HomeMy WebLinkAboutFIN 2025-07-28 Item 1A - Ordinance - Business License Regulations Amendments
City of Tukwila
Thomas McLeod, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
FROM: Aaron BeMiller, Finance Director
BY: Adam Schierenbeck, Acting Fiscal Manager
CC: Thomas McLeod
DATE: July 22, 2025
SUBJECT: Business Licensing – Amendments to Chapter 5.04 TMC
ISSUE
The Finance Department is recommending amendments to Chapter 5.04 of the Tukwila
Municipal Code (TMC) concerning business licensing. The amendments will align the code with
current practice and state law, create administrative efficiencies, and strengthen enforcement of
the City’s business licensing requirements.
BACKGROUND
In 2019, the City joined into a partnership with the Washington State Department of Revenue
(DOR) for administering City business license applications and issuing City business license
endorsements. Staff have identified the need to align the TMC with current practice as it relates
to DOR’s administration of business licenses, in addition to improving other areas of the code.
Also, RCW 35.90.080 requires the City to adopt the mandatory provisions of the model ordinance
developed by Washington cities when imposing a general business license requirement. Effective
January 1, 2026, the minimum threshold under which a nonresident business is exempt from
paying a business license fee will increase from $2,000 to $4,000, per the model ordinance.
DISCUSSION
Staff are proposing the following amendments to administer business licensing. An amendment
to the minimum threshold is required by state law.
Definition Changes
Certain definition changes are recommended based upon definitions that have been adopted by
other Washington cities. The new definitions add clarity and do not otherwise alter the City’s
business licensing requirements.
Purpose of Business License Regulations
The business licensing provisions are deemed an exercise of the power of the City to license for
regulation and for revenue. Ensuring the legality of businesses and compliance with other
sections of the TMC, for which separate code enforcement provisions already exist, is
secondary and distinct from issuance of a general business license. It is recommended that the
purpose statement be amended accordingly, and that a new section be added to clarify that the
issuance of a business license does not indicate the legality of the business.
Minimum threshold
The Washington State business license model ordinance provides that if the annual gross
income derived by a nonresident within Tukwila does not exceed $2,000 per calendar year, then
the business license fee is waived. This threshold amount will increase to $4,000 effective
January 1, 2026, and will subsequently be adjusted every 48 months based on the Consumer 1
INFORMATIONAL MEMO
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Price Index for each of the preceding four years. This change is required by state law.
Businesses with gross income under the threshold are still required to apply for and obtain a
City business license.
Enforcement
New and amended enforcement provisions are recommended to more effectively administer
and enforce the City’s business licensing requirements. These include:
• A more efficient means for staff to assess underpaid license fees, including the right to
estimate the license fee due if the business has not kept or does not provide requested
information to substantiate the proper amount due.
• Stronger enforcement tools for failure to follow the business licensing requirements,
including the possibility of issuing a criminal violation or injunction.
• Specific language stating that the Finance Director and staff have the right to inspect
documentation or places of business to ensure compliance with business license
regulations and may call upon other city departments to ensure compliance.
FINANCIAL IMPACT
The code changes are not anticipated to have a significant financial impact on business license
fee revenues. The change to the minimum threshold may result in reduced business license fee
revenue from nonresident businesses. However, this amount will likely be offset by a greater
ability to assess and enforce past due or underpaid license fees.
RECOMMENDATION
The Council is being asked to approve the ordinance and consider this item at the August 11,
2025 Committee of the Whole Meeting and subsequent August 18, 2025 Regular Meeting.
ATTACHMENTS
A. Draft Business License Ordinance
B. 2026 Business License Model Threshold Update (from AWC)
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON; AMENDING VARIOUS ORDINANCES
AS CODIFIED THROUGHOUT TUKWILA MUNICIPAL CODE
(TMC) CHAPTER 5.04, “BUSINESS LICENSES & REGULATIONS,
LICENSES GENERALLY”; REPEALING TMC SECTIONS 5.04.050,
5.04.080, AND 5.04.105; ESTABLISHING TMC SECTIONS 5.04.140
AND 5.04.150; TO AMEND THE BUSINESS LICENSE FEES,
MINIMUM THRESHOLD AND ADMINISTRATIVE PROVISIONS
RELATED TO BUSINESS LICENSING; PROVIDING FOR
SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, in 2019, the City joined into a partnership with the Washington State
Department of Revenue (DOR) for administering City business license applications and
issuing City business license endorsements; and
WHEREAS, RCW 35.90.080 requires the City to adopt the mandatory provisions of
the model ordinance developed by Washington cities when imposing a general business
license requirement, including a minimum threshold under which a nonresident business
is relieved of the requirement to pay the business license fee, which will be amended
effective January 1, 2026; and
WHEREAS, additional amendments to the City’s business licensing code will align
the code with current practice, create administrative efficiencies, and strengthen
enforcement of the City’s business licensing requirements;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 5.04.010 Amended. Ordinance Nos. 2315 §1 (part), 2333
§1, 2356 §1, 2381 §1, 2496 §1, 2544 §2, and 2588 §2, as codified at TMC Section 5.04.010,
“Definitions,” are hereby amended to read as follows:
5.04.010 Definitions
For the purpose of this chapter, the following definitions shall apply:
DRAFT
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1. “Business,” means and includes all activities, occupations, trades, pursuits, or
professions located and/or engaged in within the City, that involves the manufacturing or
processing of materials of any type; the sale of goods, wares or merchandise; the
rendition of services or the repair of goods, wares or merchandise for any consideration
with the object of gain, benefit or advantage to the person engaging in the same or to any
other person or class, directly or indirectly, and includes nonprofit enterprises, whether or
not an office or physical location for the business lies within the City limits.
2. “Department,” means Finance Department.
3. “Director,” means the Finance Director or his or her designee.
4. “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.
a. 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 minimus business activities in the City
without having to pay a business license fee. The activities listed in this section are
illustrative only and are not intended to narrow the definition of "engaging in business" as
defined above. 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.
b. Without being all inclusive, any one 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:
(1) 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.
(2) Owning, renting, leasing, using, or maintaining, an office, place of
business, or other establishment in the City.
(3) Soliciting sales.
(4) Making repairs or providing maintenance or service to real or tangible
personal property, including warranty work and property maintenance.
(5) 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.
(6) Installing, constructing, or supervising installation or construction of, real
or tangible personal property.
(7) Soliciting, negotiating, or approving franchise, license, or other similar
agreements.
(8) Collecting current or delinquent accounts.
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(9) Picking up and transporting tangible personal property, solid waste,
construction debris, or excavated materials.
(10) 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.
(11) Rendering professional services such as those provided by accountants,
architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers,
baseball clubs and other sports organizations, chemists, consultants, psychologists, court
reporters, dentists, doctors, detectives, laboratory operators, teachers, veterinarians.
(12) Meeting with customers or potential customers, even when no sales or
orders are solicited at the meetings.
(13) Training or recruiting 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.
(14) Investigating, resolving, or otherwise assisting in resolving customer
complaints.
(15) 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.
(16) Delivering goods in vehicles owned, rented, leased, used, or maintained
by the person or another acting on its behalf.
c. 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, it need not register and obtain a business license.
(1) Meeting with suppliers of goods and services as a customer.
(2) Meeting with government representatives in their official capacity, other
than those performing contracting or purchasing functions.
(3) 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. This provision does not
apply to any board of director member or attendee engaging in business such as a member
of a board of directors who attends a board meeting.
(4) Renting tangible or intangible property as a customer when the property is
not used in the City.
(5) 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.
(6) Conducting advertising through the mail.
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(7) Soliciting sales by phone from a location outside the City.
d. A seller located outside the City merely delivering goods into the City by means
of common carrier is not required to register and obtain a business license, provided that it
engages in no other business activities in the City. Such activities do not include those in
subsection 5.04.010(4)(c).
e. The City expressly intends that engaging in business include any activity
sufficient to establish nexus for purposes of applying the license fee 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.
5. “License or licensee,” as used generally in this chapter, means and includes
respectively the words “permit” or “permittee” or the holder for any use or period of time
of any similar privilege, wherever relevant to any provision of this chapter or other law or
ordinance means any business that applies for or is granted a business license. The term
shall also mean the person who submits a business license application for approval, the
owner or operator of a business, and any corporation, partnership, nonprofit, or
organization which owns or operates the business.
6. “Nonprofit organization” includes individual person(s), partnerships, joint ventures,
societies, associations, churches, clubs, trustees, trusts or corporations; or any officers,
agents, employees, factors or any kind of personal representatives of any thereof, in any
capacity, acting either for himself or any other person under either personal appointment
or pursuant to law who qualifies under definition of and certification by the Internal
Revenue Service as nonprofit.
76. “Person,” means any individual, receiver, agent, trustee in bankruptcy, trust,
estate, firm, co-partnership, joint venture, company, joint stock company, business trust,
corporation, society, or group of individuals acting as a unit, whether mutual, cooperative,
fraternal, nonprofit or otherwise.
87. “Person engaged in business” means the owner or one primarily beneficially
interested in lawful business for profit and not employees.
98. “Home occupation” means any business conducted in a residence within the
corporate city limits of Tukwila, such business being subject to the requirements set forth in
TMC Chapter 18.06, “Definitions,” in the section entitled “Home Occupation.”
109. “Employee” means any individual employed at any business who performs any
part of their duties within the City of Tukwila including all full-time, part-time, and temporary
employees or workers. The term includes self-employed persons, sole proprietors, owners,
officers, managers, and partners. An independent contractor is not an employee. 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
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b. Any person who is on the business’s payroll, andincludes 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.
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. Employee is a unit of measure used to determine the Business
License fee.
10. “Business Licensing Service” or “BLS” means the office within the Washington
State Department of Revenue providing business licensing services to the City.
11. “Business license” means a license issued by the City authorizing a person to
engage in business within the City. “Business license” also means the licensing document
produced by the Business Licensing Service upon which the City-issued business license
appears as an endorsement.
12. “City” means the City of Tukwila.
13. “Place of business” means a temporary or permanent physical location within City
limits where business is conducted or is intended to be conducted.
Section 2. TMC Section 5.04.012 Amended. Ordinance No. 2315 §1 (part), as
codified at TMC Section 5.04.012, “Purpose,” is hereby amended to read as follows:
5.04.012 Purpose
The purpose provisions of this chapter shall be deemed an exercise of the power of
the City to license for regulation and for revenue. is to regulate and insure the legal
conduct of businesses, assist in the effective administration of health, fire, building, zoning
and other codes of the City, to impose fees for revenue purposes, and to provide a means
for obtaining public information and compiling statistical information on existing and new
businesses in the City.
Section 3. TMC Section 5.04.020 Amended. Ordinance Nos. 2315 §1 (part), 2333
§3, 2356 §2, 2381 §3, 2496 §2, 2544 §3, and 2588 §4, as codified at TMC Section 5.04.020,
“Applications and fees required,” is hereby amended to read as follows:
5.04.020 Applications and fees required
A. Application Required. Any person desiring to establish or conduct any business
enterprise or undertaking within the corporate limits of the City shall first file a master
business license application through the BLSWashington State Department of Licensing
Master License Service in coordination with the City of Tukwila Finance Department for
a license to conduct such business. The application shall be upon a form furnished by
the BLS Washington State Department of Licensing Master License Service on which the
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applicant shall state the company name and address; the nature of the business activity
or activities in which he/she desires to engage; the place where the business will be
conducted; the number of employees, whether full or part-time, on the payroll as of
January 1, or, if a new business, the number to be employed on the opening date; the
Washington State Unified Business Identifier (UBI) number; and other information
pertaining to the business as required by the City or BLS. The applicant shall be required
to provide all information requested on said form and failure to do so shall be grounds for
refusing to issue the business license. If a person maintains more than one place of
business within the City, a separate general business license registration is required for
each business. Owners of residential rental property are not subject to the application
requirements in this chapter but shall adhere to the application rental business license
and inspection program requirements in TMC Chapter 5.06.
B. Fee – General. 1. The application must be accompanied by the appropriate
application business license fee in accordance with the fee schedule as adopted by
separate resolution of the City Council, as well as the Master License ServiceBLS
handling fee required by RCW 19.02.075. For persons with a place of business in
Tukwilathe City, other than a home occupation,T the business license fee for the annual
license (Business License fee) issued under this chapter shall be determined based on
the total number of employees. The business license fee shall be determined by
multiplying the appropriate Business License fee by the number of employees working at
or reporting from a location within the City’s corporate limits, in accordance with the fee
schedule adopted by resolution of the City Council. In no event shall the Business
License fee be less than the minimum fee set forth in this chapter. If the number of
employees is not known at the time of application or renewal of the license, the business
shall estimate the maximum number of employees they anticipate working any time
during the 12-month period subject to licensure and remit the associated business license
fee.
2. It will be the responsibility of the business to determine the total number of employees
and, if required, demonstrate to the satisfaction of the Finance Director that the
information pertaining to the Bbusiness Llicense fee is accurate. Businesses without a
full year of operating history shall estimate the number of employees that will be employed
in a 12-month period.
C. Minimum ThresholdFee.There shall be an annual minimum fee for a Business
License in accordance with the fee schedule adopted by resolution of the City Council.
1. For purposes of the license by this chapter, any person or business whose annual
value of products, gross proceeds of sales, or gross income of the business in the City is
equal to or less than the threshold amount provided in this subsection $2,000 and who
does not maintain a place of business within the City, shall submit a business license
registration to the Finance Director or designee but is exempt from the business license
fee requirement as provided in this chapter. The threshold does not apply to regulatory
license requirements or activities that require a specialized permit.
1. Prior to January 1, 2026, the threshold amount is $2,000 per calendar year.
2. Beginning January 1, 2026, the threshold amount is $4,000 per calendar
year. The threshold amount will be adjusted every forty-eight months on January 1, by an
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amount equal to the increase in the Consumer Price Index (“CPI”) for “West Urban, All Urban
Consumers” (CPI-U) for each 12-month period ending on June 30 as published by the
United States Department of Labor Bureau of Labor Statistics or successor agency. To
calculate this adjustment, the current rate will be multiplied by one plus the cumulative four-
year (forty-eight-month) CPI increase using each 12-month period ending on June 30 of
each prior year and rounded to the nearest $100. However, if any of the annual CPI
increases are more than five (5) percent, a five (5) percent increase will be used in
computing the annual basis, and if any of the annual CPI decreased during the forty-eight-
month period, a zero (0) percent increase will be used in computing the annual basis.
2. Businesses doing business in the City that have no employees physically
working within the City’s corporate limits shall pay the minimum fee required under this
chapter.
3. An entity subject to exemption pursuant to TMC Section 5.04.090 need not pay
a Business License fee. An entity engaging in some activities or functions that are exempt
from the Business License fee and some that are not exempt shall pay a Business License
fee based on the number of employees involved in the functions or activities that are not
exempt.
D. New Businesses. The Business License fee for a new business shall be based
on the estimated number of employees that will work in Tukwila for a 12-month period.
If, during the first license year for a new business, the City determines the actual number
of employees is significantly different than the estimated number identified by the
business owner, the amount of the Business License fee will be recalculated for the new
business. If the revised Business License fee is higher than the original Business License
fee paid by the business owner for the first license year, the business owner must pay the
difference to the City within 30 days after written notice of the amount owed is sent to the
business owner by the City.
ED. Over-reporting of Employees. In the event the licensee business owner
miscounted overreported the number of employees, by an error factor of more than 15%
and paid an excess Bresulting in an overpayment of the business Llicense fee as a result,
a business the licensee may request that the City refund the overpayment. The request
must be made in writing to the Finance Department, and the City must receive the refund
request and all supporting documentation no later than 60 days after the end of the
calendar year in which the error overpayment was made. If the City is satisfied the
business owner licensee paid an excess Bbusiness Llicense fee, the City will refund the
excess amount paid to the business owner.
FE. Under-reporting of Employees. If, at the time of license renewal, the City
determines the business owner under-reported the number of employees for the
preceding year license period or has otherwise underpaid the business license fee
properly dueby an error factor of more than 15%, the business shall pay the balance of
the corrected Bbusiness Llicense fee (calculated as the difference between the paid
Business License fee and the corrected Business License fee). The Finance Director
shall mail written notice of the balance due to the business owner, and the business shall
pay the balance due to the City within 30 days of the date the written notice is mailed by
the City. A penalty of 20% of the balance due will be applied if payment is not received
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within 30 days. An additional penalty as adopted by separate resolution of the City
Council shall be assessed if payment is not received by the notice due date or any
extension thereof.
G. Payment by Draft or Check. Payment made by draft or check shall not be
deemed a payment of the Business License fee unless and until the same has been
honored in the usual course of business, nor shall acceptance of any such check or draft
operate as a quittance or discharge of the Business License fee unless and until the check
or draft is honored. Any person who submits a Business License fee payment by check
to the Washington State Department of Licensing Master License Service or City,
pursuant to the provisions of this chapter, shall be assessed an NSF fee set by the
Finance Director if the check is returned unpaid by a bank or other financial institution for
insufficient funds in the account or for any other reason.
Section 4. TMC Section 5.04.030 Amended. Ordinance Nos. 2315 §1 (part) and
2588 §5, as codified at TMC Section 5.04.030, “Issuance of a license and annual renewal,”
is hereby amended to read as follows:
5.04.030 Issuance of a license and annual renewal
A. Upon review and approval of the a business license application by the City, the
BLS Washington State Department of Licensing Master License Service or the Finance
Director or designee shall issue a business license to the applicant. The license shall
grant to the applicant the privilege to conduct such business at a designated location in
the City for the license period set forth in TMC Section 5.04.040.
B. Persons continuing to engage in business within the City shall renew their
business license(s) each year. Businesses must pay a renewal fee, as well as the
BLSMaster License Service handling fee required by RCW 19.02.075. The annual
business license renewal fee shall be in accordance with the fee schedule adopted by
resolution of the City Council. The annual fee may be prorated in order to conform the
license expiration date with the expiration date established by the Master License
Service.Persons who do not renewing their business license by the expiration date may
be subject to a late renewal penalty charged by the Master License ServiceBLS as
provided in RCW 19.02.085.
C. Failure to renew the a business license within one hundred twenty (120) days of
expiration will result in the cancellation of the business license and will requires a new
application for a business license to engage in business in the City.
Section 5. TMC Section 5.04.040 Amended. Ordinance Nos. 2315 §1 (part), 2333
§4, and 2356 §3, as codified at TMC Section 5.04.040, “Prorating fee,” is hereby amended
to read as follows:
5.04.040 License periodProrating fee
The license fee set forth in this chapter for new business license applications shall
be for the calendar period beginning the date the business license application is submitted
by the licensee through the last day of the same month in the following year. The license
fee for business license renewals shall be for one year following the date of the prior
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business license expiration date. , and each person engaged in business must pay the
full license fee for the current year. License fees are notn refundable and are not prorated,
except as provided in TMC Section 5.04.100, regardless of whether the business
operates for the entire license period calendar year, or whether the business license is
denied, revoked, withdrawn or suspended with cause.
Section 6. Repealer. Ordinance Nos. 2315 §1 (part), 2333 §5, 2356 §, 2381 §4, 2496
§3, and 2544 §4, as codified at TMC Section 5.04.050, “Late acquisition or renewal”, are
hereby repealed, thereby eliminating this section:
5.04.050 Late acquisition or renewal
A. Penalty. For new businesses, failure to pay the Business License fee by the first
day of commencing business operations pursuant to TMC Section 5.04.020 will result in
a late acquisition penalty in accordance with the fee schedule adopted by resolution of
the City Council. For renewing businesses, failure to pay the Business License renewal
fee by January 31st shall constitute delinquency and shall result in a penalty in
accordance with the fee schedule adopted by resolution of the City Council. No business
license and/or renewal for the current period shall be granted until all delinquent fees,
together with penalties, have been paid in full. The Finance Director or his/her designee
is authorized, but not obligated, to waive all or any portion of the penalties and interest
provided herein in the event the Finance Director determines that the late payment was
the result of excusable neglect or extreme hardship.
B. Collection of Fees and Penalties. Any license fee due and unpaid under this
chapter, and all penalties thereon, shall constitute a debt to the City and may be collected
in court proceedings in the same manner as any other debt in like amount, which remedy
shall be in addition to any and all other existing remedies.
C. Revocation of License. The Finance Director may revoke any business license
issued pursuant to this chapter to any business or other person who is in default in
payment of any license fee hereunder, or who shall otherwise fail to comply with any of
the provisions of this chapter. Notice of such revocation shall be issued pursuant to TMC
Section 5.04.110.D. On and after the date of the notice of revocation, any business
subject thereto that continues to engage in business shall be deemed to be operating
without a license, and shall be subject to any and all penalties herein provided.
D. There shall be a penalty to reinstate any business license revoked through
nonpayment of the Business License fee. The penalty shall be identified in the fee
schedule adopted by resolution of the City Council.
Section 7. TMC Section 5.04.060 Amended. Ordinance No. 2315 §1 (part), as
codified at TMC Section 5.04.060, “Transferability,” is hereby amended to read as follows:
5.04.060 Transferability
The license granted in pursuance hereof shall be personal to the licensee and it shall
not be assignable or transferable to any other person. A change in the Unified Business
Identifier issued by the Washington State Department of Revenue will require the
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submission of a new business license application and payment of the applicable business
license fee as set forth in this chapter.
Section 8. TMC Section 5.04.070 Amended. Ordinance Nos. 2315 §1 (part), 2333
§6, 2356 §5, 2381 §5, and 2496 §4, as codified at TMC Section 5.04.070, “Change in UBI
#, ownership, physical location or nature of business,” is hereby amended to read as follows:
5.04.070 Change in UBI #, ownership, physical location or nature of business
The license granted pursuant hereto shall be used to conduct the particular business
or type of business at the designated address for which such license is issued. Any
license holder with a change in the nature of the business, a change in the Unified
Business Identifier (UBI) issued by the Washington State Department of Licensing, or a
change in the physical location of the business, and/or a change in ownership of the
business shall immediately submit an newapplication for licensure to the BLSFinance
Department documenting the relevant change(s). A change in the UBI or a change in
ownership for the business will require payment of the applicable license fee set forth in
the fee schedule adopted by resolution of the City Council, in addition to the submission
of a new application.
Section 9. Repealer. Ordinance No. 2315 §1 (part), as codified at TMC Section
5.04.080, “Required – Display,” is hereby repealed, thereby eliminating this section:
5.04.080 Required – Display
It is unlawful for any person to engage in or carry on any business activity in the
City without first procuring a license as provided in this chapter. The license shall
thereafter be prominently displayed in the place of business of the applicant.
Section 10. TMC Section 5.04.090 Amended. Ordinance Nos.2315 §1 (part), 2333
§7, 2356 §6, 2544 §5, 2588 §6, and 2593 §2, as codified at TMC Section 5.04.090,
“Exemption,” is hereby amended to read as follows:
5.04.090 Exemptions
A. Exemptions. The following persons entities may claim an exemption are
exempt from the Bbusiness Llicense fee, but if exempt under this subsection such
persons entities shall still register apply for and obtain a business license under this
chapter:
1. Certain Organizations exempt from federal income tax under a
provision of 26 USC Section 501(c). An Such organization that files with the City a
copy of its current IRS 501(c)(3) exemption determination letter issued by the must be
able to show satisfactory proof from the Internal Revenue Service (IRS) of its tax exempt
status, except in the case of religious organizations which are assumed by the IRS of
being exempt from taxes under 26 USC Section 501(c)(3) without application for or
issuance of a determination letter by the IRS.
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2. A governmental entity that engages solely in the exercise of governmental
functions. Activities that are not exclusively governmental, such as some of the activities
of a hospital or medical clinic, are not exempt under this chapter.
3. A nonprofit business operated exclusively for a religious purpose, upon
furnishing proof to the Finance Director of its nonprofit status. For the purposes of this
chapter, the activities that are not part of the core religious functions are not exempt.
4. A civic group, service club, or social organization that is not engaged in any
profession, trade, or occupation, but is organized to provide civic, service, or social
activities in the City.
a. Examples of such organizations include but are not limited to:
Soroptomists, Kiwanis, Lions’ Rotary, American Legion, children’s and adults’ athletic
leagues and similar types of groups, clubs or organizations.
53. A court interpreter who provides an oral translation between speakers who
speak different languages, and who is either a certified interpreter, qualified interpreter,
or registered interpreter, and who makes less than $12,000 in gross annual revenue in
Tukwila, Washington. Certified, qualified and registered interpreters are defined as
follows:
a. "Certified interpreter" means an interpreter who is certified by the
administrative office of the courts.
b. "Qualified interpreter" means a person who is readily able to interpret
or translate spoken and written English for non-English-speaking persons and to interpret
or translate oral or written statements of non-English-speaking persons into spoken
English.
c. "Registered interpreter" means an interpreter who is registered by the
administrative office of the courts.
64. A public card room (also known as a social card room) with a house-banked
license.
B. Nothing in this chapter shall be construed to require a license for any farmer
solely engaged in the business of, gardener, or other person to selling, delivering or
peddlinge any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats or any
farm produce or ediblesother agricultural product that is raised, caught, produced or
manufactured by such person in any place within the State. “Agricultural product” does
not include cannabis or cannabis products as defined in RCW 69.50.101.
Section 11. TMC Section 5.04.100 Amended. Ordinance Nos. 2315 §1 (part) and
2588 §7, as codified at TMC Section 5.04.100, “Failure to Pay Fee,” is hereby amended to
read as follows:
5.04.100 Failure to Pay Fee
A. If any person engaged in business fails or refuses to pay the required license fee
for any yearperiod of time as herein provided, they shall not be granted a license for the
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current year until such delinquent license fees in accordance with the fee schedule
adopted by resolution of the City Council have been paid, in addition to the current years’
required fee(s)the Director shall assess all license fee amounts that should have been
paid for the last four years, as determined by the Director, plus a penalty as adopted by
separate resolution of the City Council. Such fees may be prorated as the City deems
necessary if the assessment period is less than a 12-month license period. Such fees
may be collected by the City by proper legal action brought for that purpose if any person
engaged in business fails or refuses to pay the license fee. This remedy is cumulative
and not exclusive.
B. If a person fails or refuses a Department request to provide or make available
records to determine the amount of the license fee due under this chapter, the Director is
authorized to determine the amount of the license fee payable by obtaining facts and
information upon which to base the estimate of the fees due. Such fee assessment shall
be deemed prima facie correct and shall be the amount of the business license fee owing
to the City by the person.
C. The balance of the business license fee shall be due within 30 days of the date
the written notice is mailed by the City. An additional penalty as adopted by separate
resolution of the City Council shall be assessed if payment is not received by the notice
due date or any extension thereof. Business license fees may be collected by the City by
proper legal action brought for that purpose if any person engaged in business fails or
refuses to pay the license fee. This remedy is cumulative and not exclusive.
Section 12. Repealer. Ordinance Nos. 2315 §1 (part) and 2588 §8, as codified at
TMC Section 5.04.105, “Additional Requirements for Issuance of Business License,” is
hereby repealed, thereby eliminating this section:
5.04.105 Additional Requirements for Issuance of Business License
A. A business license will only be issued provided the building, structure, operation
or location of the business for which the license is sought complies with the requirements
or standards of the Tukwila Municipal Code.
B. In any case where an applicant seeks a business license for a business to be
located in a building or structure for which a building or land use permit is required to
operate the business as proposed, whether as a newly constructed building or structure
or a remodeled building or structure, the permit process, including final
inspections/issuance of occupancy permits, shall be completed prior to issuance of a
business license.
C. In any case where an applicant seeks a business license for a business to be
located in a building or structure for which no building or land use permit is required to
operate the business as proposed, the building department may require the business
premises to be inspected for compliance with life and safety codes. If the inspection
reveals outstanding code violations, the business license will not be issued until all life
and safety code violations are resolved.
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Section 13. TMC Section 5.04.110 Amended. Ordinance Nos. 2315 §1 (part), 2333
§8, 2352 §2, 2496 §5, and 2588 §9, as codified at TMC Section 5.04.110, “Denial,
Suspension, Revocation,” is hereby amended to read as follows:
5.04.110 Denial, Suspension, Revocation
A. The Finance Director may deny any business license application pursuant to
TMC Section 5.04.105.
B. A. The Finance Director may deny, suspend or revoke any business license
under this chapter where one or more of the following conditions exist:
1. The licensee is in default of any fee, chargestax or amounts due and payable
to the City of Tukwila, as outlined in the Tukwila Municipal Code or City policy.
2. The license was procured by fraud or by a false or misleading representation
of fact in the application, or in any report or record required to be filed with the Finance
Department.
3. The building, structure, equipment, operation or location of the business for
which the license was issued does not comply with the requirements or standards of the
Tukwila Municipal Code.
4. The license holder, his or her employee, agent, partner, director, officer or
manager has knowingly violated any provisions of any chapter of the Tukwila Municipal
Code, or has knowingly permitted, failed to prevent, or has otherwise allowed a violation
of any of the provisions of any chapter of the Tukwila Municipal Code to occur on his or
her business premises.
5. The license holder, his or her employee, agent, partner, director, officer or
manager has repeatedly violated any provision of City policies or the Tukwila Municipal
Code after having received notice of such violation.
6. Conduct of the business would be in violation of any local, state or federal
law, rule or regulation prohibiting the conduct of that type of business.
7. The property at which the business is located has been determined by a
court to be a chronic nuisance property, a Violation Notice and Order for a chronic
nuisance property has been issued and not timely remedied or appealed, or the Hearing
Examiner has determined the property to be a chronic nuisance property, as provided in
TMC Chapter 8.27.
8. The building or structure for which the licensee seeks a business license
requires a building or land use permit under any provision of City policies or the Tukwila
Municipal Code for which the permit process, including final inspections and/or issuance
of occupancy permits, has not been completed.
9. The building or structure for which the licensee seeks a business license has
not been inspected for compliance with life and safety codes, if such are required under
any provision of City policies or the Tukwila Municipal Code, or if such inspection reveals
outstanding code violations.
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CB. Upon determination that grounds for denial, suspension or revocation of a license
exist, the Finance Director shall send the licenseeapplicant or license holder a Notice of
Denial, Suspension or Revocation. The Notice of Denial, Suspension or Revocation shall
set forth the grounds for and terms of the denial, suspension or revocation, and a
statement advising the applicant or license holder that he/she may appeal the Notice of
Denial, Suspension or Revocation in accordance with the provisions of TMC Section
5.04.112. The filing of such appeal shall stay the action of the Finance Director pending
decision on the appeal by the City Hearing Examiner or other hearing body pursuant to
TMC Section 5.04.112.
DC. Receipt of the Notice of Denial, Suspension or Revocation. The Notice of
Denial, Suspension or Revocation shall be: (1) sent to the licenseeapplicant or license
holder by registered mail at the address provided on the license application; (2) hand
delivered to the address provided on the license application; or (3) posted upon the
premises where such licenseeapplicant or license holder conducts the business that is
the subject of the denied, suspended or revoked license. Notice shall be deemed
received by the licenseeapplicant or license holder upon posting, hand delivery, or 3
business days after mailing, whichever occurs first.
D. Ten (10) calendar days after receipt of the notice of denial, suspension, or
revocation, any business subject thereto that continues to engage in business shall be
deemed to be operating without a license and shall be subject to penalties and
enforcement as provided in TMC Section 5.04.115, unless an appeal has been filed
pursuant to TMC Section 5.04.112 for which a written decision has not been issued.
E. There shall be assessed a penalty to reinstate any business license that has
been revoked or suspended under this subsection, as adopted by separate resolution of
the City Council.
Section 14. TMC Section 5.04.115 Amended. Ordinance Nos. 2315 §1 (part) and
2549 §2, as codified at TMC Section 5.04.115, “Penalties,” is hereby amended to read as
follows:
5.04.115 Violations and Enforcement Penalties
Any violation of this chapter, or failure to comply with any of the requirements of this
chapter, may be enforced as provided for in this section. Each separate date, or portion
thereof, during which any violation occurs shall constitute a separate violationshall be
subject to enforcement and penalties as prescribed in TMC Chapter 8.45 and the
issuance of a Notice of Violation in accordance with TMC Section 8.45.070.
A. Civil infraction. A business, licensee, or person who violates any provision of
this chapter commits a Class 1 civil infraction as set forth in RCW 7.80.120(1)(a), as
currently enacted or hereafter amended. An infraction issued pursuant to this section shall
be issued by code enforcement officers, filed in the Tukwila Municipal Court and
processed in the same manner as other infractions filed in the Tukwila Municipal Court.
If a business, licensee, or person cited for failure to obtain a business license appears
before the Tukwila Municipal Court and provides written evidence that he or she obtained
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a business license prior to adjudication of the infraction, the monetary penalty shall be
reduced to $150.
B. Civil code enforcement. A civil code enforcement action may be instituted
pursuant to Chapter 8.45 TMC to effectuate the abatement or corrective action required
as a result of a violation of this chapter. Failure to timely abate the violation or take
corrective action, as required by an issued Notice of Violation, may result in the imposition
of a fine in accordance with TMC 8.45.120(A)(2) and 8.45.080(C).
C. Criminal violation. A person who knowingly violates a provision of this chapter,
or commits a repeat violation of this chapter, is guilty of a misdemeanor, punishable by
up to the maximum penalty established in RCW 9A.20.021(3), as now enacted or
hereafter amended. For purposes of this section, repeat violation means either a prior
committed finding by the Tukwila municipal court of an infraction issued under this
chapter, or a committed finding by the hearing examiner of a notice of violation issued
under Chapter 8.45 TMC, has occurred or has been committed by the same business,
licensee, or person within a five-year period. To constitute a repeat violation, the violation
need not be the same violation as the prior violation.
D. Injunction. In addition to or as an alternative to any other enforcement or penalty
provided for in this chapter, and because a violation constitutes an actual injury to the
community, the City may seek injunctive or other equitable relief to prevent any activity in
violation of this chapter.
E. Any license fee or penalty due, unpaid, and delinquent under this chapter shall
constitute a debt to the City. The City may, pursuant to Chapter 19.16 RCW, use a
collection agency to collect unpaid license fees or penalties, or it may seek collection by
court proceedings, which remedies shall be in addition to all other remedies.
Section 15. Regulations Established. A new TMC section 5.04.140 is hereby
established to read as follows:
5.04.140 License Does Not Indicate Legality of Business
The issuance of a license pursuant to this chapter shall not be evidence of the legality
of a business or that such business is conducted in conformity with any laws or regulations
of the City of Tukwila, the State of Washington, or the United States. The issuance of a
business license shall not prevent the City, the State of Washington, or the United States
from taking any action relating to the conduct of the business or the licensee, including
but not limited to an action to revoke the license or deny an application for a future license,
an action to cause the cessation of the business, or any action set forth in this chapter.
Section 16. Regulations Established. A new TMC section 5.04.150 is hereby
established to read as follows:
5.04.150 Administration
A. The Director shall have general charge of, and supervision over, the
administration and enforcement of this chapter.
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B. The Director may call upon other City departments to aid in the enforcement of
this chapter.
C. The licensee shall, upon reasonable request, provide or allow the Director to
inspect relevant documentation and/or to inspect places of business for verification of the
requirements of this chapter.
Section 17. Corrections by City Clerk or Code Reviser Authorized. Upon
approval of the City Attorney, the City Clerk and the code reviser are authorized to make
necessary corrections to this ordinance, including the correction of clerical errors;
references to other local, state or federal laws, codes, rules, or regulations; or ordinance
numbering and section/ subsection numbering.
Section 18. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 19. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City and shall take effect and be in full force within five
days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this _________ day of ____________________, 2025.
ATTEST/AUTHENTICATED:
Andy Youn-Barnett, CMC, City Clerk Thomas McLeod, Mayor
APPROVED AS TO FORM BY: Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
Office of the City Attorney
18
2026 City Business License Model Threshold update
Effective January 1, 2026
What are the main changes to the model
threshold?
The main change in the update would make a one-
time increase to a higher threshold to $4000 for out-
of-city businesses from the current $2,000 threshold,
effective January 1, 2026.
Other changes include:
• Every four years thereafter, the threshold would
have an automatic periodic increase based on
cumulative inflation.
• The rates of inflation would be calculated using
the Consumer Price Index-U (CPI-U) Western for
June of each year compared to the previous year
for the previous four years.
• The rate of inflation would be calculated as zero
in any year in which inflation was negative and
capped at 5% per year or 20% over four years if
inflation exceeded those amounts.
• To make the threshold easier to administer, the
cumulative inflation amount would be rounded to
the nearest $100.
Could my city still require a no fee registration
for out-of-city businesses below the threshold?
Cities retain the local option of requiring a no-fee
registration for out-of-city businesses below the
threshold.
Was the definition of “engaging in business”
changed?
No, the definition of engaging in business has not
changed since the 2018 model was adopted.
What are the deadlines for all cities with
business licenses to adopt the 2026 model
threshold?
Cities with a business license must adopt the model
by January 1, 2026.
However, cities that currently partner with the state’s
Business Licensing Service (BLS) for business
licensing administration must adopt it by mid-October
2025, because they must provide BLS 75-day
notice of any changes to their business licenses,
including this mandatory change.
What if my city has a higher threshold?
Cities can choose to enact a higher threshold. The
$4,000 city threshold for out-of-city businesses is the
minimum level that every city must enact.
What if my city wants to have a threshold that
applies to in-city businesses in addition to the
out-of-city business threshold?
The $4,000 threshold level for out-of-city businesses
is a mandatory minimum threshold that every city
business license city must adopt, but the law does
not impact the city’s authority to have exemptions or
other thresholds.
Cities can continue to require a license for
businesses located in the city without regard to the
threshold (unless the city chose to exempt these
businesses).
Cities can also choose to enact a separate threshold
exemption that applies to in-city businesses.
Who should my city notify when the model is
adopted?
BLS partner cities: Send a completed Change
Request Form to BLS notifying them of the update
All other cities: Email Sheila Gall, AWC
(sheilag@awcnet.org) so we can track updates.
How will businesses find out about the changes?
Consider providing information on changes to your
business license by adding information to your
license renewal letter, sending a letter to your
potentially impacted businesses, updating
information on your city’s website or presenting to
your local chamber.
Background on the 2018 model threshold
In the 2017 session, EHB 2005 (RCW 35.90) passed
requiring three actions by cities with business
licenses and local B&O taxes. The law required cities
to make changes to business licensing, including
requiring cities with business licenses to establish a
workgroup to create a model business license
threshold by July 2018 for adoption by all business
license cities by January 1, 2019.
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2018 model ordinance for local business licenses
– minimum threshold
The 2018 model included a mandatory definition of
“engaging in business” and a $2000 minimum
threshold (or occasional sale) exemption to establish
when out-of-town or transient businesses are
required to be licensed. All business license cities
adopted the model by January 1, 2019 (RCW
35.90.080).
Contact
Sheila Gall
General Counsel
sheilag@awcnet.org
wacities.org
20
City Business License Model Ordinance
1. Outline of Changes to Business License Model Ordinance
• Effective date to January 1, 2026.
• One-time increase to a higher threshold to $4,000 for out-of-city businesses.
• Combined with an automatic periodic increase four years later based on cumulative inflation. The rate
of inflation would be calculated as zero in any year in which inflation was negative and capped at 5%
per year or 20% over four years if inflation exceeded those amounts.
• The rates of inflation would be calculated using the Consumer Price Index-U (CPI-U) Western for June
of each year compared to the previous year for the previous four years.
• To make the threshold easier to administer, the cumulative inflation amount would be rounded to the
nearest $100.
• Cities that partner with the state’s Business License Service would need to update their ordinance in
time to provide 75-days' notice to the Department of Revenue of the change. Cities that partner with
File local would need to notify them of an expected system change by August.
• Cities would retain the local option of requiring a no-fee registration for out-of-city businesses below the
threshold and the local option of imposing a higher threshold than the model minimum threshold.
2. Changes to Model Threshold
The 2018 model is amended to include the threshold change effective January 1, 2026.
Model business license threshold options: (cities would adopt one of the options effective January 1, 2026)
1. Threshold Exemption Option:
To the extent set forth in this section, the following persons and businesses shall be exempt from the
registration, license and/or license fee requirements as outlined in this chapter: (1) Any person or
business whose annual value of products, gross proceeds of sales, or gross income of the business in
the city is equal to or less than $2,000 [or higher threshold as determined by city] and who does not
maintain a place of business within the city shall be exempt from the general business license
requirements in this chapter. The exemption does not apply to regulatory license requirements or
activities that require a specialized permit.
Beginning January 1, 2026, the threshold amount is $4000 [or higher threshold as determined by city].
The threshold amount will be adjusted every forty-eight months on January 1, by an amount equal to
the increase in the Consumer Price Index (“CPI”) for “West Urban, All Urban Consumers” (CPI-U) for
each 12-month period ending on June 30 as published by the United States Department of Labor
Bureau of Labor Statistics or successor agency. To calculate this adjustment, the current rate will be
multiplied by one plus the cumulative four-year (forty-eight month) CPI increase using each 12-month
period ending on June 30 of each prior year, and rounded to the nearest $100. However, if any of the
annual CPI increases are more than five (5) percent, a five (5) percent increase will be used in
computing the annual basis and if any of the annual CPI decreased during the forty-eight-month period,
a zero (0) percent increase will be used in computing the annual basis.
2. Threshold with Fee-free License/Registration-only Option:
For purposes of the license by this chapter, any person or business whose annual value of products,
gross proceeds of sales, or gross income of the business in the city is equal to or less than $2,000 [or
higher threshold as determined by city] and who does not maintain a place of business within the city,
shall submit a business license registration to the Director or designee. The threshold does not apply to
regulatory license requirements or activities that require a specialized permit.
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Beginning January 1, 2026, the threshold amount is $4000 [or higher threshold as determined by city].
The threshold amount will be adjusted every forty-eight months on January 1, by an amount equal to
the increase in the Consumer Price Index (“CPI”) for “West Urban, All Urban Consumers” (CPI-U) for
each 12-month period ending on June 30 as published by the United States Department of Labor
Bureau of Labor Statistics or successor agency. To calculate this adjustment, the current rate will be
multiplied by one plus the cumulative four-year (forty-eight month) CPI increase using each 12-month
period ending on June 30 of each prior year, and rounded to the nearest $100. However, if any of the
annual CPI increases are more than five (5) percent, a five (5) percent increase will be used in
computing the annual basis and if any of the annual CPI decreased during the forty-eight-month period,
a zero (0) percent increase will be used in computing the annual basis.
[Note: City would list this fee-free license in its business license rates section as $0 or no fee.]
3. Background Information
• Model threshold was required by 2017 legislation (RCW 35.90.080: Adoption of model ordinance) to
address out-of-city licensing/delivery concerns.
• 2018 final recommendation was $2000 for out-of-city businesses, with option to require no-fee
registration only requirement below threshold.
• Changes must be adopted by cities with same effective date (RCW 35.90.080(1)(c)).
• Model cannot be updated more frequently than every 4 years.
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