HomeMy WebLinkAbout5355ORDINANCE NO. 5355
AN ORDINANCE of the City Council of the City of
Bremerton, Washington, amending Chapters 3.48 of the Bremerton
Municipal Code entitled "Business and Occupation Taxes",
Chapter 3.50 entitled "Utility Taxes", and Chapter 3.86 entitled
"Administrative Provisions for Taxes".
WHEREAS, the City Council desires to amend Chapters 3.48, 3.50 and 3.86 of
the Bremerton Municipal Code regarding business licensing and taxes by amending the
provisions relating to the definitions of "engaging in business" and to make other related
changes; 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 by amending
subsection (e) as follows:
(e) Definitions "E": "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 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 one (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 on service to real or
tangible personal property, including warranty work and property maintenance.
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Business Licensing & Taxes
(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.
(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.
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Business Licensing & Taxes
(f) Conducting advertising through the mail.
(g) Soliciting sales by phone from a location outside the City.
(h) Providing language interpretive 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) Threshold Exemption - Fee -free License/Registration. To the extent set
forth in this section, the following persons and businesses shall be exempt from the registration,
license and and/or license fee requirements as follows:
(a) Except as set forth in subsection (b) below, any person or business
whose annual value of products,rg oss proceeds of sales, or gross income of the business in the
City is equal to or less than $2,000.00 and who does not maintain a place of business within the
City shall be exempt from the general business license requirements of Chapter 5.02 BMC and
this chapter.
(b) Any person or business operating as a utility provider subject to
utility taxes pursuant to Chapter 3.50 BMC whose annual value of products,rgross proceeds of
sales, or gross income of the business in the City is equal to or less than $2,000.00 and who does
not maintain a place of business within the City, shall submit a business license registration to
the Tax and Licensing Division. No license fee shall be assessed for the business license
registration.
(6)(7) "Nexus." A person has created nexus with the City if, whether by 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.
SECTION2. Section 3.48.077 of the Bremerton Municipal Code entitled
"Allocation and Apportionment of Income When Activities Take Place in More Than One (1)
Jurisdiction" is hereby amended to read as follows:
3.48.077 ALLOCATION AND APPORTIONMENT OF INCOME WHEN
ACTIVITIES TAKE PLACE IN MORE THAN ONE (1) JURISDICTION.
RCW 35.102.130 entitled "Allocation and apportionment of income" is hereby_
adopted and incorporated by this reference as currently enacted and as hereinafter amended.
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SECTION3. Section 3.86.040 of the Bremerton Municipal Code entitled "When
Due and Payable — Reporting Periods — Monthly, Quarterly, and Annual Returns — Threshold
Provisions or Relief From Filing Requirements — Computing Time Periods — Failure to File
Returns" is hereby amended to read as follows:
FAILURE TO FILE . PAYMENT AND REPORTING PERIODS.
(1) Other than any annual license fee or registration fee assessed under
Chapter 5.02 BMC, the tax imposed by those chapters set forth in BMC 3.86.015 shall be due
and payable in quarterly installments unless otherwise specifically provided for therein. At the
Director's discretion, businesses may be assigned to a monthly or annual reporting period
depending on the tax amount owing or type of tax. Tax payments are due on or before the last
day of the next month following the end of the assigned reporting period covered by the return.
(2) Taxes shall be paid as provided in this chapter and accompanied by a
return on forms as prescribed by the Director. The return shall be signed by the taxpayer
personally or by a responsible officer or agent of the taxpayer. The individual signing the return
shall swear or affirm that the information in the return is complete and true.
(3) Tax returns must be filed and returned by the due date whether or not any
tax is owed.
(4) For purposes of the tax imposed by Chapter 3.48 BMC, any person whose
value of products, gross proceeds of sales, or gross income of the business, subject to business
and occupation tax after all allowable deductions, is equal to or less than the tax exemption
amount set forth in BMC 3.48.050(2) in the current calendar year shall file a return, declare no
tax due on their return, and submit the return to the Director. The gross receipts, deduction
amounts and exemptions shall be entered on the tax return even though no tax may be due.
(5) A taxpayer that commences to engage in business activity shall file a
return and pay the tax or fee for the portion of the reporting period during which the taxpayer is
engaged in business activity.
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SECTION3. Section 3.86.040 of the Bremerton Municipal Code entitled "When
Due and Payable — Reporting Periods — Monthly, Quarterly, and Annual Returns — Threshold
Provisions or Relief From Filing Requirements — Computing Time Periods — Failure to File
Returns" is hereby amended to read as follows:
FAILURE TO FILE . PAYMENT AND REPORTING PERIODS.
(1) Other than any annual license fee or registration fee assessed under
Chapter 5.02 BMC, the tax imposed by those chapters set forth in BMC 3.86.015 shall be due
and payable in quarterly installments unless otherwise specifically provided for therein. At the
Director's discretion, businesses may be assigned to a monthly or annual reporting period
depending on the tax amount owing or type of tax. Tax payments are due on or before the last
day of the next month following the end of the assigned reporting period covered by the return.
(2) Taxes shall be paid as provided in this chapter and accompanied by a
return on forms as prescribed by the Director. The return shall be signed by the taxpayer
personally or by a responsible officer or agent of the taxpayer. The individual signing the return
shall swear or affirm that the information in the return is complete and true.
(3) Tax returns must be filed and returned by the due date whether or not any
tax is owed.
(4) For purposes of the tax imposed by Chapter 3.48 BMC, any person whose
value of products, gross proceeds of sales, or gross income of the business, subject to business
and occupation tax after all allowable deductions, is equal to or less than the tax exemption
amount set forth in BMC 3.48.050(2) in the current calendar year shall file a return, declare no
tax due on their return, and submit the return to the Director. The gross receipts, deduction
amounts and exemptions shall be entered on the tax return even though no tax may be due.
(5) A taxpayer that commences to engage in business activity shall file a
return and pay the tax or fee for the portion of the reporting period during which the taxpayer is
engaged in business activity.
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(6) Except as otherwise specifically provided by any other provision of this
chapter, in computing any period of days prescribed by this chapter, the day of the act or event
from which the designated period of time runs shall not be included. The last day of the period
shall be included unless it is a Saturday, Sunday, or City or federal legal holiday, in which case
the last day of such period shall be the next succeeding day which is neither a Saturday, Sunday,
or City or federal legal holiday.
(7) If any taxpayer fails, neglects or refuses to make a return as and when
required in this chapter, the Director is authorized to determine the amount of the tax or fees
payable by obtaining facts and information upon which to base the Director's estimate of the tax
or fees due. Such assessment shall be deemed prima facie correct and shall be the amount of tax
owed to the City by the taxpayer. The Director shall notify the taxpayer by mail of the amount
of tax so determined, together with any penalty, interest, and fees due; the total of such amounts
shall thereupon become immediately due and payable.
SECTION 4. Section 3.50.020 of the Bremerton Municipal Code entitled
"Business License — Required" is hereby amended to read as follows:
3.50.020 BUSINESS LICENSE — REQUIRED.
It is unlawful for any person to engage in business in the City, as defined in
section BMC 3.48.030(e), without having first obtained a business license pursuant to Chapter
5.02 BMC. Applications for business licenses shall be filed with the Tax and License Division.
SECTION 5. Section 3.50.050 of the Bremerton Municipal Code entitled
"Persons Subject to Tax — Amount" is hereby amended to read as follows:
3.50.050 PERSONS SUBJECT TO TAX — AMOUNT.
In addition to other taxes or fees that may be imposed or levied by the City, there
is hereby levied upon all persons (including the City) engaging in business within the City, as
defined in section BMC 3.48.030(e), and required to obtain a business license pursuant to BMC
5.02.060 a fee or tax to be collected as follows:
(a) Gas. Upon every person engaging in the business of transmitting, distributing or
the selling of manufactured or natural gas, a fee or tax equal to six (6) percent of the total gross
income from such business conducted within the City.
(b) Water. Upon every person engaging in the business of providing water utility
service, a fee or tax equal to fifteen and one-half (15.5) percent of the total gross income from
such business conducted within the City. The total gross income from the business of providing
water utility service includes the "gross income from timber sales" of the utility as that term is
defined in this chapter.
(c) Wastewater. Upon every person engaging in the business of providing
wastewater utility service, a fee or tax equal to twenty (20) percent of the total gross income
from such business conducted within the City.
(d) Stormwater. Upon every person engaging in the business of providing
stormwater utility service, a fee or tax equal to twenty (20) percent of the total gross income
from such business conducted within the City. Eighty (80) percent of the fee or tax collected
under this subsection shall be allocated to the Transportation Capital Fund for street
improvements, unless otherwise allocated by the City Council.
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(e) Cable. Upon every person engaging in the business of transmitting television
signals by means of a cable distribution system commonly known as television cable service, a
fee or tax equal to seven (7) percent of the total gross income from such business conducted
within the City.
(f) Solid Waste. Upon every person engaging in the business of providing solid
waste collection service, a fee or tax equal to nine and one-half (9.5) percent of the total gross
income from such business conducted within the City.
(g) Electricity. Upon every person engaging in the business of producing,
transmitting, distributing or selling electricity, a fee or tax equal to six (6) percent of the total
gross income from such business conducted within the City.
(h) Telephones. Upon every person engaged in carrying on a telephone business for
hire or for sale of a commodity or a service within or partly within the corporate limits of the
City, a tax for the privilege of so doing business equal to six (6) percent of the total gross income
rendered with the City.
(1) Deductions. In computing the telephone tax, there shall be deducted from
the gross operating revenues the following items:
(i) Amounts derived from transactions in interstate or foreign
commerce or from any business which the City is prohibited from taxing under the Constitutions
of the United States or the State of Washington.
(ii) Amounts derived from that portion of network telephone service,
as defined in RCW 82.04.065, which represents charges to another communications company, as
defined in RCW 80.04.010, for connecting fees, switching charges or carrier access charges
relating to intrastate toll telephone services, or for access to, or charges for, interstate services or
charges for network telephone service that is purchased for the purpose of resale.
(iii) Adjustments made to a billing or to a customer account or to a
communications company accrual account in order to reverse a billing or charge that had been
made as a result of third -party fraud or other crime and was not properly a debt of a customer.
(iv) A complete deduction from gross income shall be allowed for
credit losses, only to cellular telephone service companies which keep their regular books of
account on an accrual basis, for cash discounts and credit losses actually sustained by a taxpayer
as a result of telephone service business.
(2) Allocation of Income — Cellular Telephone Service.
(i) Service Address. Payments by a customer for the telephone
service from telephones without a fixed location shall be allocated among taxing jurisdictions to
the location of the customer's principal service address during the period for which the tax
applies.
(ii) Roaming Phones. When the service is provided while a subscriber
is roaming outside the subscriber's normal cellular network area, the gross income shall be
assigned consistent with the taxpayer's accounting system to the location of the originating cell
site of the call, or to the location of the main cellular switching office that switched the call.
SECTION 6. 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.
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SECTION 7. 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 KDp)(-XY1-L�t- Y- , 2018.
12'? Y� t ,
ERIC YO GER, Council President
Approved this k day of ��J('lb , 2018.
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GREG W LER, Mayor
ATTEST: 1 O FORM:
l�
ANGE WOODS, City Clerk ROVER A. LUBOVICH, City Attorney
PUBLISHED the 1�? `-day of t�&W\ 6V Y'- 2018.
EFFECTIVE the day of , 2018.
ORDINANCE NO. �S
R:\Legal\Legal\Ordinances\Legal\Business Licensing and Taxes3.docx
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PROOF OF PUBLICATION
CITY OF BREMERTON - ENGINEERING
345 6TH STREET, STE 100
BREMERTON, WA 98337
STATE OF WISCONSIN, COUNTY OF BROWN
I, being first duly sworn on oath, deposes and says: That I am 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 the 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(s), to
wit: And on
November 13, 2018
such newspaper was regularly distributed to its subscribers
during all of said period.
Legal Clerk
Subscribed nd sworn to before on November 13, 2018:
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ORDINANCE NO. 5354
AN ORDINANCE of the City
Council of the City of Bremer-
ton, Washington, repealing
Section 11.12.085 BMC and
creating a new chapter,
Chapter 11.10 relating to the
Complete Streets Program.
ORDINANCE NO. 5355
AN ORDINANCE of the City
Council of the City of Bremer-
ton, Washington, amending
Chapters 3.48 of the Bremer-
ton Municipal Code entitled
"Business and Occupation
Taxes", Chapter 3.50 entitled
"Utility Taxes", and Chapter
3.86 entitled "Administrative
Provisions for Taxes".
ORDINANCE NO. 5356
AN ORDINANCE of the City
Council ofthe City of Bremer-
ton, Washington, establish-
ing the amount to be collect-
ed in 2019 by taxation on the
assessed valuation of tax-
able property within the City
limits of Bremerton and set-
ting the property levy rate.
ORDINANCE NO. 5357
AN ORDINANCE of the City
Council of the City of Bremer-
ton, Washington, reestab-
lishing and amending rates
and fees for services relating
to Animal Control, Bremer-
ton Kitsap Access Television
("BKAT"), Department of
Community Development,
Department of Financial
Services, Fire Department,
Gold Mountain Golf Course,
Ivy Green Cemetery, Kitsap
Conference Center, Munic-
ipal Court, Parking, Parks
and Recreation Department,
Police Department, Public
Records, Department of Pub-
lic Works and Utilities, Tax &
License, and Telecommuni-
cations.
ORDINANCE NO. 5358
AN ORDINANCE of the
City Council of the City of
Bremerton, Washington,
amending and reestablishing
the assessments, rates, fees
and charges established in
Ordinance No. 5340 regard-
ing rates and fees relating
to the Department of Public
Works and Utilities for water,
wastewater, stormwater and
other related services.
PASSED by the City Council
on the 7th day of November,
2018.
The full text of this ordinance
is available from the City
Clerk's Office, 345 Sixth
Street, Suite 100, Bremerton,
WA 98337.
Nov. 13, 2018 #2161342