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Home My WebLink AboutFIN 2019-04-22 Item 2C - Discussion - Update on Transition of Business Licensing to the StateCity of Tukwila J'r 4d, INFOR ATIONAL E ORANDU TO: FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: April 17, 2019 SUBJECT: Update on transitioning business licensing to the State ISSUE Update the Finance Committee on transitioning the business licensing function to the State. Allan Ekberg, Mayor Finance Committee BACKGROUND Engrossed House Bill 2005 passed unanimously in 2017. The bill, now codified as Chapter 35.90 RCW, requires any city with a general business license, to partner with a combined licensing service. At the November 9, 2018 Regular Meeting, Council authorized the Mayor to sign an interlocal agreement with the State of Washington Department of Revenue for business licensing services. The purpose of the agreement was to establish the terms under which Revenue's BLS work unit would act as the City's agent for the purpose of collecting, processing and disbursing information, licenses and fees related to the City's general business license activities. The City retains all power and authority over its business licensing and other regulatory activities except as expressly delegated in this agreement. The date for transition was set for March 28, 2019 DISCUSSION A communications plan announcing the change was prepared and implemented prior to the transition. Outreach to the business community included the following: • Postcard mailed to all Tukwila businesses • Letter mailed to all Tukwila businesses •Website updated with information about the transition *Posts on social media *Outreach to the Chamber *Article in E-Hazelnut In addition to outreach to the business community, Finance also installed a kiosk at the front counter that will allow businesses to access the State site and apply and/or renew their business license while still onsite. The kiosk can also be used to pay a utility bill. Additional features, including the ability to apply for a job, will be added in the future. As mentioned above, the transition occurred on March 28, 2019. Training on the new system occurred the week of, and the week after transition. 9 INFORMATIONAL MEMO Page 2 The City benefits from this partnership iDseveral ways. Staff resources can beallocated from the renewal and fee collection function tQauditing licensing data. Staff will also have access to more data oneach business licensed in the City 'including: wState licenses compared toTukwila licenses • Other endorsements * Location codes for sales tax reporting * Revenue * Monitored alarms As nanev«a| time for business licenses approaches in the fall, the City will again reach out to our business community with information on renewing with the State. RECOMMENDATION Information Only. ATTACHMENTS Postcard mailed toall Tukwila businesses 10 Please take note: Important information about your Tukwila business license In accordance with a new state bv4 the Washing- ton DepartrnentofRevenue'sBusinessLicensing Service (BLS) wit[ handle processing ofall City nfTukwila busi- ness |icensesandrenevvais'efhecUveMarch28,2UI9. Registering with the City ofTukwila through the Business Licensing Service - Our partnership with BLS will allow you "one'stopshopping" when maintaining orrenewing many of your state and City licenses. New orexpanding businesses will beable toapply for their City license on[ nealong with other state and local licenses that partner with BLS. kWhutdo/hovetodo? Nothing right now, ifyouhave an existing business license. About six weeks before your current license expiration date, BLS will send you a license nznevva( letter with instructions on how to renew your City ofTukwila business license. You may use E'checkorcredit card tomake payment for online transactions. Prefer torenew your license bymail using the BLS renewal form? Please dosoinplenty nftime toreach BLS before the expiration date, and include acheck made out 1oDORfor the appropriate amount. A[ate filing fee wit( beassessed for renewals received after the expiration date. CITY OFT0KWILA 62003ouUhcenterBoulevard Tukwila, WA 98188 Doing business in Tukwila? A change is coming to ho0/you 'it renew your business license! Please read important information on other side What /f/don't have obusiness license/ |fyouare operating abusiness inthe City ofTukwila without a license, you are required toapply for one. Until March l5'2Ol9'this must bedone inperson bycoming tnCity Hall at620OSouthcenterBoulevard. Businesses found operating without alicense are charged additional fees and penalties. Nhotfees will/ have topay? For renewals, you will still pay the City ofTukwila license fee, which isbased on your part-time and full-time employee count. There will be a minimal processi-n5fee assessed by the DORto help cover BLS processing costs, aswelt asthe printing and mailing ofrenewals and licenses. Duyou have questions? For more information about this new process, visit the BLS websiteatBLS.DOR.VVA.gov orcall BLS atI'80O'45I'79O5. You can also contact the City ofTukwila for additional information by calling 2U6'433I83Soremai(ingFinance@Tukm/i\aVVA.gov. Finance staff members are available atCity Hall tm assist with navigating the BLS vvebsiteifneeded. PR5RTS0 U.S. Postage PAID Olympic Mailing Services 11 12 Allan Ekberg, Mayor Finance Department Peggy McCarthy, Director — Dear Tukwila Business: TheCitynfTukv«laconstantlystrivestpmaintoinacompetitiveemvirnnmentinwhichourbusinessescanoperate. We work hard to balance the City's revenue needs with the ability of business to compete in the local, regional and _global economy. This letter is to inform you that starting in 2019 the City will be raising the business license fees. The decision to raise these fees came after significant public outreach and discussion with the City Council. The City met with dozens of businesses, provided notice toall business operating in the City, conducted a public open house, and solicited public testimony atmultiple City Council meetings. |nresponse tppublic input, the City decided tophase in the fee increase over two years. The table below shows the two-step fee schedule. BUSINESS LICENSE FEE 2018 2019 202 _ Per full-time employee _ '� Per part-time employee Prior toenacting the business license fee increase, the City reduced its expenditures for supplies and services by 3Y6in2018. In addition, budgeted supply and service expenditures for 2019-2020 were reduced by an additional 396for all City departments, except for Police and Fire which were reduced byl.Sy6. The business license fee increase plus our spending reductions allow the City to retain essential public services. More than 6096 of the [1ty'sGenera| Fund goes to Public Safety. The City has traditionally relied on sales tax for a significant source nfits revenue. However, due to changing buying patterns, the City has started tosee sales tax growth flatten. Additionally, several years ago the State of Washington changed the method in how sales tax is distributed to jurisdictions ("Stveano|inedSales Tax''). In the past, sales tax revenue was awarded based on the where the sales transaction occurred. Now the tax revenues are awarded based on where the customer takes delivery. This change resulted in the City of Tukwila losing substantial revenues. At the time of the change, the State enacted Streamline Sales Tax mitigation payments for municipalities such as Tukwila that were hard-hit by the change in revenue distribution. However, last session the Legislature voted to end these payments, which will result in a revenue loss to Tukwila nf$1.I million per year starting inZOZ0. The City has limited revenue options and ultimately prioritized retaining a high level ofservice for visitors, residents and guests. VVeappreciate your presence asamember ofour community. |fyou have any questions, please call Cindy Wilkins atZ06'431'36DOoremail [indy.VVi|kins@Tuhwi|aVVA.gov. Tukwila City Hall ^G20qSout6cenferBoulevard ^ Tukwila, WA 98188 ~ 206'433-2800 ^ Nebs/te: 13