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HomeMy WebLinkAbout5195 ORDINANCE NO. S AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending Section 3 48 050 entitled Imposition of the Tax — Tax or Fee Levied" to raise the exemption of revenues from business and occupation taxes 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, the City Council desires to amend Section 3 48 050 of the Bremerton Municipal Code to raise the exemption of revenues from business and occupation taxes, NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS SECTION 1. Section 3 48 050 of the Bremerton Municipal Code entitled "Imposition of the Tax — Tax or Fee Levied" is hereby amended to read as follows 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 (0 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 (0 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 1 B & 0 Tax - Exemption delivery of articles, commodities or merchandise sold, multiplied by the rate of one and six - tenths of one percent (0 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 (0 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 (0 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 (0 002) (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 (0 002) 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 or a retail service (2) Tax Exemption (a) whose gr-ess pr-eeeeds of sales, gross ineeme of the business, and value ef pr-eduets, ineluding by year- is equal to or less than twenty thousand dollars ($20,000) Begtming on januar-y 1, 2007, the gross r-eeetpts tax impesed in this seetten shall. net apply to any per-son whose gross pr-eeeeds ef sales, gross meeme of the bustness, and value of pFedttets, ineluding by pr-eduets, as the ease may be, &em all aetivittes eendeeted within the City dur-ing any ealendai-7 yeaf is equal te er- less than feAy thetisand dellafs ($40,000) Per-sens with gross ineeme e*eeeding fet4y theusand dollars ($40,000) per- yeaf shall be ta*ed Only on the afneunt of gr-ess ineeme exeeeding fefty theasand dollars ($40,000) per- year- The g ross receipts tax imposed in this section shall not apply to any person whose gross proceeds of sales, gross income of the business, and value of products, including by- products, as the case may be, from all activities conducted within the City during any calendar year is equal to or less than sixty thousand dollars ($60,000) "Tax Exemption ") Persons with gross income exceeding sixty thousand dollars ($60,000) per year shall be taxed only on the amount of gross income exceeding sixty thousand dollars ($60,000) per year 2 B & 0 Tax - Exemption (b) Beginning on January 1, 2013 and each year thereafter, the Tax Exemption set forth in subsection shall be increased by an additional twenty thousand dollars ($20,000 ") for each year as follows Year 2013 - the Tax Exemption shall be $80,000 Year 2014 - the Tax Exemption shall be $100,000 Year 2015 - the Tax Exemption shall be $120,000 Year 2016 - the Tax Exemption shall be $140,000 This formula for the Tax Exemption shall continue until no taxes are due to be received by the City in any tax year at which time the business and occupation tax shall terminate, unless the formula is modified as set forth in subsection (2)(c) below (c) The tax reduction formula in subsection (2)(b) above may be (1) Accelerated at any time, 60 Staved for a period of time as determined by the City Council upon findings by the City Council that fiscal and budget conditions of the City necessitate a stay of the tax reduction, or (iii) The business and occupation tax is terminated by ordinance adopted by the City Council The actions by City Council to accelerate or stay implementation of the tax reduction is subsections 2(b)(1) and 2(b)(11) above may be made by motion or other action of the City Council (3) Job Credits It is the intent of the City Council to encourage growth and attract new business to the City To that end, the City Council finds that an incentive measured by a business's growth in fobs is a meaningful method of attracting and retaining such businesses Therefore, the incentive in this section is specifically targeted at new full -time positions A basic credit is made available to all businesses located in the City (a) Subject to the limits in this section, an eligible person is allowed a credit against the tax due under this chapter The credit is based on a qualified employment position located within the City (1) The credit shall be five hundred dollars ($500 00) for each qualified employment position within the City, which positions were created on or after January 1, 2007, the "effective date " A credit is earned for the calendar year in which the employee is hired to fill the position, plus the four (4) subsequent consecutive years, if the position, along with the company's increased workforce of eligible persons, is maintained during the entire period a Credit may not be taken for hiring persons into positions existing on the effective date Credit is authorized for new employees hired for new positions created on or after the effective date, which result in an increase in the total workforce of the business located in the City New positions filled by existing employees are eligible for the credit under this section only if the position vacated by the existing employee is filled by a new hire b If filled before July 1 st of any given year, a newly created position is eligible for a full yearly credit If filled after June 30th, the position is eligible for only a half credit for the first calendar year c Credit may not be accrued and carried forward or back No refunds may be granted for unused portion of credits under this section If the position is filled during the calendar year, after the filing of a quarterly tax period, an amended first or third quarter tax return will be allowed, if appropriate, to qualify all the credit to which the employer is entitled for that year 3 B & 0 Tax - Exemption (it) For the purposes of this section a "Eligible person" means a person or company who resides in the City and is engaging in a business activity within the City b "Qualified employment position" means a permanent, full - time position with compensation of at least a "family wage" within twelve (12) months after the date of hire (allowing for training time and a probation period) If an employee is either voluntarily or involuntarily separated from employment, the employment position is considered filled on a full -time basis during a period not to exceed three (3) months if the employer is actively recruiting a replacement employee c "Family wage," beginning January 1, 2007, is seventeen dollars and eleven cents ($17 11) an hour This is the annual average wage in Kitsap County for 2004, developed by the Washington State Employment Security Department, Labor Market and Economic Development Division ( "ES202 ") This amount will be adjusted annually beginning on January 1, 2008, by an amount equal to the increase in the Consumer Price Index ( "CPI ") for Urban Wage Earners, Tacoma - Seattle - Bremerton area, of the prior year If the CPI increase is more than five (5) percent, a five (5) percent increase will be used in computing the basis d The purchase of an existing business does not create an allowance of the credit for existing positions (iii) No application is necessary for the tax credit, however, information must be submitted for each new employee position for which credit is requested, and included with the first tax return in which the credit is claimed The person must keep records necessary for the City to verify eligibility under this section This information includes a Employment records, including Washington State and federal tax returns, for the current year and previous five (5) years, and b Information relating to description of business activity engaged in at the eligible location by the employee (b) If at any time the Director finds that an employer is not eligible or has lost eligibility for a tax credit under this section, the total amount of taxes for which a credit has been claimed for current and prior periods shall be immediately due (4) 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 SECTION2. Severabdity 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 3. 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 �� day of U-I' , 2012 O� JIM M JALD, Council President 4 B & 0 Tax - Exemption Approved this I� day of 0� JW , 2012 PATTY L ",ayor T T APPROVED AS TO FORM SHANNON CORIN, City Clerk I ROWSER A LUBOVICH, City Attome PUBLISHED the �;! of 0 6 , 2012 EFFECTIVE the day of , 2012 ORDINANCE NO t J 1 - 9,9 R \Legal\Legal \Ordmances\Fmance \B & O Tax Exemption 2012- Exemption doc ,r 5 B & 0 Tax - Exemption AFFIDAVIT OF PUBLICATION Account #42742 AD#287007 STATE OF WASHINGTON COUNTY OF KITSAP I, Stacey J C Hovland, 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 an advertisement as it was published in regular issues (and not in supplement form) of said newspaper on the following date, to wit And on October 22 2012 such newspaper was regularly distributed to its subscribers during all of said period The full amount of the fee charged for the foregoing publication is the sum of $33 89 This amount has not been paid in full (Signature Principal Clerk) Subscribed and sworn to before me this day of October 29 2012 A. P/\n Notary Public in and for the State of Washington, Kitsap County CASSANDRA A CAPAS Notary Public State of Washington My Commission Expires February 04, 2014 ORDINANCE NO 5195 AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending Section 3 48 050 entitled "Imposition of the Tax -- Tax or Fee Levied" to raise the exemption of revenues from business and occupation taxes PASSED by the City Council on the 17th day of October, 2012 The full text of this ordinance is available from the City Clerk's Office, 345 Sixth Street, Suite 600, Bremerton, WA 98337 AD#20129322