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ORDINANCE NO. 4'{ 8 e
AN ORDINANCE of the City Council of the City of
Bremerton, Washington, amending Chapter 3.48 of the Bremerton
Municipal Code entitled "Business and Occupation Tax" to
increase the exemption of revenue subject to taxation, provide a
three (3) year exemption from taxes for businesses located in an
area annexed by the City of Bremerton as of the date of
annexation, and provide a tax credit related to qualified jobs
creation by businesses located within the City of Bremerton; and
further amending Chapter 3.50 of the Bremerton Municipal Code
to reduce the utility tax rate for solid waste.
WHEREAS, it is the intent of the City Council to encourage growth and attract
new businesses to the City of Bremerton; and
WHEREAS, the City Council believes that providing a greater exemption of
revenues from business and occupation taxes will serve to encourage desired expansion of
existing businesses and attract new businesses to the City of Bremerton; and
WHEREAS, a three (3) year exemption from local business and occupation taxes
for businesses located in an area that has become part of the City by annexation would encourage
and accommodate the successful completion of City annexation efforts; and
WHEREAS, the creation of family wage jobs is a meaningful measurement of
business expansion and new business development in the City of Bremerton and the creation of
new full-time positions within the City may be encouraged through the incentive of a business
and occupation tax credit; and
WHEREAS, the City desires to reduce the utility tax rate for persons engaging in
the business of providing solid waste collection service from 10% to 9.5%; NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON,
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 3.48.030 of the Bremerton Municipal Code entitled
"Definitions" relating to Business and Occupation Taxes is hereby amended to change the
definition of "Director" to read as follows:
"Director." "Director" means the Director of Finaneecial Services ofthe City or any officer, agent or
employee ofthe City designated to act on the Director's behalf.
SECTION 2. Section 3.48.050 of the Bremerton Municipal Code entitled
"Imposition of the Tax - Tax or Fee Levied" relating to Business and Occupation Taxes is
hereby amended to read as follows:
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3.48.050 IMPOSITION OF THE TAX - TAX OR FEE LEVIED.
(1) Imposition of the Tax - Tax or Fee Levied. Except as provided in subsection (2)
of this section, 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 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).
(t) 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 oftax 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
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SECTION 3. Section 3.48.090 of the Bremerton Municipal Code entitled
"Exemptions" relating to Business and Occupation Taxes is hereby amended to read as follows:
3.48.090 EXEMPTIONS.
(l) 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 48.14.020l.
(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.
(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
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2006 Amendment - B&O and Utility Tax
commercial bank, the principal office of which is located in this state, and which is incorporated and
doing business under the laws ofthe United States or ofthis 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 ofthe 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 ofthe 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 exhibitions. 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) Emplovees. This chapter shall not apply to:
(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. This chapter shall also not apply to amounts received for the rental of real estate if the
rental income is derived from a contract to rent for a continuous period of thirty (30) days or longer.
(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.
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(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 defmed 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 ofliquor. 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 ofthe 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) Three (3) year exemption for annexed businesses. This chapter shall not applvto any
person with respect to a business activity conducted in an area that has become part of the City bv
annexation: provided, however, that the business premises of such person be located in the said area
on the date of annexation: and provided, further, that the exemption provided herein shall cease at the
expiration of twelve (12) full calendar quarters following the date of such annexation.
SECTION 4. Subsection 3.50.050(f) of the Bremerton Municipal Code entitled
"Solid Waste" relating to persons subject to the Utility Tax is hereby amended to read as follows:
(f) Solid waste. Upon every person engaging in the business of providing solid waste
collection service, a fee or tax equal to ten (10)nine and one-half percent (9.5%) of the total gross
income from such business conducted within the City.
SECTION 5. Severability. If anyone 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 6. 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.
PASSED by the City Council the /5""L day of ~ ~./ , 2006
alll,~
CECIL McC NNELL, Coune I President
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2006 Amendment - B&O and Utility Tax
k
Approved this I ~ day of
1fcn~ ,2006 (jt~
~ ~
~
CARY BOZE AN, Mayor
APPROVED AS TO FORM:
PUBLISHEDthe ,?lIST dayof ~
EFFECTIVE the j ST day of _ _ _
ORDINANCE NO. 1f9'81?'
R:\Legal\Legal\Ordinances\Finance\2006 8&0 Tax Amendment.doc
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GEll LUBO ICH, C~
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,2006
,2006
2006 Amendment - B&O and Utility Tax
AFFIDAVIT OF PUBLICATION
Account # 42742 / Ad # 175685
ST ATE OF WASHINGTON
COUNTY OF KITSAP
I, Sarah Weller, 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
KITSAP SUN; that said newspaper has been approved as a legal newspaper by order of the 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, a weekly newspaper in 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: ,
November 21, 2006 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 of $41.78 which
amount has not been paid in full.
~Jf1ff~J~
(Signature of Principal Clerk)
Subscribed and sworn to before me this day of November 30, 2006
ORDINANCE NO. 4988
Notary Public in and for the State of Washington, Kitsap County.
AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending Chapter 3.48 of
the Bremerton Municipal Code entitled "Business and Occupation Tax" to increase the exemption of
revenue subject to taxation, provide a three (3) year exemption from taxes for businesses located in an area
annexed by the City of Bremerton as of the date of annexation, and provide a tax credit related to qualified
jobs creation by businesses located within the City of Bremerton; and further amending Chapter 3.50 of the
Bremerton Municipal Code to reduce the utility tax rate for solid waste.
PASSED by the City Council on the 15th Day of November, 2006.
The full text of this ordinance is available from the City Clerk's Office, 345 6th Street, Suite 600,
Bremerton, W A 98337.
November 21, 2006.....AD #20023971