HomeMy WebLinkAboutSpecial 2019-02-11 Item 2K - Resolution - Business License Fee Schedule Relating to Persons or Businesses Operating without a Physical PresenceCOUNCIL AGENDA SYNOPSIS
Initials
Meet* Date
Prepared by
Mayor :r review
Couniil review
02/11/19
Vicky
,..,
02/19/19
...
ITEM INFORMATION
ITEM NO.
4.C. &
Spec 2.K.
STAFF SPONSOR: VICKY CARLSEN
ORIGINAL AGENDA DATE: 2/11/19
AGENDA ITEM TITLE Adopt a Business License Fee Resolution
CATF;(;()Ry Disausion
Mtg Date 2/11/19
E Motion
Alt,g Date
11 Resolution
E Ordinance
Mt,g Date
E Bid Award
Aftg Date
E Public El wring
.A.1.g Dale
El Other
Mg Date
Mt,g Date 2/19/19
SPONSOR Council EMayor Eli-IR EDCD 1 Finan 'e EFire LJTS P&R EPolice PIF LlCotert
SP oNSoR' s Council is being asked to approve a resolution adopting a business license fee schedule
SUMMARY that includes language exempting businesses without a physical presence in the City and
where gross revenue does not exceed $2,000 from the business license fee.
RiwirmilM BY E C.O.W. Mtg. El CDN Comm Eg Finance Comm. [1] Public Safety Comm.
E Trans &Infrastructure fl Arts Comm. Parks Comm. 11 Planning Comm.
DATE: 1/28/19 CONIMITME CHAIR: MCLEOD
RECOMMENDATIONS:
SPONSOR/ADMIN.
CommrimE
Finance
Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
EXPENDITURE REQUIRIM AMOUNT BUDGETED APPROPRIATION REQUIRED
$ $ $
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
2/11/19
MTG. DATE
ATTACHMENTS
2/11/19
Informational Memorandum dated 1/23/19
Draft Resolution
Minutes from the Finance Committee meeting of 1/28/19
2/19/19
23
24
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance Council Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
CC: Mayor Ekberg
DATE: January 23, 2019
SUBJECT: Update to Business License Fee Resolution
ISSUE
Approve update to Business License Fee Resolution.
BACKGROUND
At the October 15, 2018 Regular Meeting, Council approved Ordinance No. 2588 which adopted
the "model ordinance" language required by the State. Included in this ordinance is language that
exempts businesses operating within the City of Tukwila boundaries without a physical presence
and with gross revenue less than $2,000 from paying a business license fee.
At the November 19, 2018 Regular Meeting, Council approved Resolution No. 1952 that set the
business license fees for 2019 and 2020. The resolution that was approved by Council included
a business license fee of $100 for contractors operating within the City of Tukwila boundaries
without a physical presence.
The legislation was reviewed by the State prior to moving through the Committee and Council
process.
DISCUSSION
The City is set to officially transition the business license function to the State effective March 28,
2019. Before the State will allow the transition to occur, we are required to update the fee
resolution to include the exemption language for those businesses without a physical presence
and where gross revenue does not exceed $2,000.
The draft resolution, with changes tracked, now includes the required language.
RECOMMENDATION
Staff is asking that this resolution be considered at the February 11, 2019 Committee of the Whole
and subsequent February 19, 2019 Regular Meeting.
ATTACHMENTS
Draft resolution with changes tracked.
25
26
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF TUKWILA, WASHINGTON, REPEALING
RESOLUTION NO. 1952 AND ADOPTING A REVISED
BUSINESS LICENSE FEE SCHEDULE TO CLARIFY
LICENSING REQUIREMENTS FOR PERSONS OR
BUSINESSES OPERATING WITHIN THE CITY
BOUNDARIES WITHOUT A PHYSICAL PRESENCE.
WHEREAS, the City has analyzed current business license fees; and
WHEREAS, the State of Washington's streamlined sales tax mitigation payments
are being phased out in 2019 and will cease in 2020, thereby reducing General Fund
revenue by $1.2 million annually; and
WHEREAS, sales tax revenue, due to destination -based sales tax distribution rules,
has not grown at the same rate as expenditures; and
WHEREAS, the City is seeking to take a balanced approach to ensure that ongoing
expenditures are paid for with ongoing revenue; and
WHEREAS, Resolution No. 1952, adopted on November 19, 2018, did not include
language exempting those persons or businesses operating within the City boundaries
without a physical presence, and with gross income in the City equal to or less than
$2,000, from the annual business license fee;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Repealer. Resolution No. 1952 is hereby repealed.
Section 2. Fee Schedule. For 2019 and 2020, Business License fees will be
charged according to the following schedule:
(continued...)
W:\Legislative Development\Business license fee schedule revised -no physical presence strike-thru 1-16-19
VC:bjs Review and analysis by Barbara Saxton Page 1 of 4
27
ANNUAL BUSINESS LICENSE FEE SCHEDULE
Standard Business License fee:
FOR A 2019 BUSINESS LICENSE
$45 per part-time employee*
plus
$91 per full-time employee*
equals total Business License Fee**
* Employee is defined at Tukwila Municipal Code
Section 5.04.010(10), copied below.
• A "part-time employee" is an employee
working 29 or less hours per week.
• A "full-time employee" is an employee working
30 or more hours per week.
FOR A 2020 BUSINESS LICENSE
$56 per part-time employee*
plus
$112 per full-time employee*
equals total Business License Fee**
* Employee is defined at Tukwila Municipal Code
Section 5.04.010(10), copied below.
• A "part-time employee" is an employee
working 29 or less hours per week.
' A "full-time employee" is an employee working
30 or more hours per week.
** The total Business License fee due will vary based on the combination of part-
time and full-time employees employed by the business.
For example, a business with one part-time employee (and no other employees) will
pay a Business License Fee of $45 for a 2019 license and $56 for a 2020 license.
A business with one full-time employee (and no other employees) will pay a Business
License Fee of $91 for a 2019 license and $112 for a 2020 license.
Minimum Business License fee:
For a 2019 Business License: $45.00
For a 2020 Business License: $56.00
Business License Fee for contractors operating within the City of Tukwila
boundaries without a physical presence:
$100.00 flat fee if gross income or gross proceeds of sales in the City is greater
than $2,000. If gross income or gross proceeds of sales in the City is $2,000 or
less, there is no fee to obtain a business license.
W:\Legislative Development\Business license fee schedule revised -no physical presence strike-thru 1-16-19
VC:bjs Review and analysis by Barbara Saxton
28
Page 2 of 4
*Tukwila Municipal Code Section 5.04.010(10):
10. "Employee" means and includes each of the following persons who are not
required by the City to have his/her/its own separate City of Tukwila business license:
a. Any person employed at any business who performs any part of their
duties within the City of Tukwila or reports from a location within the City's corporate
limits; and
b. Any person who is on the business's payroll, and includes all full-time, part-
time, and temporary employees or workers; and
c. Owners, officers, managers, and partners; and
d. Any other person who performs work, services or labor at the business
including, but not limited to, family members, regardless of whether they receive a wage
from the business; and
e. Self-employed persons, sole proprietors, owners, officers, managers, and
partners; and
f. Any other person who performs work, services or labor at the business,
including an independent contractor who may be exempt from requirements to have a
separate City of Tukwila business license.
Other annual license fees:
Adult Cabaret establishment
$500.00 + Business License Fee (per above)
Adult Cabaret entertainer
$75.00 + Business License Fee (per above)
Adult Cabaret manager
$75.00
Adult Entertainment Cabaret
establishment
$500.00 + Business License Fee (per above)
Adult Entertainment Cabaret
entertainer
$75.00 + Business License Fee (per above)
Adult Entertainment Cabaret
manager
$75.00
Amusement Center
$500.00 + Business License Fee (per above)
Amusement device fee
$50.00 per device + Business License Fee (per above)
Amusement device removal fee
$50.00 per device
Amusement device storage fee
$10.00 per device per day
Appeal Fee
$250.00
Cabaret establishment
$300.00 + Business License Fee (per above)
W:\Legislative Development\Business license fee schedule revised -no physical presence strike-thru 1-16-19
VC:bjs Review and analysis by Barbara Saxton
Page 3 of 4
29
Penalty for late acquisition of
business license (operating a
business without a valid license)
If received or postmarked within 0 to 30 days of
operation = 5% of license fee
If received or postmarked within 31 to 60 days of
operation = 10% of license fee
If received or postmarked within 61 to 90 days of
operation = 15% of license fee
If received or postmarked within 91 to 120 days of
operation = 20% of license fee
If received or postmarked at 121 days of operation or
longer = maximum of 25% of license fee
Penalty for late renewal of business
license
If received or postmarked Feb. 1 through Feb. 28
= 15% of license fee
If received or postmarked March 1 through March 31
= 30% of license fee
If received or postmarked April 1 or later
= 45% of license fee
Peddler/Solicitor
$70.00
Reinstatement of license fee
$50.00
Washington State Patrol WATCH
background check
$12.00
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2019.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk Kathy Hougardy, Council President
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
W:\Legislative Development\Business license fee schedule revised -no physical presence strike-thru 1-16-19
VC:bjs Review and analysis by Barbara Saxton Page 4 of 4
30
City of Tukwila
City Council Finance Committee
FINANCE COMMITTEE
Meeting Minutes
January28, 2019 - 5:30 p.m. - Hazelnut Conference Room, City Hall
Councilmembers: Thomas McLeod, Chair; Verna Seal, De'Sean Quinn
Staff: David Cline, Peggy McCarthy, Vicky Carlsen, Bruce Linton, Jeff Friend, Aaron
Williams, Laurel Humphrey
CALL TO ORDER: Chair McLeod called the meeting to order at 5:30 p.m.
I. PRESENTATIONS
II. BUSINESS AGENDA
A. Resolution: Business License Exemption for Outside Contractors
Staff is seeking Council approval of a resolution that would update the business license fee
schedule to exempt businesses without a physical presence and where gross revenue does not
exceed $2,000. Following the adoption of this resolution the City can official transition the
business license function to the State effective March 28, 2019. UNANIMOUS APPROVAL.
FORWARD TO FEBRUARY 11, 2019 COMMITTEE OF THE WHOLE.
B. Ordinance: Correcting General Fund in the 2019-2020 Biennial Budget
Staff is seeking Council approval of an ordinance that would correct a math error in the previous
budget adoption ordinance, wherein $900k in property tax and sales tax revenue were not
reflected per the Council's direction. Once corrected, the final budget books will be printed and
distributed. Chair McLeod asked if this error would result in any process changes. Finance staff is
planning to reevaluate and improve the internal budget development process overall. Staff
asked for Committee permission to bypass Committee of the Whole in order to expedite the
distribution of the budget books. UNANIMOUS APPROVAL. FORWARD TO FEBRUARY 4, 2019
REGULAR MEETING.
C. November 2018 General Fund Expenditure Report
Staff presented the Committee with a financial update through November 2018, which describes
the general state of departmental expenditures and to highlight significant trends. General Fund
expenditures totaled $54.6 million as compared to the allocated budget of $57.9 million. When
compared to the allocated budget, Human Resources, City Attorney, Court, Fire and Technology
& Innovation Services are above budget. It is expected that when compared to the full budget at
year-end these departments will be near or below budget. Staff will bring the preliminary
December report to Committee when available, then present the year-end report to the full
Council. DISCUSSION ONLY.
31