HomeMy WebLinkAboutFIN 2018-07-17 Item 2A - Legislation - Commercial Parking TaxTO:
FROM:
ofBY:
City Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
Finance Committee
Peggy McCarthy, Finance Director
Laura Crandall, Finance Staff
CC: Mayor Ekberg
DATE: July 11, 2018
SUBJECT: Revisions to Tukwila Municipal Code 3.48 — Commercial Parking Tax
ISSUE
Recommendation for Council to modify Tukwila Municipal Code (TMC) 3.48 to: 1) Increase the
Commercial Parking Tax Rate and 2) add a penalty for late payment.
BACKGROUND
In 1998, the Tukwila City Council adopted Ordinance 1852 which provided for a five percent tax
to be levied on gross revenues generated by commercial parking lots in the City. Since the
adoption of the CJrdinanoe, the taxation rate has remained unchanged. A public hearing on
proposed revisions was held on November 21, 2017 and the draft ordinance has been further
revised based upon comments at the hearing.
TMC requires that parking taxes be remitted on or betore the last day of the month fotiowing the
month during which the taxes were collected. However, the Municipal Code does not outline a
penalty for late payments, and so there is no incentive for payments to be made on time.
DISCUSSION
The initial proposed revision included a rate change from 5% to 1 5%, with the new rate effective
January 1, 2018. That Ordinance has been revised to include a more gradual schedule of
increase, shown below.
• January 1, 2019 8% tax
• January 1, 2020 11% tax
• January 1.2021 15% tax
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This change alleviates most of the concerns heard from the business community.
In addition, over 50% of parking taxes in Tukwila were paid late. Implementing a 10% late fee
would encourage businesses to submit taxes on time, improving the predictability of cash flow,
and bringing the parking tax penalty in line with penalties assessed for other City taxes.
FINANCIAL IMPACT
The following projected revenues are based on 2017 tax revenues collected at the 5% rate.
Projected Annual Commercial Parking Tax Revenue
2017 Actuals January 2019, 8% 2020, 11% 2021, 15%
� 214,493 $ 343.189 $ 471,885 $ 643.479
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INFORMATIONAL MEMO
Page 2
RECOMMENDATION
The City Council is being asked to approve the parking tax ordinance and fee resolution and
consider these items at the July 23, 2018 Committee of the Whole meeting and subsequent
August 6, 2018 Regular Meeting.
ATTACHMENTS
A. Comparison of Cities Levying Commercial Parking Tax
B. Comparison of Tukwila Taxes and Late Fees
C. Draft Ordinance Repealing Ordinance 1852 and re-enacting TMC Chapter 3.48
D. Resolution Adding Appeal Fee
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ATTACHMENT A
Comparison of Cities Levying Commercial Parking Tax
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A - City Comparison 2018
C:\Users\laura-c\OneDrive - City of Tukwila\Parking Tax\Commercial Parking Tax -City Comparison
Penalty for Late Payment
Each muncipality may
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10% per month I
<30 days = 10%
31-60 days = 15%
>61 days = 20%
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5% - 29% (varies according to
RCW 82.32.090)
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A - City Comparison 2018
C:\Users\laura-c\OneDrive - City of Tukwila\Parking Tax\Commercial Parking Tax -City Comparison
ATTACHMENT B
4
Comparison of Tukwila Taxes & Late Fees
Late Fee Amount
10% per month
10% per month
roc
10% per month
10% per month
1% interest per
month from time of
sale until date of
payment
1% interest per
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sale until date of
payment
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Assessed After
15 days late
1 day late
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15 days late
15 days late
1 day late
1 day late
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On or before last day of
month following quarter in
which tax was collected
On or before last day of
month following month in
which tax was collected
On or before last day of
month following month in
which tax was collected
On or before last day of
month following month in
which tax was collected
On or before last day of
month following month in
which tax was collected
Within 30 days of sale
Within 30 days of sale
Collection
Period
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GAMBLING TAX
ADMISSIONS &
ENTERTAINMENT TAX
COMMERCIAL
PARKING TAX
UTILITY TAX
(electric. gas, telephone, or
cable tv)
SOLID WASTE UTILITY
TAX
REET #1
REET #2
B - Comparison Tuk Taxes & Fees
C:\Users\laura-c\OneDrive - City of Tukwila\Parking Tax\Commercial Parking Tax -City Comparison
T
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, REPEALING ORDINANCE NO.
1852; REENACTING TUKWILA MUNICIPAL CODE CHAPTER
348, "COMMERCIAL PARKING TAX," RELATING TO THE
LOCAL OPTION TRANSPORTATION TAX TO INCREASE THE
TAX RATE AND ADOPT A PENALTY FOR LATE PAYMENT;
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN
EFFECTIVE DATE.
WHEREAS, pursuant to RCW 82.80.030, the City of Tukwila is authorized to fix and
impose a parking tax on all persons engaged in a commercial parking business within its
respective jurisdiction; and
WHEREAS, in 1998 the Tukwila City Council adopted Ordinance No. 1852, pursuant
to RCW 82.80.030, to levy a 5% parking tax on all commercial parking businesses within
the City; and
WHEREAS, the City Council has determined that a rate increase is warranted as the
City has a substantial need to increase tax revenue in order to discharge the expected
expenses and obligations of the City, and based on review of neighboring cities' tax rates,
and noting that the current tax rate has not been altered since its adoption 20 years ago;
and
WHEREAS, in addition to a rate increase, the Council desires the adoption of a
penalty for late payment, as the timely payment of the tax is difficult to enforce absent a
late penalty and nearly 50% of parking taxes in 2016 were remitted to the City after the
due date, and it is standard practice for City taxes to include a penalty for late payment in
order to provide stability for the City's budgeting purposes; and
WHEREAS, the City held a duly noticed public hearing on this tax increase on
November 27, 2017;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
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Section 1. Repealer. Ordinance No. 1852, as codified at Tukwila Municipal Code
Chapter 3.48, is hereby repealed in its entirety.
Section 2. TMC Chapter 3.48 Reenacted. Tukwila Municipal Code (TMC) Chapter
3.48 is hereby reenacted to read as follows:
CHAPTER 3.48
COMMERCIAL PARKING TAX
Sections:
3.48.010 Definitions
3.48.020 Exemptions
3.48.030 Local Option Transportation Tax Imposed
3.48.040 Tax in Addition to Other License Fees or Taxes
3.48.050 Exempt Vehicles
3.48.060 Taxes Collected by Business Operators
3.48.070 Late Penalty
3.48.080 Use of Fund
3.48.090 Application Liability and Reporting
3.48.100 Violation/Penalty
3.48.110 Appeal Procedure
Section 3. TMC Section 3.48.010 is hereby reenacted to read as follows:
3.48.010 Definitions
The following definitions shall apply throughout this chapter:
1. "Commercial parking business" means the ownership, lease, operation or
management of a commercial parking lot in which fees are charged for parking.
2. "Commercial parking" means any transaction or arrangement whereby a
vehicle is parked and a fee is charged for parking or allowing the vehicle to be parked.
Commercial parking shall include instances where a fee is charged specifically
for the parking of a vehicle. This shall include any business which uses part or all of its
area to park vehicles for a fee where no other service, lodging or business is being
provided or conducted in conjunction with the parking of the vehicle.
Commercial parking shall also include instances such as when a guest of a hotel,
motel or other lodging establishment is allowed to park or leave his/her vehicle before or
after his or her lodging or business stay there so that, for a fee, the guest's vehicle is
parked at the hotel, motel or other lodging establishment during days when the guest is
no longer staying there.
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Section 4. TMC Section 3.48.020 is hereby reenacted to read as follows:
3.48.020 Exemptions
The following exemptions to the commercial parking tax are allowed:
1. Local employee parking, with parking spaces provided or reserved for use
by an employee who works within the City, where the employee parks his or her vehicle
in connection with his or her employment, without regard to whether arrangements or
payment for the parking is made by the employee or by his or her employer.
2. Apartments and condominiums, where parking is provided in conjunction
with arrangements for residential living spaces.
3. Offices, retail establishments, warehouses and industrial buildings,
where parking is provided in association with tenant arrangements for the use of such
facilities.
Section 5. TMC Section 3.48.030 is hereby reenacted to read as follows:
3.48.030 Local Option Transportation Tax Imposed
There is hereby levied a special local option transportation tax to be imposed in
connection with commercial parking businesses within the City. The tax shall be imposed
at the rate of 6 8% of the gross revenues generated by non-exempt commercial parking
charges and fees effective January 1, 2019, and then as follows:
January 1. 2020: 11% of the gross revenues generated by non-exempt commercial
parking charges and fees
January 1, 2021: 15% of the gross revenues generated by non-exempt commercial
parking charges and fees
Section 6. TMC Section 3.48.040 is hereby reenacted to read as follows:
3.48.040 Tax in Addition to Other License Fees or Taxes
The tax levied under this chapter shall be in addition to any license fee or tax imposed
or levied under any law, statute or ordinance whether imposed or levied by the City, State
or other governmental entity or political subdivision.
Section 7. TMC Section 3.48.050 is hereby reenacted to read as follows:
3.48.050 Exempt Vehicles
The tax shall not be levied on vehicles with official State disabled person decals,
government vehicles which are exempt from tax, and tax-exempt carpool vehicles.
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Section 8. TMC Section 3.48.060 is hereby reenacted to read as follows:
3.48.060 Taxes Collected by Business Operators
Taxes imposed herein shall be collected by the operators of the commercial parking
businesses, and shall be due and payable to the City in monthly installments. The
operators of the commercial parking businesses shall remit to the City the local option
transportation taxes collected on or before the last day of the month following the month
during which the taxes were collected. The City shall be authorized to review and inspect
financial records involving activities of businesses which are taxable by this tax, at least
quarterly each year.
Section 9. TMC Section 3.48.070 is hereby established to read as follows:
3.48.070 Late Penalty
If a Commercial Parking Business subject to this tax fails to pay any tax required by
this chapter within 15 days after the due date thereof, there shall be added to such tax a
penalty of 10% of the tax per month for each month overdue, which shall be added to the
amount of the tax due.
Section 10. TMC Section 3.48.080 is hereby reenacted to read as follows:
3.48.978080 Use of Fund
All revenues, assessments and other charges generated and collected as local option
transportation taxes shall be placed in the City's 104 Bridge and Arterial Street Fund, to
be used for transportation purposes within the Transportation Element of the Tukwila
Comprehensive Transportation Plan, in accordance with RCW 82.80.070; and to be used
for administration of the tax, including those activities of the City in keeping and tracking
records, financial reports and other documents, reviewing filings and compiling reports by
commercial parking businesses, and other activities involved in collection and
enforcement of the tax.
Section 11. TMC Section 3.48.090 is hereby reenacted to read as follows:
3.48.988090 Appl-ication-and--Liability and Reporting
without a fee.
of such tax.
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A. All officers, directors and managers of any organization or association operating
a Commercial Parking Business, including owners and lessees of a parking facility used
for Commercial Parking, shall be jointly and severally liable for the payment of said tax,
penalties, and any fine imposed under this chapter
GB. The Finance Director shall have the power to adopt rules and regulations not
inconsistent with the terms of this chapter for carrying out and enforcing the payment,
collection and remittance of the tax herein levied; and a copy of the rules and regulations
shall be on file and available for public examination in the City Clerk's officeCity of Tukwila
Finance Department.
Section 12. TMC Section 3.48.100 is hereby reenacted to read as follows:
3.48.00100 Violation/Penalty
It is unlawful for any person, firm or corporation engaged in a CGommercial laParking
bBusiness to fail or refuse to collect and remit parking taxes as required by the provisions
of this chapter or to gain for himself or herself some advantage or benefit from the tax,
whether direct or indirect. Any such violation shall constitute a misdemeanor and shall
be punishable by a fine not to exceed $1,000 and/or by imprisonment not exceeding 90
days. Any such fine shall be in addition to any tax and penalties required.
Section 13. TMC Section 3.48.110 is hereby established to read as follows:
3.48.4-00110 Appeal Procedure
A. Any person aggrieved by the amount calculation of the tax determined to be due
to the City pursuant to this chapter may appeal to the Finance Director or his/her designee
from such determination by filing a written notice of appeal with the City Clerk within 20
calendar days from the date on which such person was given notice of the tax. The notice
of appeal must state the grounds for appeal, including a detailed explanation of why the
amount of the tax was incorrect. The Finance Director or designee shall, as soon as
practicable, fix a time and jabee far the hearing for s-uch appeal. Notice of the hearing
and the app al .)21 -all he given to the appellant by certified mail at least five days prior to
the date of the hearing review the basis for the appeal, and may request clarification from
the appellant. After the review is complete, the Finance Director or designee shall issue
an administrative decision that may sustain or modify the amount of tax owed. Notice of
the administrative decision shall be sent to the appellant by certified mail within 10 days
of issuance.
B. The appellant, if aggrieved by the decision of the Finance Director or designee,
may then appeal to the City Hearing Examiner within 20 calendar days of the date of -the
administrative decision is mailed to the appellant. The notice of appeal must state the
grounds for appeal, including a detailed explanation of why the administrative decision is
incorrect. The notice of appeal must be accompanied by an Appeal Fee in accordance
with the fee schedule adopted by resolution of the City Council.
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C. Upon timely filing of a notice of appeal, the Finance Director shall schedule a
hearing on the appeal before the City's Hearing Examiner. The hearing shall be
conducted no later than 30 days from the date of the notice of appeal, unless an extension
is agreed to by the appellant or otherwise ordered by the Hearing Examiner for good
cause shown. Notice of the hearing and the appeal shall be given to the appellant by
certified mail at least five days prior to the date of the hearing.
D. The hearing shall be governed by the City of Tukwila Hearing Examiner's
procedural rules. The hearing shall be de novo. The decision of the City's Hearing
Examiner or other hearing body shall be based upon a preponderance of the evidence. The
burden of proof shall be on the appellant. The Hearing Examiner or other hearing body
may affirm, reverse or modify the Finance Director's decision.
E. Within 20 business days, excluding holidays recognized by the City of Tukwila,
from the date of the hearing on an appeal under this section, the Hearing Examiner shall
issue a written decision which shall set forth the reasons therefor.
Section 14. 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.
Section 15. 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 16. 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 , 2018.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Allan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, ADOPTING A FEE SCHEDULE FOR TUKWILA
MUNICIPAL CODE CHAPTER 3.48, "COMMERCIAL PARKING TAX."
WHEREAS, the City Council intends to remove specific amounts for fees and
charges from the Tukwila Municipal Code in favor of a City-wide fee resolution; and
WHEREAS, the updated commercial parking tax ordinance references an appeal
process, including an appeal fee, which will be included as part of the City-wide fee
resolution;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Fee Schedule. The following fee shall be charged to appellants by the City of
Tukwila Finance Department to appeal a commercial parking tax decision:
Type of appeal
Fee
Hearing Examiner Appeal Fee
TMC 3.48.110
$250.00
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of , 2018.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk Verna Seal, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Rachel B. Turpin, City Attorney
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