HomeMy WebLinkAboutORD 5861 CITY OF RENTON, WASHINGTON
ORDINANCE NO. 5861
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AMENDING
SUBSECTIONS 5-5-2.Y, 5-5-3.A, 5-5-3.C,5-5-3.E, 5-5-3.G.2,5-25-4.D, 5-25-10.K, 5-
25-10.Z, 5-25-11.C, 5-25-11.D, 5-26-3.E, 5-26-6.A, 5-26-6.D,AND 5-26-7.F OF THE
RENTON MUNICIPAL CODE TO MOVE ALL BUSINESSES TO A CALENDAR YEAR
REPORTING PERIOD FOR BUSINESS LICENSE PURPOSES WITH A JANUARY 31 DUE
DATE; CLARIFYING POTENTIALLY AMBIGUOUS LANGUAGE TO ENSURE
CONSISTENT APPLICATION OF EXISTING BUSINE55 AND OPERATIONS TAX AND
BUSINESS LICENSE REGULATIONS; AND PROVIDING FOR SEVERABILITY AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, in 2016, the City implemented a Business & Occupation (B&O) Tax, which is
remitted either on a quarterly or annual basis, administered in conjunction with business license
renewals; and
WHEREAS, currently the City has four different due dates in which a business would be
required to renew a business license and pay B&O taxes. The tax reporting period for each due
date is the preceding four quarters for annual filers. The due date corresponds to the same
quarter in which the business had originally applied for a business license; and
WHEREAS, the multiple due dates has made it confusing for many businesses. In most
cases, the reporting period does not line up with their own fiscal reporting period or, if they have
multiple licenses, they may have multiple due dates; and
WHEREAS, many businesses have voiced frustrations as they do not understand the
methodology of the multiple due dates. There have been numerous errors or corrections made
for taxes remitted when a business has filed too early, returns completed for the incorrect
reporting period or late fees and penalties incurred because the due date was not clear; and
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ORDINANCE N0. 5861
WHEREAS, by changing the renewal date and reporting date for all businesses to a
calendar year basis due January 31 of each year will help clear up confusion and streamline the
process; and
WHEREAS, in addition to the renewal and reporting date, RMC provisions are confusing
regarding the maximum tax a large business is responsible to pay each year; and
WHEREAS, currently RMC 5-25-4 states there will be a cap placed on taxable gross
revenues not to exceed $5 billion.The wording on gross revenues is not clear as businesses could
be reporting in multiple tax categories and, therefore, could interpret this code provision to be a
maximum of gross revenues of$5 billion in each category or in total; and
WHEREAS, the City interprets RMC 5-25-4 to read that business are required to pay no
more than $4.25 million in taxes for any calendar year, adjusted annually for inflation, regardless
of the number of categories the business operates in; and
WHEREAS, clarifying RMC 5-25-4 to expressly state that$4.25 million is the maximum tax
cap will alleviate future confusion over the intent of the maximum tax due to any one business
in a calendar year;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO
ORDAIN AS FOLLOWS:
SECTION I. Subsection 5-5-2.Y of the Renton Municipal Code is amended as follows:
Y. REPORTING PERIOD: �he fear�^�f�ITsalendu���ar�e�s, vv�c�
The calendar year (Januarv 1 throu�h December 31) that precedes the vear for
which the business is applvin�for a license.
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ORDINANCE N0. 5861
SECTION II. Subsection 5-5-3.A of the Renton Municipal Code is amended as follows:
A. General Business License Required: No person shall en�a�e in Business
unless such Business is authorized bv a valid Citv of Renton general business
license. €ver�r—��►3iness en�er�r+se i�c'"�—����I+r��e� �e—�ease;,�',
+.,.,,..,.,.-�.-., .,,-+-.l,l.,.-.,I„� h����r.,�.-.,.- .-4.-,II F�.�+.,4,+.,�., F.-.,..-.+4..,r�+.,..F o„r+,.�
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a-general basines3 I�se�se. The general business license shall not be transferable.
A separate business license is required for each Business Enterprise.
SECTION III. Subsection 5-5-3.0 of the Renton Municipal Code is amended as follows:
C. License Fee:The general business license fee shall consist of two (2) parts,
a fixed registration fee and a variable per employee fee,which shall be determined
by the number of worker-hours in the City of Renton during the reporting period.
1. License Registration Fee: The Business License Registration fee of one
hundred fifty dollars ($150.00) shall be due and payable when filing a completed
registration form as prescribed by the Administrator. The Registration Fee may be
adjusted from time to time, as published in the city's current Fee Schedule
brochure. If a business's first date of en�a�in� in business in the Citv is after Julv
1, a prorated half vear license re�istration fee will be due in the amount of
seventv-five dollars ($75).
2. Per Employee Fee: Effective January 1, 2015, in addition to the
Registration Fee described in subsection C.1 above, a per employee license fee
shall be calculated by multiplying the actual number of hours worked during the
reporting period by $0.0352 per hour. Businesses with fewer than one thousand
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ORDINANCE N0. 5861
two hundred (1,200) worker-hours in a year ^� *"-^^ ""^��^� I�nn� h,,,,.� ;., .,
�e�-shall be exempt from paying the per employee fee described in this
subsection. The-re�er�in �^� {^� ^ , ",���^^«^< <",�� "^ ^ ,�*^��., ^
"^{^�^ ''"^ ^ ,�*^�'„ � ^�+;^^ �'��^ �',+^�. gusinesses with tax liabilitv under RMC
Chapter 5-25 are not required to pay the per emplovee fee imposed in this
chapter.
3. The per hour rate shall be administratively adjusted every other year
by the percentage rise or fall of the Seattle-Tacoma-Bremerton Consumer Price
Index, All Items, Urban Wage Earners and Clerical Workers (also known as CPI-W)
ending August 31, for the same two (2) year period and published in the City's
current Fee Schedule brochure.
Each business license holder may be required, by the Administrator,to file
with the City of Renton, copies of its quarterly reports to the State Department of
Labor and Industries reporting emp�oyee hours worked. The businesses that did
not file the report may be required to file an affidavit with the City reporting hours
worked or the equivalent number of employees.
4. Due Dates: Annual business registration and per employee fees are
due by the last day of January {^ "� ��«�� ,;*" �,+^ .,"��" {,��
wi�h i n �h e fe�r�#� EaTe��q���e�-��t�#��c�a��^������s++�sses��#
�„n;,,o �-,�a + �•,.� c.,�� •+�•� �he firs� salen�ar�aarz�r e#��I�e=Tea�, '��,-��
a�ii��vcivai aa'ccTvv��ic�� �a�i vvic��i��
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ORDINANCE N0. 5861
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.- �,,.- t,,,�;�,,.-.-� •+►, � .� +� ti• N f ii •+N•
+M�+l�7rrl �-�I�niJ�.-n��-..-*�.-�F+l�� ..n-.
�e� �he�e �N�ir�es3e�re�ire� �e re�er� q�ar�erl , ' ��'+• ' + +"
,' �^oi��ra�ien fee�ltEe as �e�eribed abeve, *"^ ^^ � { ^ � �
, , .
5. Reporting Periods: Per Employee business license fees are calculated
#e�-based upon hours worked in the R�eporting P�eriod. T"^ ^^'^�;^;�*��*^- �",��
h-,. „ +ti„ a���.-„+c,,., +„ ,J„��.,.,�+„ -, 1,��.-�.,o � +• .J ��
�aa��ra��a�e� c�n variea3 #as�ers, ar�er�se�her�, �k��,,,�er�-e�r��ee3
�,�/,,,- �„-.�,,,,.,i .,.,+�, .,�+H„ ti����.,,,��
+• • ,� f +t,,,.-„ o„��c.-�,�*„�•i„ ii„ ti-,ii ti +�„
a. T e r�or��r��sr�aa,o; �,.�����.,rR, ���,�,,,��,���,�.
f.,��.- In1 � .�,1.,+., .--,I.,.,.J-..- ., .,.+�,.� ., .,.J7.,.,+h�, .J��., .J..+.,
+' ' .J �' +6, ' �„J + �'1 +., I h I I h
. Th e r e�v i c i i iSp c i i v a i vT crn=r.`�ic�cquir'ca cv '�rrE'-'�q'cr'crrccny-�nirm-vc
tho r�lor�rl�r n -�rf�r .� �rlinn � �1� r. �..-+nrl�i rl��.� iJ-.+�
6. Expiration: Unless otherwise established by the Administrator,
business licenses expire on Januarv 31 of the vear after issuance and must be
renewed bv the -, .,� �.,�,.,,,�� . ;..+.-.,�;,,., ;� ,-.�;,��,,.., .. ,,,� „�„„„ ��, „
and 3hall e�F�ire en-�;�. �,�aR�T�;r. due date as described in subsection C.4
above.
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ORDINANCE NO. 5861
7. Location of Business and Employees:
a. Presumption: For purposes of this section, any business operating
within the City limits of the City of Renton shall be deemed to have all of its
employees working within the City limits of the City of Renton.
b. Working Outside City: For any employees whose nominal place of
business is within the City limits of the City of Renton, all hours will be presumed
to be worked within the City and subject to this fee. Any employee regularly
reporting to work within the City limits shall have all of that employee's time
subject to this fee, even if portions of the employee's time are spent outside the
City of Renton (for example, a realtor or outside salesperson). When an employee
normally employed within the City of Renton who, for extended periods of time,
reports to work outside the City of Renton, for example, a contractor's employees
reporting directly to job sites, then the employer may by affidavit report the
number of hours actually worked within the City or the percentage of time within
the City based upon one thousand nine hundred twenty (1,920) hours annually
and pay the annual license fee based upon those figures.
s. ��er�Term er Temperar��iEe�se: ^ +,,.,...,,,r-..-„„;„„+.,ron�„-.� ,�-,
�a�r--lisense rraaTbe�arEh�se�-�s� ' ., �^��,-ST,,�n nnv-vv�j���Eq�-�
ce�u_iv�lonk_mm�loscnn /��CTN�1
�q a � c c���p�vTcc-rr ,�Tor f e r e a s h fe a r h�n��e���e+g�i#-y-E�BA}-�e�lEe�
h.,��.-� a��.��.,+N„ „ „+.,l�n► .--,��n.J-„-.J.,.,.,,,.�.,.J ., .�M,,.J • +l, r•+ � �
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�a�e Af is3aanse. The�emperarT�a�ir�ess-�Ee�se maTenl� �i.�ciTcni,�^cv—vT
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ORDINANCE N0. 5861
e���^�����—:o;��—{���oT—or {e�rer �T€ The lisen��ma��e �e�cew�e + +"e
�nnlir�hlr �Tr ..,+„ F„ • • +, �on1 i,,.,,�-, ,�-, • a + + ,�
�r i �a c c c��i a c �i i i�c cy--r-..rvTcaTcnuar-c:a-��scnvqT�rv�cv c�ccc cv
tw�.hu_ndr_oc�sovon+ /77l11 r.r.r�.�� +'..n .J
� C� Cl11QICQ�GYCIIC�CTZ.TrCC117CRTC10�'Q��S i�enev►�al ferms will ne� be��
th.ar�tar_m-6urin__ntL_li.��,.�c.,.,r Dn.�.,�.�-.I /���
�.,�,�«.,�, pq�111�.J7 ,«�����T�«.��o.o�s m�3� �e at�h��e��es��f IiEer��ee—,�
i-,+„ f,,,,� .,..,a � -,i+,,,.- .,...,i„
8. Any payment not made within one (1) month following the due date
shall be cause for the automatic revocation of the business license.
9. The Administrator shall have the authority to inspect business
premises, and review or audit business records with reasonable prior notice.
10. Non-Profit Exemption: A bona fide non-profit organization organized
under Section 501(c)(3) of the Internal Revenue Code whose income is primarily
from compensation from public entities for health or social welfare services,
grants, and/or donations, shall register and file employment information at least
annually but shall be exempt from paying the registration and the per employee
fee. Primarily shall mean more than fifty percent (50%).
SECTION IV. Subsection 5-5-3.E of the Renton Municipa) Code is amended as follows:
E. Time Within Which to Claim Overpayment of License Fee: Whenever a
business enterprise makes an overpayment, and, within �vve four (�4) years after
date of such overpayment, makes application for a refund or credit of the
overpayment, its claim shall be allowed and be repaid from the general fund or be
applied as a credit to annual renewal fees as approved by the Administrative
Services Administrator.
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ORDINANCE NO. 5861
SECTION V. Subsection 5-5-3.G.2 of the Renton Municipal Code is amended as follows:
2. The penalty for failure to obtain a business license shall not be less
than two hundred and fifty dollars ($250.00) or as prescribed in the City's Fee
Schedule, plus payment of all license fee amounts that should have been paid for
the last t#�ee four (�4) years, as determined by the Administrator, plus a penalty
of twenty percent (20%) per annum for all amounts owing, plus any accounting,
legal or administrative expenses incurred by the City in determining the
unreported, or the unpaid portion over the last ##�ee four (�4) years or in
collecting the tax and/or the penalty.
SECTION VI. Subsection 5-25-4.D of the Renton Municipal Code is amended as follows:
p. �...,,,,..,+� ;., c.,,.,,« �f Annual Tax Cap: �+�The tax imposed under this
chapter shall not�^^'„+„+�-,*.,,,.�;,,.. „{+h„�, ,,,�.-„��-,�„� „
,
, ,
, ,
are in e�Ees�ef #' , , , exceed four million two
hundred fiftv thousand dollars ($4,250,000) during any calendar year. The cap set
forth in this subsection shall be administratively adjusted by the Administrator on
January 1st of each year, beginning on January 1, 2017, to reflect the inflation
adjustment, as defined and calculated pursuant to RMC 5-25-2.P. The amount of
the cap so calculated shall be rounded to the nearest ' ten dollars
($�A8910).
SECTION VII. Subsection 5-25-10.K of the Renton Municipal Code is amended as follows:
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ORDINANCE N0. 5861
K. Gross Receipts Taxed Under Other Renton Municipal Code (RMC)Sections:
This chapter shall not apply to:
1. Any person in respect to a business activity with respect to which tax
liability is specifically imposed under the provisions of RMC Chapter 5-11 (Utility
Tax); or
2. n.,., 4,.,.�,-, F�.J„ ,.1,-,.-;*�L,I., ., .�,��+ ., �-.+�., .J �� .J � or�n�
� �
��g.A�A�sa�tes� �e a�a�E—��r��an� �e�F�§-� ���ena f+d��" '�:«
r,.,.,.�,.-.,F;+ .,..,-..�,i-,-.+�.,.. �.-,.,�,hl�.-.., -.,-+i.,i+., 1�,�...,., .-,��I., •,.,.�1 ���.,.d.--,:.-:.�... -.,-+:..�+:,.,-.
� i i
��Il�a�s an���c��Fs; Ea;�ga,;,�s; ,^��e�c�rga,,,�7 Anv person in
respect to a business activitv with respect to which tax liabilitv is specificallv
imposed under the provisions of RMC Chapter 5-8 (Gamblin�Tax).
SECTION VIII. Subsection 5-25-10.Z of the Renton Municipal Code, is amended as
follows:
Z. Real Estate Brokers and Associated Brokers, Agents, or Salesmen: This
chapter does not apply to that portion of a real estate commission assigned to
another brokerage office pursuant to the division of revenue between the
originating brokerage office and a cooperating brokerage office on a particular
transaction. Each brokerage office shall pay the tax upon its respective revenue
share of the transaction. Furthermore, where a brokerage office has paid the
business �e�se and occupation tax on the gross commission earned by that
brokerage office, associate brokers, salesmen or agents within the same office
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ORDINANCE N0. 5861
shali not be required to pay the tax upon their share of the commission from the
same transaction.
SECTION IX. Subsection 5-25-11.0 of the Renton Municipal Code is amended as follows:
C. Artistic and Cultural Organizations - Income From Business Activities: In
computing tax, there may be deducted from the measure of tax those amounts
received by Non-Profit artistic or cultural organi2ations, as defined in this chapter,
which represent:
1. Income derived from business activities conducted bythe organization,
provided that this deduction does not apply to retail sales made by artistic and
cultural organizations;
2. Amounts received from the United States of America or any of its
instrumentalities or from the State of Washington or any municipal corporation
or subdivision thereof as compensation for; or to support, artistic or cultural
exhibitions, performances, or programs provided by an artistic or cultural
organization for attendance or viewing by the general public; or
3. Amounts received as tuition charges collected for the privilege of
attending artistic or cultural education programs.
SECTION X. Subsection 5-25-11.D ofthe Renton Municipal Code is amended as follows:
D. Artistic or Cultura) Organization - Deduction For Tax Under the
Manufacturing Classification - Value of Articles For Use In Displaying Art Objects
or Presenting Artistic or Cultural Exhibitions, Performances, or Programs: In
computing tax, there may be deducted from the measure of tax by�e�se+�� Non-
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ORDINANCE N0. 5861
Profit Or�anizations subject to payment of the tax under the manufacturing
classification, the value of articles to the extent manufacturing activities are
undertaken by an artistic or cultural organization, as defined in this chapter, solely
for the purpose of manufacturing articles for use by the organization in displaying
art objects or presenting artistic or cultural exhibitions, performances, or
programs for attendance or viewing by the general public.
SECTION XI. Subsection 5-26-3.E of the Renton Municipal Code is amended as follows:
E. "Reporting period" means:
1. A one (1) month period beginning the first day of each calendar month
(monthly); or
2. A three (3) month period beginning the first day of January, April, July
or October of each year (quarterly); or
3. A twelve (12) month period beginning the first day of January of each
year (annual).
4. �er a�er er�^�ee �e� i�en�ifie� ���� � �-C.T�k��
�•� ,*•�� ,�,��
SECTION XII. Subsection 5-26-6.A of the Renton Municipal Code is amended as follows:
q. n+ti�.-+�-,., -, -.� . ;�+r.,�,,,., �,,,, .. �a �" Except as provided in
RMC5-5-3.C�, � �,.e.,�o o�..;�+.-,+;,,., �,,,,� �„,� +ti� o,,. c...,.,i,,,,,,,, �,,,, . ;.,,a h„
°-";���z:—�taxes or fees imposed by Chapters 5-5, 5-6, 5-7, 5-8, 5-11, and 5-
25 shall be due and payable in quarterly installments. At the Administrator's
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ORDINANCE NO. 5861
discretion, businesses may be assigned to a monthly or annual reporting period
depending on the tax amount owing or type of tax. Tax returns and payments are
due on or before the last day of the next month following the end of the assigned
reporting period covered by the return.
SECTION XIII. Subsection 5-26-6.D of the Renton Municipal Code is amended as follows:
D. For purposes of the tax imposed by Chapter 5-25, any person whose value
of products, gross proceeds of sales, or gross income of the business, subject to
tax after all allowable deductions, is equal to or less than T"�^^ �,�^^'�^^' �^�'
�e�re+a*., ��.,^ T"^,��^^�' One Million Five Hundred Thousand dollars
($�9AA1,500,000) in the current �e� reportin� year, shall file a return,
declare no tax due under Chapter 5-25 on their return, and submit the return to
the Administrator.
SECTION XIV. Subsection 5-26-7.F of the Renton Municipal Code is amended as follows:
F. Any payment made that is returned for lack of sufficient funds or for any
other reason will not be considered received until payment by certified check,
money order, or cash of the original amount due, plus a "nonsufficient funds"
(NSF) charge ^� T..,^^+., ^^",r� �t�n nn� as specified in the City of Renton Fee
Schedule is received by the Administrator. Any license issued upon payment with
an NSF check will be considered void, and shall be returned to the Administrator.
No license shall be reissued until payment (including the NSF fee) is received.
SECTION XV. If any section, subsection, sentence, clause, phrase or work of this
ordinance should be held to be invalid or unconstitutional by a court or competent jurisdiction,
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ORDINANCE N0. 5861
such invalidity or unconstitutionality thereof shall not affect the constitutionality of any other
section, subsection, sentence, clause, phrase or word of this ordinance.
SECTION XVI. This ordinance shall be in full force on January 1, 2018.
PASSED BY THE CITY COUNCIL this 23rd day of October, 2017.
<
Jaso A. Seth, y Clerk
APPROVED BY THE MAYOR this 23rd day of October, 2017.
Denis Law, Mayor
Approved as to form:
�,���Ss•,c,� � � ,��`'����t`�F11�FN���''�,
=.�G��c`,,,,,,,,,,,����,,,,,�,���,'',
Shane Moloney, City Attorney _ �� y ;
: .�. �' _
_ * = SEAL �
Date of Publication: 10127/2017 (Summary) " � _ * =
— � — ', '�' _
ORD:1987:10 11 17:scr ,�''•y�°�A�''��""����,""�`��`b,�o,�'`
� � �������RqTED SEQ�����``�
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