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HomeMy WebLinkAboutReg 2017-09-05 Item 6B - Ordinance/Resolution - Business License FeesCOUNCIL AGENDA SYNOPSIS ------------------------Initials Meeting Date Prepared by Mayor's review Coull it review 07/24/17 VCjt 08/28/17 VC 42LA 09/05/17 VC ❑ Bid. hard 11tg Date ❑ Public Hearing At Date ITEM INFORMATION ImIT NO. 31 STAFF SPONSOR: VICKY CARLSEN ORIGINAL AGENDA DATE: 7/24/17 AGI.NDA ITE -NI TITLI,; A resolution and ordinance updating the business license fee schedule. Cx1'1?GORY ® Discussion Mtg Date 7/24 & 8128117 ❑ Motion Mtg Date ® Resolution Mtg Date 9/5/17 ® Ordinance Mtg Date 9/5/17 ❑ Bid. hard 11tg Date ❑ Public Hearing At Date ❑ Other Mtg Date SPONSOR ❑Council ❑Mayor ❑HR ❑DCD ®Finance ❑Fire OTS ❑P&R ❑Police ❑PIF ❑Court SPONSOR'S Council is being asked at the August 28, 2017 Committee of the Whole meeting to consider Su,NINI1RY forwarding an ordinance and resolution updating the fee structure for business licenses to the September 5 Regular Meeting for adoption. RI?vU3W1 D I31' ❑ C.O.W. Mtg. ❑ CDN Comm ® Finance Comm. ❑ Public Safety Comm. ❑ Trans &Infrastructure ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 7/18&8/8/17 COMMITTEE CHAIR: SEAL RECOMMENDATIONS: SPONSOR/ADMIN. Finance Department C0',\ I�.I Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPL?NDITURI: RI?Qullt1?D AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 7/24/17 Return to Finance Committee for additional discussion 8/28/17 Forward to Regular Meeting 9/5/17 MTG. DATE ATTACHMENTS 8/28/17 Informational Memorandum dated 8/16/17 Draft Ordinance Draft Resolution Minutes from the Finance Committee Meeting of 8/8/17 9/5/17 31 32 City o f Tukwila Washington Ordinance No. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING VARIOUS ORDINANCES AS CODIFIED IN TUKWILA MUNICIPAL CODE CHAPTER 5.04, "LICENSES GENERALLY," TO REPLACE "FTE" WITH "EMPLOYEE" IN RELATION TO THE BUSINESS LICENSE FEE STRUCTURE AND TO ELIMINATE REFERENCE TO A "COMBINED" BUSINESS LICENSE FEE; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City has analyzed current business license fees; and WHEREAS, the City has received multiple public comments that the existing business license and revenue generating regulatory license (RGRL) fee calculation based on full-time equivalent (FTE) can be difficult to calculate correctly; and WHEREAS, calculating the fee by "Employee" rather than FTE will simplify the fee calculation process for the public and City staff; and WHEREAS, the City Council finds that in the interest of compliance with the state law (per Engrossed House Bill 2005), to improve current practice and to provide a simplified fee calculation process for the public and City staff, the City should set a single business license fee pursuant to RCW 35A.82.020 for revenue generating purposes; and WHEREAS, the City Council has considered this ordinance, together with all public comment, and has determined the proposed amendments are in accord with the Comprehensive Plan; will not adversely affect the public health, safety, or general welfare; and are in the best interest of the citizens of the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 1 of 7 33 Section 1. No Impact on 2017 Business Licenses. It is the City Council's intention that the following amendments apply to Business Licenses issued by the City for 2018 and beyond, and have no impact on Business Licenses issued by the City for 2017. Section 2. TMC Section 5.04.010 Amended. Ordinance Nos. 2496 §1, 2381 §1, 2356 §1, 2333 §1 and 2315 §1 (part), as codified at Tukwila Municipal Code (TMC) Section 5.04.010, Subparagraph 10, are hereby amended to read as follows: 5.04.010 Definitions 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; 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. Employee is a unit of measure used to determine the Business License fee. Section 3. TMC Section 5.04.020 Amended. Ordinance Nos. 2496 §2, 2425 §1, 2381 §3, 2356 §2, 2333 §3 and 2315 §1 (part), as codified at TMC Section 5.04.020, are 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 apply to the Finance Department for a license to conduct such business. The application shall be upon a form furnished by the Finance Department on which the 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. Owners of residential rental property are not subject to the application requirements in this chapter but shall adhere to the application requirements in TMC Chapter 5.06. W: Word Process ing\Ordinances\Review business license fee structure 8-30-17 :bjs 34 Page 2 of 7 B. Fee — General. 1. The application must be accompanied by the appropriate application fee in accordance with the fee schedule adopted by resolution of the City Council. The license fee for the annual license (Business License fee) issued under this chapter shall be determined based on the total number of employees, and calculated in accordance with the fee schedule adopted by resolution of the City Council. 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 Business License 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 Fee. There shall be an annual minimum fee for a Business License in accordance with the fee schedule adopted by resolution of the City Council. An entity subject to exemption pursuant to TMC Section 5.04.090 may not pay a Business License fee. 1. A business with less than $12,000.00 of annual gross receipts shall pay the minimum license fee. 2. 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. 3. If a business has more than one location within the corporate limits of the City, the Business License fee for each location shall be no less than the minimum fee required under this chapter. 4. The Business License fee for a business required to be licensed under this chapter and not located within the City's corporate limits shall be determined by multiplying the appropriate Business License fee by the number of employees working 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 within the City's corporate limits at any time during the 12 -month period subject to licensure. 5. 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. 6. Businesses or organizations eligible for a temporary business license pursuant to TMC Section 5.04.010 will be required to pay the minimum fee under this chapter. This section shall not apply if the applicant is applying for a license related to W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 3 of 7 35 his/her participation at a City -sponsored event or as part of an event held at the Tukwila Community Center. If the applicant is applying for a license related to his/her participation at a City -sponsored event or as part of an event held at the Tukwila Community Center, the applicant is required to complete all application requirements and approvals required by the City's Parks and Recreation Department. 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. E. Over -reporting of Employees. In the event the business owner miscounted the number of employees by an error factor of more than 15% and paid an excess Business License fee as a result, a business 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 request and all supporting documentation no later than 60 days after the end of the calendar year in which the error was made. If the City is satisfied the business owner paid an excess Business License fee, the City will refund the excess amount paid to the business owner. F. 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 by an error factor of more than 15%, the business shall pay the balance of the corrected Business License 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 within 30 days. 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 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. W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 4 of 7 Section 4. TMC Section 5.04.050 Amended. Ordinance Nos. 2496 §3, 2381 §4, 2356 §4, 2333 §5 and 2315 §1 (part), as codified at TMC Section 5.04.050, are hereby amended to read as follows: 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 5. TMC Section 5.04.090 Amended. Ordinance Nos. 2356 §6, 2333 §7 and 2315 §1 (part), as codified at TMC Section 5.04.090, are hereby amended to read as follows: 5.04.090 Exemption A. Exemptions. The following entities may claim an exemption from the Business License fee, but if exempt under this subsection such entities shall still register under this chapter: W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 5 of 7 MA 1. Certain Organizations Exempt from Federal Income Tax. An organization that files with the city a copy of its current IRS 501(c)(3) exemption certificate issued by the Internal Revenue Service. 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. Civic groups, service clubs, and social organizations that are not engaged in any profession, trade, or occupation, but are 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. 5. Court interpreters who provide an oral translation between speakers who speak different languages, and who are either a certified interpreter, qualified interpreter, or registered interpreter, and who make 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. B. Nothing in this chapter shall be construed to require a license for any farmer, gardener, or other person to sell, deliver or peddle any fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats or any farm produce or edibles raised, caught, produced or manufactured by such person in any place within the State. Section 6. Corrections by City Clerk or Code Reviser. 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. W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 6 of 7 Section 7. 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 8. 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 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 12017. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Rachel B. Turpin, City Attorney Allan Ekberg, Mayor Filed with the City Clerk:_ Passed by the City Council: Published: Effective Date.- Ordinance ate:Ordinance Number: W: Word Processing\Ordinances\Review business license fee structure 8-30-17 :bjs Page 7 of 7 39 �,ity of Tukwi*la- Washington Resolution No. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, REPEALING RESOLUTION NO. 1875 AND ADOPTING A REVISED BUSINESS LICENSE FEE SCHEDULE. WHEREAS, the City has analyzed current business license fees; and WHEREAS, the City has received multiple public comments that the existing business license and revenue generating regulatory license (RGRL) fee calculation based on full-time equivalent (FTE) can be difficult to calculate correctly; and WHEREAS, calculating the fee by "Employee" rather than FTE will simplify the calculation process for the public and City staff; and WHEREAS, the City Council finds that in the interest of compliance with the state law (per Engrossed House Bill 2005), to improve current practice and to provide a simplified fee calculation process for the public and City staff, the City should set its business license fee pursuant to RCW 35A.82.020 for revenue generating purposes; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Repealer. Resolution No. 1875 is hereby repealed. Section 2. Fee Schedule. For 2018, Business License fees will be charged according to the following schedule: (continued...) W:\Word Processing\Resolutions\Business license fee schedule revised 8-30-17 VC:bjs Page 1 of 4 41 ANNUAL BUSINESS LICENSE FEE SCHEDULE Standard Business License fee: $50 per part-time employee* * Employee is defined at Tukwila Municipal Code $75.00 + Business License Fee (per above) Section 5.04. 0 10(10), copied below. plus • A "part-time employee" is an employee $70 per full-time employee* working 29 or less hours per week. equals total Business License Fee** - 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 $50. A business with one full-time employee (and no other employees) will pay a Business License Fee of $70. Minimum Business License fee: $50.00 *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; 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. 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) W:\Word Processing\Resolutions\Business license fee schedule revised 8-30-17 vc:bjs Page 2 of 4 42 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) Contractor based outside of Tukwila Same as Business License Fee (per above) Panoram premises $100.00 Panoram device $50.00 per device Panoram operator $725.00 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 W:\Word Processing\Resolutions\Business license fee schedule revised 8-30-17 vc:bjs Page 3 of 4 43 PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 12017. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Dennis Robertson, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: W:\Word Processing\Resolutions\Business license fee schedule revised 8-30-17 VC:bjs Page 4 of 4