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Home My WebLink AboutORD 6038CITY OF RENTON, WASHINGTON ORDINANCE NO. 6038 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AMENDING SECTION 5-25-4 OF THE RENTON MUNICIPAL CODE TO UPDATE AND PHASE OUT THE BUSINESS AND OCCUPATION TAX ANNUAL CAP WITH FIXED CAPS THROUGH 2024 AND REPLACING THE CAP STARTING IN 2025 WITH A RATE REDUCTION FOR TAXES PAID BY AN INDIVIDUAL TAXPAYER ABOVE TWELVE MILLION DOLLARS IN A GIVEN TAX YEAR; REPEALING DEFINITIONS FOR INFLATION ADJUSTMENT FROM RMC 5-25-2.P AND 5-26-3.D; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO ORDAIN AS FOLLOWS: SECTION I. All portions of the Renton Municipal Code in this ordinance not shown in strikethrough and underline edits remain in effect and unchanged. SECTION II. Subsection 5-25-2.P of the Renton Municipal Code is repealed in its entirety and marked "Reserved," as shown below. All other provisions in 5-25-2 remain in effect and unchanged. P. Reserved. "kFfii�tier,-l.djwstmeRt" shall I'P- Rt equal to the acne, T,c multiplied h 11 1 + the I �i� v�v i i cTx�-p ii� 9 r ril I n•d3, a$ the Ease may SECTION Ill. Section 5-25-4 of the Renton Municipal Code is amended as follows: 5-25-4 IMPOSITION OF THE TAX — TAX OR FEE LEVIED; BUSINESS LICENSE FEE EXEMPTION: n ORDINANCE NO. 6038 A. Except as provided in RMC 5-25-4.BC- (Tax Thresholds) and 5-25-4.CS (Amounts in Excess of Cap), effective January 1, 2016 at 12:01 a.m. there is levied upon and shall be collected from every person a tax for the act or privilege of engaging in business activities in the City of Renton, whether the person's office or place of business be within or without the City. The tax shall be in amounts to be determined by application of rates against gross proceeds of sale, gross income of business, or value of products, including by-products, as the case may be, as follows: 1. Upon every person engaging within the City in business as an extractor; as to such persons, the amount of the tax with respect to such business shall be equal to the value of the products, including by-products, extracted within the City for sale or for commercial or industrial use, multiplied by the rate of .085 of one percent (.00085). The measure of the tax is the value of the products, including by-products, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the City. 2. Upon every person engaging within the City in business as a manufacturer; as to such persons, the amount of the tax with respect to such business shall be equal to the value of the products, including by-products, manufactured within the City, multiplied by the rate of .085 of one percent (.00085). The measure of the tax is the value of the products, including by- products, so manufactured, regardless of the place of sale or the fact that deliveries may be made to points outside the City. 2 ORDINANCE NO. 6038 3. Upon every person engaging within the City in the business of making sales at wholesale; as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of such sales of the business without regard to the place of delivery of articles, commodities or merchandise sold, multiplied by the rate of .085 of one percent (.00085). 4. Upon every person engaging within the City in the business of making sales at retail; as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of such sales of the business, without regard to the place of delivery of articles, commodities or merchandise sold, multiplied by the rate of .050 of one percent (.00050). 5. Upon every person engaging within the City in the business of (a) printing, (b) both printing and publishing newspapers, magazines, periodicals, books, music, and other printed items, (c) publishing newspapers, magazines and periodicals, (d) extracting for hire, and (e) processing for hire; as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of .085 of one percent (.00085). 6. Upon every person engaging within the City in the business of sales of retail services; as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales multiplied by the rate of .085 of one percent (.00085). 7. Upon every other person engaging within the City in any business activity other than or in addition to those enumerated in the above subsections; k ORDINANCE NO. 6038 as to such persons, the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of .085 of one percent (.00085). This subsection includes, among others, and without limitation whether or not title to material used in the performance of such business passes to another by accession, merger or other than by outright sale, persons engaged in the business of developing, or producing custom software or of customizing canned software, producing royalties or commissions, and persons engaged in the business of rendering any type of service which does not constitute a sale at retail, a sale at wholesale, or a retail service. BQ Tax Thresholds: This chapter shall not apply to any person engaging in any one (1) or more business activities which are otherwise taxable pursuant to RMC 5-25-4.A, whose value of products, including by-products, gross proceeds of sales, and gross income of the business, less any deductions, as the case may be, from all activities conducted during any calendar year, is less than or equal to the threshold amount of five hundred thousand dollars ($500,000). C8. Annual Tax Cap and Rate Reduction: For the calendar years 2022-2024, the tax imposed under this chapter for a single taxpayer shall not exceed the following maximum tax amounts for each respective year according to the following schedule: 2022 — seven million dollars ($7,000,000); 2023 — nine million dollars ($9,000,000); 2024 — eleven million dollars ($11,000,000). Starting in 2025 m W ORDINANCE NO. 6038 and for each subsequent year thereafter, once a taxpayer has paid twelve million dollars ($12,000,000) in taxes imposed under this chapter in the given year, the rates specified in RMC 5-25-4.A shall be discounted by seventy-five percent (75%) for remaining gross proceeds of sale, gross income of business, or value of products, including by-products, as the case may be. The tax imp ^'- und-er rc ,MINUWATATM SECTION IV. Subsection 5-26-3.1) of the Renton Municipal Code is repealed in its entirety and marked "Reserved," as shown below. All other provisions in 5-26-3 remain in effect and unchanged. D. Reserved. '�;,;;vi aAdjustment." Whenever an "IRf1ail9R-adj1 stmeRt"-is Fe ed9F peFFR+tted-pefsbie tte-aRY sesti9Ref RNAGTitle V, saehadjaSteaeRt ORDINANCE NO. 6038 SECTION V. 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, such invalidity or unconstitutionality thereof shall not affect the constitutionality of any other section, subsection, sentence, clause, phrase or word of this ordinance. SECTION VI. This ordinance shall take full force and effect on January 1, 2022. No later than five (5) days prior to such effective date, a summary of this ordinance consisting of its title shall be published in the City's official newspaper. PASSED BY THE CITY COUNCIL this 22nd day of November, 2021. A. Seth APPROVED BY THE MAYOR this 22nd day of Novembe`F, 2021. Approved as to form: Shane Moloney, City Attorney Date of Publication: 11/25/2021 (Summary) ORD:2197:11/2/21 Clerk Armnon o Pavone, Mayor SEAS-' _*= ��i ✓c0 //''��unuw``�p` rO `� ORA `ED E