Loading...
HomeMy WebLinkAbout3184 Related to Business Licensing and Taxation; Amending Business Licensing and Regulations, Adding Exemptions to Filing and Paying Business and Occupation Taxes, and Amending Chapters 5.04A, 5.04B, and 5.08 of the Port Townsend Municipal CodeOrdinance 3184 Page 1 of 2 Ordinance No. 3184 AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON, RELATED TO BUSINESS LICENSING AND TAXATION; AMENDING BUSINESS LICENSING AND REGULATIONS, ADDING EXEMPTIONS TO FILING AND PAYING BUSINESS AND OCCUPATION TAXES, AND AMENDING CHAPTERS 5.04A, 5.04B, AND 5.08 OF THE PORT TOWNSEND MUNICIPAL CODE WHEREAS, the City of Port Townsend exercises its power to license and tax businesses for revenue purposes through Chapters 5.04A, 5.04B, and 5.08 of the Port Townsend Municipal Code; and, WHEREAS, of the approximately 2700 licensed businesses in the City, approximately 513 (19%) report gross revenues of over $100,000 per year; those businesses pay approximately 92% of the total business and occupation taxes collected by the City; and, WHEREAS, approximately 1640 businesses (61 %) report gross revenues of less than $20,000 per year. Under the current City Code, they report their revenue, but are exempt from paying tax; and, WHEREAS, Finance staff estimates that they process over 8,100 tax returns each year — around .63 of a full time equivalent employee's time. This does include management, legal and other support time; and, WHEREAS, staff recommends that Council simplify the licensing and business and occupation tax process. Eliminating the requirement for those businesses whose gross revenues are less than $100,000 per year to file or pay business and occupation taxes will reduce the administrative burden on, and accounting expenses for, those businesses; and, WHEREAS, staff recommends increasing the licensing fees to keep this proposition relative revenue -neutral. Although this does increase the cost to businesses, staff believes that this increase will be offset by the reduction in other costs; NOW, THEREFORE, the City Council of the City of Port Townsend do ordain as follows: Section 1. Chapter 5.04A Business and Occupation Taxes of the Port Townsend Municipal Code is amended as set forth in Exhibit A. Section 2. Chapter 5.04B Administrative Provisions for Business and Occupation Taxes of the Port Townsend Municipal Code is amended as set forth in Exhibit B. Section 3. Chapter 5.08 Business Licenses of the Port Townsend Municipal Code is amended as set forth in Exhibit C. Section 4 Publication. This Ordinance shall be published by an approved summary consisting of the title. Section 5. Effective Date. This Ordinance shall take effect and be in force five days Ordinance 3184 Page 2 of 2 after the date of its publication in the manner provided by law. The new licensing and business and occupation tax provisions shall be effective as of January 1, 2018. ADOPTED by the City Council of the City of Port Townsend at a regular meeting thereof, held this 6th day of November, 2017. Attest: Joanna Sanders, MMC City Clerk 1 eborali S. Stins n Mayor Approved as to form: Steven L. Gross City Attorney Ordinance 3184 Exhibit A Page 1 of 2 EXHIBIT A 5.04A.050 Imposition of the tax — Tax or fee levied. A. Except as provided in subsection B 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: 1. 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 within the city for sale or for commercial or industrial use, multiplied by the rate of 0.2 of one percent. 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. 2. 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 within the city, multiplied by the rate of 0.2 of one percent. 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. 3. Upon every person engaging within the city in the business of making sales at wholesale, except persons taxable under subsection (A)(4) of this section; 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 0.2 of one percent. 4. 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 0.2 of one percent. 5. Upon every person engaging within the city in the business of (a) printing, (b) both printing and publishing newspapers, magazines, periodicals, books, music, and other printed items, (c) publishing newspapers, magazines and periodicals, (d) extracting for hire, and (e) 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 0.2 of one percent. 6. 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 0.2 of one percent. 7. 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 0.2 of one percent. This subsection includes, among others, and without limiting Ordinance 3184 Exhibit A Page 2 of 2 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, a sale at wholesale, or a retail service. B. The gross 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 isle er less than $29100,000„ e� � tlt�r $ 01111 c1 a y. rt it°� ...a-q*arter4y._ apoft4ig-a "& (Ord. 2959 § 1, 2007; Ord. 2882 § 1, 2004). Ordinance 3184 Exhibit B EXHIBIT B 5.04B.040 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. A. Other than any annual license fee or registration fee assessed under this chapter, the tax imposed by this chapter shall be due and payable in quarterly installments for businesses whose gross receipts are equal to or exceeded $100 OOOITin the revious year= or that are estimated to g q&-.p ` exceed 100,000 its the current ear. 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. B. 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. C. For businesses whose gross recei is are equal to or exceed $100 000 returns must be filed and returned by the due date whether or not any tax is owed. D. For purposes of the tax imposed by Chapter 5.04A PTMC, any person whose value of products, gross proceeds of sales, or gross income of the business, subject to tax after all allowable deductions, is equal tee less than $2-0100,000 in the current calendar year shall not be rem m etij file a return w - n 4,— — - ei r tt tip -feltift t h" e-kmM.� r i led t i rt t€ t lvat l ewer. r t a t veff- .... ax ma5, be . E. 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. F. 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. G. 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. (Ord. 2960 § 1, 2007; Ord. 2883 § 1, 2004). Ordinance 3184 Exhibit C EXHIBIT C 5.08.060 Fee/term. A. Fee. Unless otherwise provided by this chapter, the required license fee for a business shall be as follows: Businesses Reporting Gross Receipts equal to ormmore than $100,000 $75 er ear Businesses Reporting Gross Receipts equal to or more than $20,000 & $75 perms less than $100,000 Businesses Reportinfz Gros � �s Receipts less than $20,000 I $30 per year Fee calculations shall be based either.on tlie�r�:vc.t)us ear' Gross receipts 6nintis deductions allowed under PTMC 5.04A.100 or on the business's' estimated rg oss recei is for the license year. , 1"leis fee is nonrefundable, whether or not the application is later denied. The license fee may be prorated to accommodate the expiration date established by the Master License Service. The full fee payable shall include the Master License Service application handling fee authorized by RCW 19.02.075. B. Term. Unless otherwise provided by this chapter, a license shall expire on the date established by the Master License Service. (Ord. 3043 § 1 (Exh. A), 2010; Ord. 3040 § 1 (Exh. A), 2010; Ord. 2887 § 1, 2004; Ord. 2460 § 1, 1995).