HomeMy WebLinkAbout3125 B&O Tax exemption Ordinance 3125
Ordinance No. 3125
AN ORDINANCE OF THE CITY OF PORT TOWNSEND, AMENDING CHAPTER
5.04A (BUSINESS AND OCCUPATION TAX) OF THE PORT TOWNSEND
MUNICIPAL CODE AND ESTABLISHING AN EXEMPTION FOR NEW BUSINESSES
LOCATING IN THE CITY
WHEREAS,the City imposes a business and occupation tax on business activities
conducted in the City; and
WHEREAS, as the City's economy slowly improves, it is in the City's best interest to
encourage new manufacturing businesses to locate or relocate in the City; and,
WHEREAS, a temporary exemption from paying business and occupation taxes will
reduce the cost of entry for new and expanding manufacturing businesses in the City.
NOW, THEREFORE,the City Council of the City of Port Townsend do ordain as
follows:
Section 1. Amendments. Chapter 5.04A.090 (B and O Tax) of the Port Townsend
Municipal Code is amended by adding a new subsection 5.04A.090L, "New Business Exemption
Established."
See attached Exhibit A (incorporated by reference).
Section 2. Severability. If any provision of this ordinance or its application to any person
or circumstance is held invalid, the remainder of the ordinance, or the application of the
provision to other persons or circumstances, is not affected.
Section 3. Publication. This Ordinance shall be published by an approved summary
consisting of the title.
Section 4. Effective Date. This ordinance shall take effect and be in force five days after
the date of its publication in the manner provided by law.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof, held this 20th day of January, 2015.
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David King (�
Mayor
Attest: Approved as to form:
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Joanna Sanders, CMC Steven L. Gross
City Clerk City Attorney
Ordinance 3125
Exhibit.4
Page 1 of 3
Exhibit A
Chapter 5.04A BUSINESS AND OCCUPATION TAX
Sections:
5.04A.090 Exemptions.
5.04A.090 Exemptions.
A. Public Utilities. This chapter shall not apply to any person in respect to a business activity
with respect to which tax liability is specifically imposed under the provisions of PTMC
5_84.030.
B. Investments—Dividends from Subsidiary Corporations. This chapter shall not apply to
amounts derived by persons, other than those engaging in banking, loan, security, or other
financial businesses, from investments or the use of money as such, and also amounts derived as
dividends by a parent from its subsidiary corporations.
C. Insurance Business. This chapter shall not apply to amounts received by any person who is an
insurer or their appointed insurance producer upon which a tax based on gross premiums is paid
to the state pursuant to RCW 48.14.020; and provided further, that the provisions of this
subsection shall not exempt any bonding company from tax with respect to gross income derived
from the completion of any contract as to which it is a surety, or as to any liability as successor
to the liability of the defaulting contractor.
D. Employees.
1. This chapter shall not apply to any person in respect to the person's employment in the
capacity as an employee or servant as distinguished from that of an independent contractor.
For the purposes of this subsection, the definition of employee shall include those persons
that are defined in the Internal Revenue Code, as hereafter amended.
2. A booth renter is an independent contractor for purposes of this chapter.
E. Amounts Derived from Sale of Real Estate. This chapter shall not apply to gross proceeds
derived from the sale of real estate. This, however, shall not be construed to allow an exemption
of amounts received as commissions from the sale of real estate, nor as fees, handling charges,
discounts, interest or similar financial charges resulting from, or relating to, real estate
transactions. This chapter shall also not apply to amounts received for the rental of real estate if
the rental income is derived from a contract to rent for a continuous period of 30 days or longer.
Ordinance 3125
Exhibit A
Page 2 of 3
F. Mortgage Brokers' Third-Party Provider Services Trust Accounts. This chapter shall not apply
to amounts received from trust accounts to mortgage brokers for the payment of third-party costs
if the accounts are operated in a manner consistent with RCW 19.146.050 and any rules adopted
by the director of financial institutions.
G. Amounts Derived from Manufacturing, Selling or Distributing Motor Vehicle Fuel. This
chapter shall not apply to the manufacturing, selling, or distributing motor vehicle fuel, as the
term "motor vehicle fuel" is defined in RCW 82.36.010 and exempt under RCW 82.36.440;
provided, that any fuel not subjected to the state fuel excise tax, or any other applicable
deduction or exemption, will be taxable under this chapter.
H. Amounts Derived from Liquor, and the Sale or Distribution of Liquor. This chapter shall not
apply to liquor as defined in RCW 66.04.010 and exempt in RCW 66.08.120.
I. Casual and Isolated Sales. This chapter shall not apply to the gross proceeds derived from
casual or isolated sales.
J. Accommodation Sales. This chapter shall not apply to sales for resale by persons regularly
engaged in the business of making retail sales of the type of property so sold to other persons
similarly engaged in the business of selling such property where (1)the amount paid by the
buyer does not exceed the amount paid by the seller to the vendor in the acquisition of the article
and (2)the sale is made as an accommodation to the buyer to enable the buyer to fill a bona fide
existing order of a customer or is made within 14 days to reimburse in kind a previous
accommodation sale by the buyer to the seller.
K. Taxes Collected as Trust Funds. This chapter shall not apply to amounts collected by the
taxpayer from third parties to satisfy third-party obligations to pay taxes such as the retail sales
tax, use tax, and admission tax. (Ord. 3085 § 1 (Exh. A), 2012; Ord. 2959 § 1, 2007; Ord. 2882
§ 1, 2004).
L. New and Expanded Manufacturing Business Exemption.
1. This chapter shall not apply to qualifying manufacturing businesses applying for their
initial business license with their principal place of business in the city between January
1 2015 and December 31, 2017. Said new manufacturing businesses shall receive an
exemption for the total business and occupation tax due at each filing for a period of 3
years or 12 consecutive quarters from said manufacturing businesses' date of inception.
The quarter within which the business license is granted shall be counted as the first
quarter.
2 . Expanded Businesses. This chapter shall not apply to qualifying manufacturing
businesses that expand their manufacturing capabilityby moving to a different facility or
adding on to an existing facility,acility, and that apply for the exemption between January 1,
2015 and December 31, 2017. Said expanding manufacturing businesses shall receive an
Ordinance 3125
Exhibit A
Page 3 of 3
exemption for the total business and occupation tax due at each filing for a period of 3
years or 12 consecutive quarters beginning the quarter immediately following the date of
approval of the manufacturing businesses' application for exemption.
3. For purposes of this Subsection, a"qualifying manufacturing business"must meet all
of the following criteria as of the date of application:
a) possess a current state and city business license;
b) be current on all local state and city taxes;
c) if expanding their manufacturing capability demonstrate, through approved
building plans, that the expansion will result in an increase of at least 25% in
square footage of space devoted exclusively to manufacturing or in direct support
of manufacturing, over the currently-available space. "Space devoted exclusively
to manufacturing or indirect support of manufacturing" includes, but is not limited
to, actual production space, short-term storage, and shipping.(General office
space or associated retail, such as tasting rooms, do not qualify as "direct
support."