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INFORMATIONAL MEMO <br />Page 2 <br />In 2016, 2,040 general business licenses were issued. This does not include Adult Entertainer, <br />Adult Manager, Amusement Device /Center, Peddler nor Cabaret licenses. Below is a chart <br />detailing businesses and how many part-time employees were reported to the City. <br />Number of Part- <br />Time Employees <br />Number of <br />Businesses <br />% <br />201 + <br />7 <br />0.34 <br />151 — 200 <br />4 <br />0.20 <br />101 — 150 <br />7 <br />0.34 <br />76 — 100 <br />9 <br />0.44 <br />51 - 75 <br />24 <br />1.18 <br />21 — 50 <br />70 <br />3.43 <br />11 - 20 <br />77 <br />3.77 <br />6 — 10 <br />110 <br />5.39 <br />2 — 5 <br />366 <br />17.94 <br />0 —12 <br />1,366 <br />66.96 <br />Total Issued <br />2,040 <br />100.00 <br />DISCUSSION <br />Fee Structure <br />The goal is to streamline the way the business license fee is calculated prior to moving to the <br />State BLS system. If the fee is calculated using number of employees multiplied by a flat fee, <br />the applicant could easily calculate the fee with little effort or error. There would be significantly <br />less misreported hours or loss of revenue. The city would also benefit by having accurate <br />statistics on the number of employees in Tukwila. These statistics are not currently available as <br />the way the fee is calculated leaves room for error and /or omission on number of employees. <br />Additionally, the State requires that the application and /or fee should be within the DOR's <br />technical ability to administer, which may not be possible under the current method. <br />Proposed Change to Fee Structure <br />The City is proposing to change the fee structure to $70 for each full -time employee (defined as <br />30 hours or more each week), plus $50 for each part-time employee. The full -time rate is <br />proposed to increase from $67 to $70 per employee, or approximately 5 %. This is equivalent to <br />less than 1% increase per year since the business license fee was enacted in 2011. A reduced <br />rate for part-time employees is suggested as a way to minimize the impact to those businesses <br />with significant part-time staffing levels. <br />RECOMMENDATION <br />The Council is being asked to approve the ordinance and resolution and consider this item at <br />the July 24, 2017 Committee of the Whole meeting and subsequent August 7, 2017 Regular <br />Meeting. <br />ATTACHMENTS <br />- -Draft Ordinance <br />- -Draft Resolution <br />- -House Bill Report — EHB 2005 <br />2 This number likely includes businesses who do have part time employees but who did not <br />report them. <br />W:12017 Info Memos\BusLicRestructure.doc <br />2 <br />