HomeMy WebLinkAbout5344ORDINANCE NO. 5344
AN ORDINANCE of the City Council of the City of
Bremerton, Washington, amending Section 3.48.030 of the
Bremerton Municipal Code entitled "Definitions" regarding
B & O Taxes.
WHEREAS, the City Council desires to amend Section 3.48.030 of the Bremerton
Municipal Code entitled "Definitions" regarding B & O Taxes in order to update provisions set
forth in the definitions section of the code relating to the transfer of the Tax and License Division
from the Department of Financial Services to the Department of Community Development, and
to make other related changes; NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON,
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION]. Section 3.48.030 of the Bremerton Municipal Code entitled
"Definitions" is hereby amended to read as follows:
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.
(a) Definitions "A":
"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" 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 15.85.020; 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 15.85.020, or a bird, or insect, or the substances obtained from such an animal.
"Agricultural product" does not include animals intended to be pets.
"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 definition, for viewing or attendance by the general public.
(2) The organization must be a not-for-profit corporation under Chapter 24.03
RCW.
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Chapter 3.48 BMC — B & 0 Taxes
(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.
(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 nonprofit 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.
(b) Definitions `B":
"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.
"Business and occupation tax" or "gross receipts tax" means a tax imposed on or
measured by the value of products, the gross income of the business, or the gross proceeds of
sales, as the case may be, and that is the legal liability of the business.
(c) Definitions "C":
"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" means City of Bremerton, Washington.
"Commercial or industrial use" means the following uses of products, including by-
products, by the extractor or manufacturer thereof.
(1) Any use as a consumer;
(2) Any use in the manufacturing of products including articles, substances or
commodities.
"Competitive telephone service" means the providing by any person of
communications 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
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Chapter 3.48 BMC — B & 0 Taxes
provided by persons that are not subject to regulation as telephone companies under RCW Title
80 and for which a separate charge is made.
"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;
(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 this section 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 definition 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 definition shall be construed to modify
any other definition of "consumer."
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(d) Definitions "D":
"Deficiency" means the amount of tax imposed by law less any tax reported by the
taxpayer on a tax return.
"Delivery" means the transfer of possession of tangible personal property between the
seller and the buyer or the buyer's representative. Delivery to an employee of a buyer is
considered delivery to the buyer. Transfer of possession of tangible personal property occurs
when the buyer or the buyer's representative first takes physical control of the property or
exercises dominion and control over the property. "Dominion and control" means the buyer has
the ability to put the property to the buyer's own purposes. It means the buyer or the buyer's
representative has made the final decision to accept or reject the property, and the seller has no
further right to possession of the property and the buyer has no right to return the property to the
seller, other than under a warranty contract. A buyer does not exercise dominion and control over
tangible personal property merely by arranging for shipment of the property from the seller to
itself. A buyer's representative is a person, other than an employee of the buyer, who is
authorized in writing by the buyer to receive tangible personal property and take dominion and
control by making the final decision to accept or reject the property. Neither a shipping company
nor a seller can serve as a buyer's representative. It is immaterial where the contract of sale is
negotiated or where the buyer obtains title to the property. Delivery terms and other provisions of
the Uniform Commercial Code (RCW Title 62A) do not determine when or where delivery of
tangible personal property occurs for purposes of taxation.
"Department" means the Department of Community Development unless otherwise
noted.
"Digital automated service;" "digital code," and "digital goods" have the same
meaning as in RCW 82.04.192.
"Digital products" means digital goods, digital codes, digital automated services, and
the services described in RCW 82.04.050(2)(g) and (6)(b).
"Director" means the Director of F;,,.,..eial SeEvieesCommunity Develolment of the
City or any officer, agent or employee of the City designated to act on the Director's behalf.
(e) Definitions "E":
"Eligible gross receipts tax" means a tax which:
(1) Is imposed on the act or privilege of engaging in business activities within
BMC 3.48.050; 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.
"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
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Chapter 3.48 BMC — B & 0 Taxes
liquidating a business when the liquidators thereof hold themselves out to the public as
conducting such business.
(2) This section sets forth examples of activities that constitute engaging in
business in the City, and establishes safe harbors for certain of those activities so that a person
who meets the criteria may engage in de minimis business activities in the City without having to
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) of this definition. 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 (1) 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 pursuant to Chapter 5.02 BMC.
(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.
0) Providing disinfecting and pest control services, employment and
labor pool services, home nursing care, janitorial services, appraising, landscape architectural
services, security system services, surveying, and real estate services including the listing of
homes and managing real property.
(k) Rendering professional services such as those provided by
accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes,
barbers, baseball clubs and other sports organizations, chemists, psychologists, court reporters,
dentists, doctors, detectives, laboratory operators, teachers, and 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.
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(n) Investigating, resolving, or otherwise assisting in resolving
customer complaints.
(o) In-store stocking or manipulating products or goods, sold to and
owned by a customer, regardless of where sale and delivery of the goods took place.
(p) Except as provided in subsection (5) of this definition, delivering
goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on
its behalf.
(4) Not Engaging in Business. 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, that person is not engaging in business
and therefore is not required to register and obtain a City business license pursuant to Chapter
5.02 BMC or pay City business and occupation taxes pursuant to this chapter:
(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) Conducting advertising through the mail.
(g) Soliciting sales by phone from a location outside the City.
(h) Providing language interpretive i services to the Bremerton
Municipal Court.
(5) A business located outside the City merely delivering goods into the City
by common carrier or other means, including use of its own vehicles, is not required to register
and obtain a business license; provided, that it engages in no other business activities in the City.
Such business activities do not include those in subsection (4) of this definition.
(6) "Nexus." A person has created nexus with the City if, whether itself or by
its employees, agents, representatives, 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 includes 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.
"Extracting" is the activity engaged in by an extractor and is reportable under the
extracting classification.
"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
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Chapter 3.48 BMC — B & 0 Taxes
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
plantation Christmas trees from the person's own land or from land in which the person has a
present right of possession; or persons meeting the definition of "farmer."
"Extractor for hire" means a person who performs under contract necessary labor or
mechanical services for an extractor.
(f) Definitions "F":
"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 slaughter or packing house. "Farmer" does not include any person in respect to the business
of taking, cultivating, or raising timber.
(g) Definitions "G":
"Gross income of the business" means the value proceeding or accruing by reason 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, discounts, 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, discounts, delivery costs, taxes, or
any other expense whatsoever paid or accrued and without any deduction on account of losses.
"Gross proceeds of sales" means the value proceeding or accruing from the sale of
tangible personal property, digital goods, digital codes, digital automated services or for other
services rendered, without any deduction on account of the cost of property sold, the cost of
materials used, labor costs, interest, discounts paid, delivery costs, taxes, or any other expense
whatsoever paid or accrued and without any deduction on account of losses.
(h) Definitions "H": Reserved.
(i) Definitions "I":
"In this City" or "within this City" includes all federal areas lying within the corporate
City limits of the City.
(j) Definitions "J":
"Janitorial services" shall mean those cleaning and caretaking 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.
(k) Definitions "K": Reserved.
(1) Definition "L": Reserved.
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(m) Definitions "M":
"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 (20) percent 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:
(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) Crushing 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.
"To manufacture" shall not include the production of digital goods or the production of
computer software if the computer software is delivered from'the seller to the purchaser by
means other than tangible storage media, including the delivery by use of a tangible storage
media where the tangible storage media is not physically transferred to the purchaser.
"Manufacturing" means the activity conducted by a manufacturer and is reported under
the manufacturing classification.
(n) Definitions "N":
"Newspaper," "magazine," "periodical."
(1) "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.
(2) "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.
"Nonprofit corporation or nonprofit 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 Section 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 Section 501(c)(3) of the Internal Revenue Code, as
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Chapter 3.48 BMC — B & 0 Taxes
hereafter amended. Where the term "nonprofit organization" is used, it is meant to include a
nonprofit corporation.
(o) Definitions "O":
"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;
(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.
(p) Definitions "P":
"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
a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise and the United States or
any instrumentality thereof.
"Port District" means a port district as defined in Chapter 53.04 RCW.
"Precious metal bullion," "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" 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 (20) percent 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.
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"Product," "by-product."
(1) 'Product" means tangible personal property, including articles, substances,
or commodities created, brought forth, extracted, or manufactured by human or mechanical
effort.
(2) "By-product" 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.
(q) Definitions "O": Reserved.
(r) Definitions "R":
"Reporting period" means:
(1) A one (1) month period beginning the first day of each calendar month
(monthly); or
(2) A three (3) month period beginning the first day of January, April, July or
October of each year (quarterly); or
(3) A twelve (12) month period beginning the first day of January of each
year (annual).
"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) Amusement and recreation services including but not limited to golf, pool,
billiards, skating, bowling, swimming, bungee jumping, ski lifts and tows, basketball,
racquetball, 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 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) Automobile parking and storage garage services;
(5) Landscape maintenance and horticultural services but excluding (a)
horticultural services provided to farmers and (b) 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;
(6) Service charges associated with tickets to professional sporting events;
(7) The following personal services: physical fitness services, tanning salon
services, tattoo parlor services, steam bath services, Turkish bath services, escort services, and
dating services; and
(8) The term shall also include the renting or leasing of tangible personal
property to consumers and the rental of equipment with an operator.
"Retailing" means the activity of engaging in making sales at retail and is reported under
the retailing classification.
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Chapter 3.48 BMC — B & 0 Taxes
"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" means compensation for the use of intangible property, such as copyrights,
patents, licenses, franchises, trademarks, tradenames, and similar items.
(s) Definitions "S":
"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 all 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 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 subsection (1)(a), (b), (c), (d), or (e) of this definition
following such use; or
(f) Purchases for the purpose of satisfying the person's obligations
under an extended warranty as defined in subsection (8) of this definition, if such tangible
Page 11 of 17
Chapter 3.48 BMC — B & 0 Taxes
personal property replaces or becomes an ingredient or component of property covered by the
extended warranty without intervening use by such person.
(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 fanning 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 telephone business 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 (1) month or more constitutes a rental
or lease of real property and not a mere license to use or enjoy the same. For the purposes of this
.subsection, it shall be presumed that the sale of and charge made for the furnishing of lodging for
a continuous period of one (1) month or more to a person is a rental or lease of real property and
not a mere license to enjoy the same;
(g) The installing, repairing, altering, or improving of digital goods for
consumers;
(h) The sale of or charge made for tangible personal property, labor
and services to persons taxable under subsections (3)(a), (b), (c), (d), (e), (t) and (g) of this
definition when such sales or charges are for property, labor and services which are used or
Page 12 of 17
Chapter 3.48 BMC — B & 0 Taxes
labor, or both, or to provide indemnification for the replacement or repair of tangible personal
property, based on the occurrence of specified events. The term "extended warranty" does not
include an agreement, otherwise meeting the definition of extended warranty in this subsection,
if no separate charge is made for the agreement and the value of the agreement is included in the
sales price of the tangible personal property covered by the agreement.
(9) "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 by-products of weapons production and nuclear research and
development. (This is reported under the service or other classification.)
(10) "Sale at retail" or "retail sale" shall not include the sale of or charge made
for labor and services rendered for environmental remedial action. (This is reported under the
service and other classification.)
(11) "Sale at retail" or "retail .sale" .shall also include the following sales to
consumers of digital goods, digital codes, and digital automated services:
(a) Sales in which the seller has granted the purchaser the right of
permanent use;
(b) Sales in which the seller has granted the purchaser a right of use
that is less than permanent;
(c) Sales in which the purchaser is not obligated to make continued
payment as a condition of the sale; and
(d) Sales in which the purchaser is obligated to make continued
payment as a condition of the sale.
A retail sale of digital goods, digital codes, or digital automated services under this
subsection, subsection (11), includes any services provided by the seller exclusively in
connection with the digital goods, digital codes, or digital automated services, whether or not a
separate charge is made for such services.
For purposes of this subsection (11), "permanent" means perpetual or for an indefinite or
unspecified length of time. A right of permanent use is presumed to have been granted unless the
agreement between the seller and the purchaser specifies or the circumstances surrounding the
transaction suggest or indicate that the right to use terminates on the occurrence of a condition
subsequent.
(12) "Sale at retail" or "retail sale" shall also include the installing, repairing,
altering, or improving of digital goods for consumers.
"Sale at wholesale" or "wholesale sale" means any sale of tangible personal property,
digital goods, digital codes, digital automated services, prewritten computer software, or the
services described in subsection (5)(b) of this definition 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 telephone business to another
communications company as defined in RCW 80.04.0 10 for the purpose of resale, as
contemplated by RCW 35.21.715.
"Services" means any business activity other than or in addition to those defined in this
section.
Page 14 of 17
Chapter 3.48 BMC — B & .O Taxes
"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 communications 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. 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 (1) 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" 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, merchandise,
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.
(t) Definitions "T":
"Tax and Licensing Division" means the Tax and Licensing Division of the Department
of Community Development.
"Tax year" or "taxable year" means the calendar year.
"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.
"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
Page 15 of 17
Chapter 3.48 BMC — B & 0 Taxes
or generally accredited as such by the State and includes educational programs that such
educational institution cosponsors with a nonprofit organization, as defined by the Internal
Revenue Code Section.501(c)(3), as hereafter amended, if such educational institution grants
college credit for course work 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.
(u) Definition "U": Reserved.
(v) Definitions "V":
"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 articles extracted or manufactured, including direct and
indirect overhead costs. The Director may prescribe rules for the purpose of ascertaining such
values.
(3) Notwithstanding subsection (2) of this definition, the value of a product
manufactured or produced for purposes of serving as a prototype for the development of a new or
improved product shall correspond to (a) the retail selling price of such new or improved product
when first offered for sale; or (b) the value of materials incorporated into the prototype in cases
in which the new or improved product is not offered for sale.
"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.
(w) Definitions "W":
"Wholesaling" means engaging in the activity of making sales at wholesale, and is
reported under the wholesaling classification.
(x) Definitions "X": Reserved.
Page 16 of 17
Chapter 3.48 BMC — B & 0 Taxes
(y) Definitions "Y": Reserved.
W - Definitions "Z": Reserved.
SECTION2. 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.
SECTION3. 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 DY -4
Approved this ?Ah --day of fi�����'" , 2017.
PATTY LEN , yor
ATTEST: APPROVED AS TO FORM:
SHANNON CORIN, City Clerk R GER A. LUBOVICH, City Attorney
PUBLISHED the day of ,(�em
�i'hc�'G� , 2017.
EFFECTIVE the y of LQQ/1+�-1 -20+-7. SDI
ORDINANCE NO. 5.�
R:U.egal\L.egal\Ordinances\Community Development\BMC 3.48.030 Definitions (B & O Taxes).docx
Page 17 of 17
Chapter 3.48 BMC — B & 0 Taxes
AFFIDAVIT OF PUBLICATION
Account #342133 AD#1869310
STATE OF WASHINGTON
COUNTY OF KITSAP
I, Teresa Hull, 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 publi-
cation 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
December 27, 2017
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 $53.28. This amount has not been paid in full.
4 -11 ---
(Signature
(Signature of Principal Clerk)
Subscribed,and sworn to. before me this day of December 27, 2017.
M O��i�i
1SSIOble 4%
v� apTArgy
-*®em. •7Q
N : 100801r, :2k.
WASN`�G`.
nnn
ORDINANCE NO. 5344
AN ORDINANCE of the City
Council of the City of
Bremerton, Washington,
amending Section 3.48.030
of the Bremerton Municipal
Code entitled "Definitions"
regarding B & 0 Taxes
PASSED by the City Council on
the 20th day of December, 2017.
The full text of this ordinance
is available from the City
Clerk's Office, 345 Sixth Street,
Suite 100, Bremerton, WA 98337.
DEC. 279 2017 AD#1869310