regardless
of the method of delivery-tangible media (e.g., disk or installed on hardware) or intangible (e.g.,
electronically over telecommunications paths).
(2) "Custom software" means software created for a single person.
(3) "Customization of canned software" means any alteration, modification, or development of
applications using or incorporating canned software to specific individualized requirements of a
single person. Customization of canned software includes individualized configuration of
software to work with other software and computer hardware but does not include routine
installation. Customization of canned software does not change the underlying character or
taxability of the original canned software.
(4) "Master copies" of software means copies of software from which a software developer,
author, inventor, publisher, licensor, sublicensor, or distributor makes copies for sale or license.
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The software encoded on a master copy and the media upon which the software resides are both
ingredients of the master copy.
(5) "Retained rights" means any and all rights, including intellectual property rights such as those
rights arising from copyrights, patents, and trade secret laws, that are owned or are held under
contract or license by a software developer, author, inventor, publisher, licensor, sublicensor, or
distributor.
(6) "Software" means any information, program, or routine, or any set of one (1) or more
programs, routines, or collections of information used, or intended for use, to convey information
that causes one or more computers or pieces of computer-related peripheral equipment, or any
combination thereof, to perform a task or set of tasks. "Software" includes the associated
documentation, materials, or ingredients regardless of the media upon which that documentation
is provided, that describes the code and its use, operation, and maintenance and that typically is
delivered with the code to the consumer. All software is classified as either canned or custom.
"Successor." "Successor" means any person to whom a taxpayer quitting, selling out,
exchanging, or disposing of a business sells or otherwise conveys, directly or indirectly, in bulk
and not in the ordinary course of the taxpayer's business, any part of the materials, supplies,
memhandise, inventory, fixtures, or equipment of the taxpayer. Any person obligated to fulfill
the terms of a contract shall be deemed a successor to any contractor defaulting in the
performance of any contract as to which such person is a surety or guarantor.
"Taxpayer." "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.
"Tax year," "taxable year." "Tax year" or "taxable year" means the calendar year.
"Tuition fee." "Tuition fee" includes library, laboratory, health service and other special fees,
and amounts charged for room and board by an educational institution when the property or
service for which such charges are made is furnished exclusively to the students or faculty of
such institution. "Educational institution," as used in this section, means only those institutions
created or generally accredited as such by the state and includes educational programs that such
educational institution cosponsors with a non-profit organization, as defined by the Internal
Revenue Code Section 501(c)(3), as hereafter amended, if such educational institution grants
college credit for coursework successfully completed through the educational~program, or an
approved branch campus of a foreign degree-granting institution in compliance with chapter
28B.90 RCW, and in accordance with RCW 82.04.4332 or defined as a degree-granting
institution under RCW 28B.85.010(3) and accredited by an accrediting association recognized by
the United States secretary of education, and offering to students an educational program of a
general academic nature or those institutions which are not operated for profit and which are
privately endowed under a deed of trust to offer instruction in trade, industry, and agriculture, but
not including specialty schools, business colleges, other trade schools, or similar institutions.
"Value proceeding or accruing." "Value proceeding or accruing" means the consideration,
whether money, credits, rights, or other property expressed in terms of money, a person is
entitled to receive or which is actually received or accrued. The term shall be applied, in each
case, on a cash receipts or accrual basis according to which method of accounting is regularly
employed in keeping the books of the taxpayer. The value proceeding or accruing from sales on
the installment plan under conditional contracts of sale shall be reported as of the dates when the
payments become due.
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"Value of products."
(1) The value of products, including by-products, extracted or manufactured, shall be determined
by the gross proceeds derived from the sale thereof whether such sale is at wholesale or at retail,
to which shall be added all subsidies and bonuses received from the purchaser or from any other
person with respect to the extraction, manufacture, or sale of such products or by-products by the
seller.
(2) Where such products, including by-products, are extracted or manufactured for commercial
or industrial use; and where such products, including by-products, are shipped, transported or
transferred out of the City, or to another person, without prior sale or are sold under
circumstances such that the gross proceeds from the sale are not indicative of the true value of
the subject matter of the sale; the value shall correspond as nearly as possible to the gross
proceeds from sales in this state of similar products of like quality and character, and in similar
quantities by other taxpayers, plus the amount of subsidies or bonuses ordinarily payable by the
purchaser or by any third person with respect to the extraction, manufacture, or sale of such
products. In the absence of sales of similar products as a guide to value, such value may be
determined upon a cost basis. In such cases, there shall be included every item of cost
attributable to the particular article or article extracted or manufactured, including direct and
indirect overhead costs. The Director may prescribe rules for the purpose of ascertaining such
values.
3.48.040 Agency - Sales And Services By Agent, Consignee, Bailee, Factor Or
Auctioneer.
(1) Sales in own name - sales or purchases as agent. Every person, including agents, consignees,
bailees, factors or auctioneers having either actual or constructive possession of tangible personal
property or having possession of the documents of title thereto, with power to sell such tangible
personal property in the person's own name and actually so selling shall be deemed the seller of
such tangible personal property within the meaning of this chapter.
The burden shall be upon the taxpayer in every case to establish the fact that such taxpayer is not
engaged in the business of selling tangible personal property but is acting merely as broker or
agent in promoting sales or making purchases for a principal. Such claim will be recognized
only when the contract or agreement between such persons clearly establishes the relationship of
principal and agent and when the following conditions are complied with:
(a) The books and records of the broker or agent show the transactions were made in the
name and for the account of the principal, and show the name of the actual owner of the property
for whom the sale was made, or the actual buyer for whom the purchase was made.
(b) The books and records show the amount of the principal's gross sales, the amount of
commissions and any other incidental income derived by the broker or agent from such sales.
The principal's gross sales must not be reflected as the agent's income on any of the agent's
books and records. Commissions must be computed according to a set percentage or amount,
which is agreed upon in the agency agreement.
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(c) No ownership rights may be conferred to the agent unless the principal refuses to pay,
or refuses to abide by the agency agreement. Sales or purchases of any goods by a person who
has any ownership rights in such goods shall be taxed as retail or wholesale sales.
(d) Bulk goods sold or purchased on behalf of a principal must not be co-mingled with
goods belonging to another principal or lose their identity as belonging to the particular
principal. Sales or purchases of any goods which have been co-mingled or lost their identity as
belonging to the principal shall be taxed as retail or wholesale sales.
(2) If the above requirements are not met the consignor, bailor, principal or other shall be
deemed a seller of such property to the agent, consignee, bailee, factor or auctioneer.
(3) Services in own name - procuring services as agent. For purposes of this subsection, an agent
is a person who acts under the direction and control of the principal in procuring services on
behalf of the principal that the person could not itself render or supply. Amounts received by an
agent for the account of its principal as advances or reimbursements are exempted from the
measure of the tax only when the agent is not primarily or secondarily liable to pay for the
services procured.
Any person who claims to be acting merely as agent in obtaining services for a principal
will have such claim recognized only when the contract or agreement between such persons
clearly establishes the relationship of principal and agent and when the following conditions are
complied with:
(a) The books and records of the agent show that the services were obtained in the name
and for the account of the principal, and show the actual principal for whom the purchase was
made.
(b) The books and records show the amount of the service that was obtained for the
principal, the amount of commissions and any other income derived by the agent for acting as
such. Amounts received from the principal as advances and reimbursements must not be
reflected as the agent's income on any of the agent's books and records. Commissions must be
computed according to a set percentage or amount, which is agreed upon in the agency
agreement.
3.48.050 Imposition Of The Tax - Tax Or Fee Levied.
(1) Tax Levied. There is hereby levied upon and shall be collected from every person a tax for
the act or privilege of engaging in business activities within the City, whether the person's office
or place of business be within or without the City. The tax shall be in amounts to be determined
by application of rates against gross proceeds of sale, gross income of business, or value of
products, including by-products, as the case may be, as follows:
(a) Extractor. Upon every person engaging within the City in business as an extractor; as
to such persons the amount of the tax with respect to such business shall be equal to the value of
the products, including by-products, extracted for sale or for commercial or industrial use,
multiplied by the rate of one and six-tenths of one percent (.0016). The measure of the tax is the
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value of the products, including by-products, so extracted, regardless of the place of sale or the
fact that deliveries may be made to points outside the City.
(b) Manufacturer. Upon every person engaging within the City in business as a
manufacturer; as to such persons the amount of the tax with respect to such business shall be
equal to the value of the products, including by-products, manufactured, multiplied by the rate of
one and six-tenths of one percent (.0016). The measure of the tax is the value of the products,
including by-products, so manufactured, regardless of the place of sale or the fact that deliveries
may be made to points outside the City.
(c) Wholesale. Upon every person engaging within the City in the business of making
sales at wholesale, as to such persons, the amount of tax with respect to such business shall be
equal to the gross proceeds of such sales of the business without regard to the place of delivery
of articles, commodities or merchandise sold, multiplied by the rate of one and six-tenths of one
percent (.0016).
(d) Retail. Upon every person engaging within the City in the business of making sales at
retail; as to such persons, the amount of tax with respect to such business shall be equal to the
gross proceeds of such sales of the business without regard to the place of delivery of articles,
commodities or merchandise sold, multiplied by the rate of one and one quarter of one percent
(.00125).
(e) Printing and Publishing. Upon every person engaging within the City in the business
of (i) printing, (ii) both printing and publishing newspapers, magazines, periodicals, books,
music, and other printed items, (iii) publishing newspapers, magazines and periodicals, (iv)
extracting for hire, and (v) processing for hire; as to such persons, the amount of tax on such
business shall be equal to the gross income of the business multiplied by the rate of one and nine-
tenths of one percent (.0019).
(f) Retail service. Upon every person engaging within the City in the business of making
sales of retail services; as to such persons, the amount of tax with respect to such business shall
be equal to the gross proceeds of sales multiplied by the rate of two tenths of one percent (.002).
(g) Service.. Upon every other person engaging within the City in any business activity
other than or in addition to those enumerated in the above subsections; as to such persons, the
amount of tax on account of such activities shall be equal to the gross income of the business
multiplied by the rate of two tenths of one percent (.002). This subsection includes, among
others, and without limiting the scope hereof (whether or not title to material used in the
performance of such business passes to another by accession, merger or other than by outright
sale), persons engaged in the business of developing, or producing custom software or of
customizing canned software, producing royalties or commissions, and persons engaged in the
business of rendering any type of service which does not constitute a sale at retail or a sale at
wholesale.
(2) Any person engaging in any business activity within the City shall pay, on a quarterly basis,
the greater of five ($5) dollars or the occupation tax, if any, imposed by this chapter, unless such
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person makes an annual return with the approval of the Director. Any person making an annual
return shall pay, on an annual basis, the greater of twenty ($20) dollars or the occupation tax, if
any, imposed by this chapter. Exempt from this minimum quarterly occupation tax are nonprofit
organizations whose occupation tax liability is less than five ($5) dollars for any one quarter.
(3) The tax levied pursuant to this chapter shall be in addition to any other tax or fee that may be
imposed or levied by the City of Bremerton.
3.48.060 Doing Business With The City. Except where such a tax is otherwise levied
and collected by the City from such person, there is hereby levied a tax on the privilege of
accepting or executing a contract with the City. Such tax shall be levied and collected whether
goods or services are delivered within or without the City and whether or not such person has an
office or place of business within or without the City.
As to such persons the amount of tax shall be equal to the gross contract price multiplied
by the rate under BMC 3.48.050 that would otherwise apply if the sale or service were taxable
pursuant to that section.
3.48.070 Multiple Activities Credit When Activities Take Place In One Or More
Cities With Eligible Gross Receipt Taxes. This section provides a tax credit for taxpayers
engaged in multiple taxable activities. The section provides a credit against eligible selling or
manufacturing taxes imposed by the City for extracting or manufacturing taxes paid to the City
or to any other local jurisdiction with respect to the same products. The tax credit does not
depend upon whether a person that sells in the City extracts or manufactures in the City or in
another jurisdiction to which it has paid an eligible gross receipts tax. The tax credit does not
depend on whether a person that manufactures in the City extracts in the City or in another
jurisdiction to which it has paid an eligible gross receipts tax. The credit is available to any
person that pays an eligible gross receipts tax on the applicable activities, regardless of where it
conducts business. The result of this section is that a city in which selling takes place gives up
the tax to the manufacturing jurisdiction and the manufacturing jurisdiction gives up the tax to
the extracting jurisdiction, whether those jurisdictions are inside or outside the State of
Washington.
(1) Persons who engage in business activities that are within the purview of two (2) or more
subsections of BMC 3.48.050 shall be taxable under each applicable subsection.
(2) Notwithstanding anything to the-contrary herein, if imposition of the City's tax would place
an undue burden upon interstate commerce or violate constitutional requirements, a taxpayer
shall be allowed a credit to the extent necessary to preserve the validity of the City's tax, and still
apply the City tax to as much of the taxpayer's activities as may be subject to the City's taxing
authority.
(3) To take the credit authorized by this section, a taxpayer must be able to document that the
amount of tax sought to be credited was paid upon the same gross receipts used in computing the
tax against which the credit is applied and that the taxpayer paid the amount of tax sought to be
credited.
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(4) Credit for persons that sell in the City products that they extract or manufacture. Persons
taxable under the retailing or wholesaling classification with respect to selling products in this
City shall be allowed a credit against those taxes for any eligible gross receipts taxes paid (a)
with respect to the manufacturing of the products sold in the City, and (b) with respect to the
extracting of the products, or the ingredients used in the products, sold in the City. The amount
of the credit shall not exceed the tax liability arising under this chapter with respect to the sale of
those products.
(5) Credit for persons that manufacture products in the City using ingredients they extract.
Persons taxable under the manufacturing classification with respect to manufacturing products in
this City shall be allowed a credit against those taxes for any eligible gross receipts tax paid with
respect to extracting the ingredients of the products manufactured in the City. The amount of the
credit shall not exceed the tax liability arising under this chapter with respect to the
manufacturing of those products.
(6) Credit for persons that sell within the City products that they print, or publish and print.
Persons taxable under the retailing or wholesaling classification with respect to selling products
in this City shall be allowed a credit against those taxes for any eligible gross receipts taxes paid
with respect to the printing, or the printing and publishing, of the products sold within the City.
The amount of the credit shall not exceed the tax liability arising under this chapter with respect
to the sale of those products.
3.48.075 Deductions To Prevent Multiple Taxation Of Transactions Involving More Than
One City With An Eligible Gross Receipts Tax. This section establishes deductions to be
applied when a single taxable activity is taxable by more than one jurisdiction that imposes an
eligible gross receipts tax. To eliminate the possibility of the same sale or service being taxed
more than once by cities that maintain nexus and an eligible gross receipts tax, the cities
deductions set forth in this section shall apply.
Sales. A taxpayer that has paid an eligible gross receipts tax on the sale to the jurisdiction where
the product is delivered may deduct the gross receipts used to measure that tax from the measure
of the tax owed to another jurisdiction on the sale. If a taxpayer has not paid tax to the
jurisdiction where the product is delivered, then no deduction is allowed. The sale shall be taxed
by the city where the office or place of business that generated the sale is located.
Service. A taxpayer that has paid an eligible gross receipts tax on services to the jurisdiction
where the service is performed may deduct the gross receipts used to measure that tax from the
measure of the tax owed to another jurisdiction on that service. If a taxpayer has not paid tax to
the jurisdiction where the service is performed, then no deduction is allowed. The service
income shall be taxed by the city where the office or place of business that generated the sale is
located. For both sales and services, the order of taxing rights is delivery city, first; and business
office location, second.
General Business Activities Other Than Services. The eligible gross receipts tax on income
derived from intangibles such as royalties, licenses, trademarks, patents and goodwill, and
reportable under the general business classification BMC 3.48.050(1)(g), shall be assigned to the
headquarter's office or business location. A taxpayer that has paid an eligible gross receipts tax
on such activities to the jurisdiction where the taxpayer maintains a headquarters office, may
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deduct the gross receipts used to measure that tax from the measure of the tax owed to other
jurisdictions on the same activity.
Business Conducted With Other Cities. A taxpayer that has paid an eligible gross receipts tax on
the privilege of accepting or executing a contract with a city may deduct the contract price used
to measure the tax from the measure of the tax owed to another city on the same activity.
(1) Amounts subject to an eligible gross receipts tax in another city that also maintains nexus
over the same activity. A taxpayer that is subject to an eligible gross receipts tax on the same
activity in more than one jurisdiction may be entitled to a deduction as follows:
(a) A taxpayer that has paid an eligible gross receipts tax with respect to a sale of goods
or services to a jurisdiction in which the goods are delivered or the services are provided may
deduct an amount equal to the gross receipts used to measure that tax from the measure of the. tax
owed to the City.
(b) Notwithstanding the above, a person that is subject to an ehgible gross receipts tax in
more than one jurisdiction on the gross income derived from intangibles such as royalties,
trademarks, patents, or goodwill may deduct from the measure of the tax on those amounts the
gross income used in measuring the eligible gross receipts tax paid to the other jurisdiction
where the headquarters is located.
(c) A taxpayer that has paid an eligible gross receipts tax on the privilege of accepting or
executing a contract with another city may deduct an amount equal to the contract price used to
measure the tax due to the other city from the measure of the tax owed to the City.
(2) Person manufacturing products within and without. A person manufacturing products within
the City using products manufactured by the same person outside the City may deduct from the
measure of the manufacturing tax the value of products manufactured outside the City and
included in the measure of an eligible gross receipts tax paid with respect to manufacturing such
products.
3.48.090 Exemptions.
(1) Non-Profit Corporations Or Non-Profit Organizations. This section shall not apply to non-
profit organizations exempt from federal income tax under Section 501(c)(3) of the Internal
Revenue Code, as hereafter amended, except with respect to retail sales of such persons.
(2) Health maintenance organization, health care service contractor, certified health plan.
Beginning on January 1, 2000 this chapter does not apply to any health maintenance
organization, health care service contractor, or certified health plan in respect to premiums or
prepayments that are taxable under RCW 48.14.0201.
(3) Public utilities. This chapter shall not apply to any person in respect to a business activity
with respect to which tax- liability is specifically imposed under the provisions of Chapter 3.50
BMC.
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(4) Investments - dividends from subsidiary corporations. This chapter shall not apply to
amounts derived by persons, other than those engaging in banking, loan, security, or other
financial businesses, from investments or the use of money as such, and also amounts derived as
dividends by a parent from its subsidiary corporations.
(5) International banking facilities. This chapter shall not apply to the gross receipts of an
international banking facility. As used in this subsection, an "international banking facility"
means a facility represented by a set of asset and liability accounts segregated on the books and
records of a commercial bank, the principal office of which is located in this state, and which is
incorporated and doing business under the laws of the United States or of this state, a United
States branch or agency of a foreign bank, an Edge corporation organized under Section 25(a) of
the Federal Reserve Act, 12 United States Code 611-631, or an Agreement corporation having an
agreement or undertaking with the Board of Governors of the Federal Reserve System under
Section 25 of the Federal Reserve Act, 12 United States Code 601-604(a), that includes only
international banking facility time deposits (as defined in subsection (a)(2) of Section 204.8 of
Regulation D (12 CFR Part 204), as promulgated by the Board of Governors of the Federal
Reserve System), and international banking facility extensions of credit (as defined in subsection
(a)(3) of Section 204.8 of Regulation D).
(6) Insurance business. This chapter shall not apply to amounts received by any person or agent
who is an insurer upon which a tax based on gross premiums is paid to the state pursuant to
RCW 48.14.020; provided that the provisions of this subsection shall not exempt any person
engaging in the business of insurance as a broker as defined in RCW 48.17.020 or as a solicitor
as defined in RCW 48.17.030; and provided further, that the provisions of this subsection shall
not exempt any bonding company from tax with respect to gross income derived from the
completion of any contract as to which it is a surety, or as to any liability as successor to the
liability of the defaulting contractor.
(7) Farmers - agriculture. This chapter shall not apply to any farmer in respect to amounts
received from selling fruits, vegetables, berries, butter, eggs, fish, milk poultry, meats or any
other agricultural product that is raised, caught, produced, or manufactured by such persons.
(8) Athletic exhibiti°ns~ This chapter shall not apply to any person in respect to the business of
conducting boxing contests and sparring or wrestling matches and exhibitions for the conduct of
which a license must be Secured from the State Boxing Commission.
(9) Racing. This chapter shall not apply to any person in respect to the business of conducting
race meets for the conduct of which a license must be secured from the Washington State Horse
Racing Commission.
(10) Ride sharing. This chapter does not apply to any funds received in the course of commuter
ride sharing or ride sharing for persons with special transportation needs in accordance with
RCW 46.74.010.
(11) Employees. This chapter shall not apply to:
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(a) Any person in respect to the person's employment in the capacity as an
employee or servant as distinguished from that of an independent contractor. For the purposes of
this subsection, the definition of employee shall include those persons that are defined in the
Internal Revenue Code, as hereafter amended.
(b) A booth renter, as defined by RCW 18.16.020, is an independent
contractor for purposes of this chapter.
(12) Amounts derived from sale of real estate. This chapter shall not apply to gross proceeds
derived from the sale of real estate. This, however, shall not be construed to allow an exemption
of amounts received as commissions from the sale of real estate, nor as fees, handling charges,
discounts, interest or similar financial charges resulting from, or relating to, real estate
transactions.
(13) Mortgage brokers' third-party provider services trust accounts. This chapter shall not apply
to amounts received from trust accounts to mortgage brokers for the payment of third-party costs
if the accounts are operated in a manner consistent with RCW 19.146.050 and any rules adopted
by the director of financial institutions.
(14) Amounts derived from manufacturing, selling or distributing motor vehicle fuel. This
chapter shall not apply to the manufacturing, selling, or distributing motor vehicle fuel, as the
term "motor vehicle fuel" is def'med in RCW 82.36.010 and exempt under RCW 82.36.440,
provided that any fuel not subjected to the state fuel excise tax, or any other applicable deduction
or exemption, will be taxable under this chapter.
(15) Amounts derived from liquor, and the sale or distribution of liquor. This chapter shall not
apply to liquor as defined in RCW 66.04.010 and exempt in RCW 66.08.120.
(16) Casual and isolated sales. This chapter shall not apply to the gross proceeds derived from
casual or isolated sales.
(17) Accommodation sales. This chapter shall not apply to sales for resale by persons regularly
engaged in the business of making retail sales of the type of property so sold to other persons
similarly engaged in the business of selling such property where (1) the amount paid by the
buyer does not exceed the amount paid by the seller to the vendor in the acquisition of the article
and (2) the sale is made as an accommodation to the buyer to enable the buyer to fill a bona fide
existing order of a customer or is made within fourteen days to reimburse in kind a previous
accommodation sale by the buyer to the seller.
(18) Taxes collected as trust funds. This chapter shall not apply to amounts collected by the
taxpayer from third parties to satisfy third party obligations to pay taxes such as the retail sales
tax, use tax, and admission tax.
(19) Renting and/or leasing property.. This chapter shall not apply to renting and/or leasing of
real property as defined in Chapter 5.02 BMC.
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3.48.100 Deductions. In computing the license fee or tax, there may be deducted from
the measure of tax the following items:
(1) Compensation from public entities for health or social welfare services - exception. In
computing tax, there may be deducted from the measure of tax amounts received from the United
States or any instrumentality thereof or from the State of Washington or any municipal
corporation or political subdivision thereof as compensation for, or to support, health or social
welfare services rendered by a health or social welfare organization (as defined in RCW
82.04.431) or by a municipal corporation or political subdivision, except deductions are not
allowed under this subsection for amounts that are received under an employee benefit plan. For
purposes of this subsection, "employee benefit plan" includes the military benefits program
authorized in 10 USC Sec. 1071 et seq., as amended, or amounts payable pursuant thereto.
(2) Interest on investments or loans secured by mortgages or deeds of trust. In computing tax,
there may be deducted from the measure of tax by those engaged in banking, loan, security or
other financial businesses, amounts derived from interest received on investments or loans
primarily secured by first mortgages or trust deeds on non-transient residential properties.
(3) Interest on obligations of the state, its political subdivisions, and municipal corporations. In
computing tax, there may be deducted from the measure of tax by those engaged in banking,
loan, security or other financial businesses, amounts derived from interest paid on all obligations
of the State of Washington, its political subdivisions, and municipal corporations organized
pursuant to the laws thereof.
(4) Interest on loans to farmers and ranchers, producers or harvesters of aquatic products, or their
cooperatives. In computing tax, there may be deducted from the measure of tax amounts derived
as interest on loans to bona fide farmers and ranchers, producers or harvesters of aquatic
products, or their cooperatives by a lending institution which is owned exclusively by its
borrowers or members and which is engaged solely in the business of making loans and
providing finance-related services to bona fide farmers and ranchers, producers or harvesters of
aquatic products, their cooperatives, rural residents for housing, or persons engaged in furnishing
farm-related or aquatic-related services to these individuals or entities.
(5) Receipts from tangible personal property delivered outside the State. In computing tax, there
may be deducted from the measure of tax under retailing or wholesaling amounts derived from
the sale of tangible personal property that is received by the purchaser or its agent outside the
State of Washington.
(6) Cash discount taken by purchaser. In computing tax, there may be deducted from the measure
of tax the cash discount amounts actually taken by the purchaser. This deduction is not allowed
in arriving at the taxable amount under the extracting or manufacturing classifications with
respect to articles produced or manufactured, the reported values of which, for the pUrposes of
this tax, have been computed according to the "value of product" provisions.
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(7) Credit losses of accrual basis taxpayers. In computing tax, there may be deducted from the
measure of tax the amount of credit losses actually sustained by taxpayers whose regular books
of account are kept upon an accrual basis.
(8) Repair, maintenance, replacement, etc., of residential structures and commonly held property
- eligible organizations.
(a) In computing tax, there may be deducted from the measure of tax amounts used solely
for repair, maintenance, replacement, management, or improvement of the residential structures
and commonly held property, but excluding property where fees or charges are made for use by
the public who are not guests accompanied by a member, which are derived by:
(i) A cooperative housing association, corporation, or partnership from a person
who resides in a structure owned by the cooperative housing association, corporation, or
partnership;
(ii) An association of owners of property as defined in RCW 64.32.010, as now or
hereafter amended, from a person who is an apartment owner as defined in RCW 64.32.010; or
(iii) An association of owners of residential property from a person who is a
member of the association. "Association of owners of residential property" means any
organization of all the owners of residential property in a defined area who all hold the same
property in common within the area.
(b) For the purposes of this subsection "commonly held property" includes areas required
for common access such as reception areas, halls, stairways, parking, etc., and may include
recreation rooms, swimming pools and small parks or recreation areas; but is not intended to
include more grounds than are normally required in a residential area, or to include such
extensive areas as required for golf courses, campgrounds, hiking and tiding areas, boating areas,
etc.
(c) To qualify for the deductions under this subsection:
(i) The salary or compensation paid to officers, managers, or employees must be
only for actual services rendered and at levels comparable to the salary or compensation of like
positions within the county wherein the property is located;
(ii) Dues, fees, or assessments in excess of amounts needed for the purposes for
which the deduction is allowed must be rebated to the members of the association;
(iii) Assets of the association or organization must be distributable to all members
and must not inure to the benefit of any single member or group of members.
(9) Sales at wholesale or retail of precious metal bullion and monetized bullion. In computing
tax, there may be deducted from the measure of the tax amounts derived from the sale at
wholesale or retail of precious metal bullion and monetized bullion. However, no deduction is
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B&O Taxes
allowed on amounts received as commissions upon transactions for the accounts of customers
over and above the amount paid to other dealers associated in such transactions, and no
deduction or offset is allowed against such commissions on account of salaries or commissions
paid to salesmen or other employees.
(10) Amounts representing rental of real estate for boarding homes. In computing tax, there may
be deducted from the measure of tax amounts representing the value of the rental of real estate
for "boarding homes." To qualify for the deduction, the boarding home must meet the definition
of "boarding home, and licensed by the State of Washington under RCW 18.20. The deduction
shall be in the amount of twenty-five percent (25%) of the gross monthly billing when the
boarder has resided within the boarding home for longer than thirty (30) days.
(11) Radio and television broadcasting - advertising agency fees - national, regional, and
network advertising - interstate allocations. In computing tax, there may be deducted from the
measure of tax by radio and television broadcasters amounts representing the following:
(a) advertising agencies' fees when such fees or allowances are shown as a discount or
price reduction in the billing or that the billing is on a net basis, i.e., less the discount;
(b) actual gross receipts from national network, and regional advertising or a "standard
deduction" as provided by RCW 82.04.280; and
(c) local advertising revenue that represent advertising which is intended to reach
potential customers of the advertiser who are located outside the State of Washington. The
Director may issue a rule that provides detailed guidance as to how these deductions are to be
calculated.
(12) Constitutional prohibitions. In computing tax, there may be deducted from the measure of
the tax amounts derived from business which the City is prohibited from taxing under the
Constitution of the State of Washington or the Constitution of the United States.
3.48.120 Tax Part Of OVerhead.
It is not the intention of this chapter that the taxes or fees herein levied upon persons
engaging in business be construed as taxes or fees upon the purchasers or customer, but that such
taxes or fees shall be levied upon, and collectible from, the person engaging in the business
activities herein designated and that such taxes or fees shall constitute a part of the cost of doing
business of such persons.
3.48.125 Rules and Regulations. The Director may establish administrative rules and
regulations as deemed appropriate, consistent with this chapter for the purpose of enforcing and
carrying out its provisions.
3.48.130 Severability Clause.
If any provision of this chapter or its application to any person or cireumstance is held
invalid, the remainder of the chapter or the application of the provision to other persons or
circumstances shall not be affected.
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B&O Taxes
SECTION 2. Section 1 of this ordinance shall take effect and be in force on
January 1, 2003.
SECTION 3. Severability. If any one or more sections, subsections, or
sentences of this Ordinance are held to be unconstitutional or invalid, such decision shall not
affect the validity of the remaining portion of this Ordinance and the same shall remain in full
force and effect.
SECTION 4. Effective Date. This ordinance shall take effect and be in force ten
(10) days from and after its passage, approval and publication as provided by law.
APPROVED by the City Council the /,~:~ day of ~_.~,'s,~.,~_.,.~ ~ ,2002
PASSED by the City Council the ,/t~:~ day of ,f~t~..~.~.~ ,2002
CAROL ARENDS, Council President
Approved this ~ day of
2002
ATTEST:
KA~'H~,~J~ ~(~CL~IS ~Y, ay C~rk
APPROVED AS TO FORM:
'R"~GER A. LUt~OVICH, City Attorney
PUBLISHED the olt'~ day of J,~LeJ~ ,2002
EFFECTIVE the ,.~ day of ~.a~:~.o,.z,t~t.4.~_ ,20(~
ORDINANCE NO. .9t~5/,..~ v
RALEGAL\Ordinances\Administration~B&O and Utility TaxkBMC 3.48, B & O Tax .doc
25
B&O Taxes
AFFIDAVIT OF PUBLICATION
County of Kitsap, State of Washington
No. 100037925
I, Valerie Zoller, being first duly sworn on oath, deposes and says: That she is now, and at all times
embraced in the publication herein mentioned was the principal clerk of the printers and publishers of
THE SUN; that said newspaper has been approved as a legal newspaper by order ofthe Superior Court of
the County of Kitsap, in which County it is published and is now and has been for more than six months
prior to the date of the publication hereinafter referred to, published in the English language continually
as a daily newspaper in Bremerton, Kitsap County, Washington, and is now and during all of said time,
was printed in an office maintained in the aforesaid place of publication of said newspaper; that the
following is a true text of a legal advertisement as it was published in regular issues (and not in
supplement form) of said newspaper on the following dates, to wit: December 24 , 2002; and that such
newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the
fee charged for the foregoing publication is the sum qf $47.75 amount has not been paid in full.
!t ~ /J
, '. 1'-/,
(/. '{J i --'- :)..-C: ~~"-
/ /
(Signature of Principal Clerk)
Subscribed and sworn to before me this day of December 30, 2002
Notary Public in and for the State of Washington, Kitsap County.
SUMMARY OF ORDINANCE NO. 4843'
AN ORDINANCE of the City Council of the City of Bremerton, Washington, creating a new chapter of
the Bremerton Municipal Code, Chapter 3.48 entitled "Business Occupation Taxes" separating the
provisions related to the business and occupation taxes from those related to business licenses and utility
taxes and further updating the provisions relating to business and occupation taxes and providing for new
provisions relating to the administration ofthe same.-
APPROVED by the City Council the 11th day of December,200T
PASSED by the City Council the 18th day of December,200T
The full text of this ordinance is available from the City Clerk's Office, 239 Fourth Street, Bremerton,
WA 98337.-
December 24,2002- - #100037925