HomeMy WebLinkAboutReg 2011-11-07 Item 4E - Ordinance - Combined Business License Fee StructureCOUNCIL AGENDA SYNOPSIS
Meefhi g Date
10/24/11
11/07/11
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Prepared by Mayor's review
JFS
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Council review
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ITEM NO.
4.E.
ITEM INFORMATION
CAS NUNIBF.R: STAFF SPONSOR: JENNIFER F SANTA INES 10/24/11
A(;P "NDA ITr." Trrr,r; An ordinance establishing a Combined Business License Fee of $67.00 per full -time
equivalent (FTE) employee
C \'1v( ;OItY Discussion Motion Resolution Ordinance .Bid Award Public.Hearzng ❑Other
Dltg Date 10124111 jA41S Date Pltg Date Altg Date 11/07/11 tl7tg Date tlZtg Date Mtg Date
SP( )NSOR Council Mayor HR DCD Finance .Fire IT P &R Police PW
SPONSOR'S A combined business license and RGRL Fee is a simplified fee structure that is easier to
SUMMARY understand and will facilitate the completion of renewal and application forms with one
fee calculation. This proposal is revenue neutral to the City.
RI I1 'I ,1) B1' cow Mtg. CA &P Cmte F &S Cmte 'Transportation Cmte
Utilities Cmte Arts Comm. Parks Comm. Planning Comm.
DATE: 10/18/11 COMMITTEE CI-1AIR: HOUGARDY
RECOMMENDATIONS:
SPONSOR /ADMIN. Finance Department
Ccmr\41171" Unanimous Approval; Forward to Committee of the Whole
COST IMPACT FUND SOURCE
Exi+,NDJTURV Rl AMOUNT BUDGETED APPROPRIATION REQUIRED
$0
Fund Source:
COmrnents: This proposal is revenue neutral for the City.
I MTG. DATEI RECORD OF COUNCIL ACTION
10/24/11 Forward to next Reqular Meetinq
MTG. DATE I ATTACHMENTS
10/24/11 I Informational Memorandum dated 10/19/11 (revised after FS meeting)
Informational Memorandum dated 10/1/11
Business License and RGRL Fee Analysis Spreadsheet
Summary of Community Responses
Draft Ordinance
Draft copies of business licensing forms
Minutes from the Finance and Safety Committee meeting of 10/18/11
11/07/11 Ordinance in final form
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ulty Of i t I
a: Y o t
Ordinance No.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, AMENDING ORDINANCE NOS. 2333 AND 2315, AS
CODIFIED IN TUKWILA MUNICIPAL CODE (TMC) CHAPTER 5.04,
"LICENSES GENERALLY," TO REVISE AND MOVE PARTS OF TMC
CHAPTER 5.62 INTO CHAPTER 5.04 TO CREATE A SIMPLIFIED
COMBINED BUSINESS LICENSE FEE STRUCTURE, AND TO EXEMPT
QUALIFIED COURT INTERPRETERS FROM THE COMBINED
BUSINESS LICENSE FEE; REPEALING ORDINANCE NO. 2297 AND
ORDINANCE NO. 2333 §10, §11 AND §12, THEREBY ELIMINATING
TMC CHAPTER 5.62; PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the City Council desires to simplify the business license fee structure
to eliminate the need to calculate two different fees; and
WHEREAS, the City Council supports a combined business license fee to facilitate
the completion and processing of business license applications and renewals; and
WHEREAS, the current business license ordinances separate the business license
section and the Revenue Generating Regulatory License section into two different
chapters and they should now be combined within TMC Chapter 5.04; and
WHEREAS, the City Council desires to exempt qualified court interpreters from
both the business license fee and the Revenue Generating Regulatory License (RGRL)
fee;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 5.04.010, "Definitions," Amended. Ordinance Nos.
2333 §1 and 2315 §1 (part), as codified at TMC Section 5.04.010, are hereby amended
to add the following definitions:
10. "Full time equivalent (FTE)" is a unit of measure equivalent to one employee
working full -time. An FTE equals the number of hours worked by an employee in a
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calendar year divided by 1,920 (the work hour figure used by the Washington
Department of Labor and Industries), not to exceed one.
11. "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 who is on the business's payroll, and includes all full -time,
part-time, and temporary employees or workers; and
b. Self- employed persons, sole proprietors, owners, officers, managers,
and partners; and
c. 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
Section 2. TMC Section 5.04.020, "Application and Fees Required," Amended.
Ordinance Nos. 2333 §3 and 2315 §1 (part), as codified at TMC Section 5.04.020, are
hereby amended to read as follows:
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 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 chapter 5.06.
B. Fee General. The application must be accompanied by payment for the
amount of the license fee. The license fee for the annual license issued under this
chapter shall be $67.00 per full -time equivalent (FTE) employee, consisting of a $12.00
per FTE business license fee plus a $55.00 per FTE Revenue Generating Regulatory
License (RGRL) fee. The annual license fee shall be calculated by multiplying the
number of full -time equivalent employees that worked in Tukwila during the previous
calendar year by the license fee. For owners of residential rental properties, the annual
license fee shall be calculated by multiplying the number of full -time equivalent
employees that worked in Tukwila during the previous calendar year by the RGRL fee;
the annual fee shall include a license fee as set forth in TMC Chapter 5.06. It will be the
responsibility of the business or residential rental property owner to determine the total
number of FTE employees and, if required, demonstrate -to the satisfaction of the
Finance Director or his /her designee that the calculation is accurate. Employers without
a full year of operating history shall estimate the number of FTE employees that will be
employed in a 12 -month period.
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C. Minimum Fee. There shall be a minimum fee for an annual license of $67.00,
consisting of a $12.00 business license fee and a $55.00 RGRL fee, except if the
business qualifies for a temporary business license in accordance with TMC Section
5.04.010 or is an entity defined in TMC Section 5.04.090.
1. A business with less than $12,000.00 of annual gross receipts shall pay the
minimum license fee. A residential rental property with less than $12,000.00 of annual
gross receipts shall be exempt from the RGRL fee, but shall be subject to the license
fee requirements set forth in TMC Section 5.06.040.
2. An entity engaging in some activities or functions that are exempt from the
combined business license fee and some that are not exempt shall pay a license fee
based on the number of full -time equivalent employees involved in the functions or
activities that are not exempt.
3. An individual person operating more than one business as sole
proprietorship or owning more than one residential rental property within the corporate
limits of the City shall pay only one RGRL fee, at an amount equal to the highest RGRL
fee for any one of the multiple businesses, if not otherwise exempt from paying the
license fee pursuant to this chapter. TMC Section 5.04.020.C.3 shall not apply if any
one of the businesses or properties owned by the sole proprietor has three or more full
time equivalent employees.
4. If a business has more than one location in Tukwila, the license fee
calculation shall include at least the minimum fee for each location.
5. The license fee for a business required to be licensed under this chapter
and not located within the City's corporate limits shall be calculated by multiplying the
license fee by the number of FTE employees working within the City, but in no event
shall the license fee be less than the minimum license fee set forth in this chapter. If the
number of FTE employees is not known at the time of renewal, the business shall
estimate the maximum number of FTE employees they anticipate working in Tukwila for
the 12 -month period subject to licensure.
6. Businesses doing business in the City that have no employees physically
working within the City shall pay the minimum fee required under this chapter.
7. Businesses employing fewer than 10 employees and that are eligible for a
temporary business license, pursuant to TMC Section 5.04.010, shall be exempt from
payment of a license fee.
D. New Businesses. The license fee for a new business shall be based on the
estimated number of FTE employees that will work in Tukwila for a 12 -month period. If,
during the license year, the City determines the actual number of employees is
significantly different than estimated, the amount of the license fee will be recalculated
for the new business. If the revised annual license fee is higher, the business must pay
the difference within thirty days after notification is sent by the City.
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E. Over- Reporting Number of Employees. A business may request that the
City refund the license fee overpaid on the basis that the business miscounted the
number of FTE employees by an error factor of more than 15 The request must be in
writing 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 licensee paid an excess business license fee, the City will refund the
excess license fee paid by the licensee.
F. Under- Reporting of Employees. If the City determines the number of
employees was under reported at the time of application or renewal by an error factor of
more than 15 the business shall pay the balance of the applicable license fee
together with a penalty of 20% of such balance due. The business shall also reimburse
the City for any accounting, legal, or administrative expenses incurred by the City in
determining the under reporting or in collecting the additional amounts. The Finance
Director shall mail written notice of the amount to be paid and the business shall pay
said amount to the City within 30 days of the date written notice is mailed by the City. If
the City does not receive timely payment, an additional penalty shall be added, applying
the schedule for late payments in this chapter.
G. Payment by Draft or Check. Payment made by draft or check shall not be
deemed a payment of the 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 fee unless and until the check or draft is honored.
Any person who submits a 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.
Section 3. TMC Section 5.04.040, "Prorating fee," Amended. Ordinance Nos.
2333 §4 and 2315 §1 (part), as codified at TMC Section 5.04.040, are hereby amended
to read as follows:
The license fee set forth in this chapter shall be for the calendar year, and each
person engaged in business must pay the full license fee for the current year. License
fees are non refundable, regardless of whether the business operates for the entire
calendar year, or whether the business license is denied, revoked, withdrawn or
suspended with cause.
Section 4. TMC Section 5.04.050, "Fee for late acquisition or renewal,"
Amended. Ordinance Nos. 2333 §5 and 2315 §1 (part), as codified at TMC Section
5.04.050, are hereby amended to read as follows:
A. Monetary Penalty. Failure to pay the license fee within 30 days after the day
on which it is due and payable pursuant to TMC Section 5.04.020 shall render the
business subject to a penalty of 5% of the amount of license fee for the first month of
the delinquency and an additional penalty of 5% for each succeeding month of
delinquency, but not exceeding a total penalty of 25% of the amount of such license fee,
plus any accounting, legal or administrative expenses incurred by the City. No business
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license for the current period shall be granted until the 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 Director or his /her designee determines that the late
payment was the result of excusable neglect or extreme hardship.
B. Collection. 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 any payment of any license fee hereunder, or who shall fail to comply with any of the
provisions of this chapter. Notice of such revocation shall be mailed to the license
holder by the Finance Director, and on and after the date thereof any such business 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 of not less than $50.00 to reinstate any business
license revoked through nonpayment of the business license fee.
Section 5. TMC Section 5.04.070, "Change in nature of business," Amended.
Ordinance Nos. 2333 §6 and 2315 §1 (part), as codified at TMC Section 5.04.070, are
hereby amended to read as follows:
The license granted in pursuance hereof shall be used to conduct the business or
type of business at the designated address for which such license is issued. Any
change in the nature of the business, a change in the Unified Business Identifier issued
by the Washington State Department of Licensing, a change in the physical location of
the business, or a change in ownership of the business shall necessitate a renewed
application to the Finance Department. A change in the nature of business or a change
in ownership will also require payment of the applicable license fee.
Section 6. TMC Section 5.04.090, "Exemption," Amended. Ordinance Nos.
2333 §7 and 2315 §1 (part), as codified at TMC Section 5.04.090, are hereby amended
to read as follows:
A. Exemptions. The following entities may claim an exemption from the
combined business license fee, but if exempt under this subsection such entities shall
still register under this chapter:
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.
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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 7. Repealer. Ordinance Nos. 2297 and 2333 §10, §11 and §12, as
codified in TMC Chapter 5.62, are hereby repealed, thereby eliminating TMC Chapter
5.62.
Section 8. 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 9. 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.
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Section 10. 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 2011.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, CMC, City Clerk
APPROVED AS TO FORM BY:
Shelley M. Kerslake, City Attorney
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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