234 Business Occupation Tax,_ w
TOWN OF YELM
ORDINANCE NO. 234
AN ORDINANCE relating to the conduct of various
businesses and occupations within the Town of
Yelm; providing for and levying a tax or license
fee upon certain income derived from the conduct
of certain businesses and occupations; providing
for necessary administrative procedures for the
collection of such tax and license fees; providing
penalties for failure to timely pay such tax and
license fees; and, repealing Town of Yelm Ordi-
nance Nos. 96 and 157 and Chapters 5.04 and 5.08
of the Yelm Municipal Code.
WHEREAS, Section 35.27.370 of the Revised Code of Washington em-
powers the Town, by ordinance, to license, for purposes of regulation
and revenue, all and every kind of business authorized by law and
transacted and carried on in the Town and to provide for the imposi-
tion of penalties for violation of its ordinances; and,
WHEREAS, the Town Council of the Town of Yelm deems it to be in
the best interest of the Town and its citizens to license and tax cer-
tain businesses conducted within the Town for revenue and regulation,
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN
OF YELM, THURSTON COUNTY, WASHINGTON, as follows:
Section 1. Exercise of Powers. The provisions of this Ordinance
shall be deemed an exercise of the power of the Town of Yelm to license
for revenue and regulation.
Section 2. Definitions. In construing the provi: >i.ons of this
Ordinance, except when otherwise declared or clearly apparent from the
context, the following definitions shall be applied:
(a) "Town Clerk" means the Clerk- Treasurer of
the Town of Yelm.
(b) "Town" means the Town of Yelm.
(c) "Tax year" or "taxable year" shall mean the
calendar year.
(d) "Person" or "company ", herein used interchange-
ably, means any individual, receiver, assignee, trust;-�e
in bankruptcy, trust, estate, firm, co- partnership, joint
venture, club, company, joint -stock company, business
trust, corporation, association, society or any group of
individuals acting as a unit, whether mutual, cooperative,
fraternal, non - profit or otherwise, and includes the
United States or any instrumentality thereof, provided
a valid tax may be levied upon or collected therefrom
under the provisions of this Ordinance.
(e) "Gross income of the business" means the value
proceeding or accruing by reason of the transaction of the
business engaged in and includes gross proceeds of sales,
compensation for the rendition of services, professional or
otherwise, gains realized from trading in stocks, bonds or
other evidences of indebtedness, interest, discounts, rents,
royalties, fees, commissions, dividends and other emoluments,
however designated, all without any deduction on account of the
cost of tangible property sold, the cost of materials used,
labor costs, interest, discounts, delivery costs, taxes or any
other expense whatsoever paid or accrued and without any
deduction on account of losses.
(f) "Value proceeding or accruing" means the consideration,
whether money, credits, rights or other property expressed
in terms of money, actually received or accrued. The term
shall be applied, in each case, on a cash receipts or accrual
basis according to which method of accounting is regularly
employed in keeping the books of the taxpayer. The auditor
may provide by regulation that the value proceeding or
accruing from sales on the installment plan under conditional
contracts of sale may be reported as of dates when the payments
become due.
(g) "Business" includes all activities engaged in with
the object of gain, benefit or advantage to the taxpayer or to
another person or class, directly or indirectly.
(h) "Engaging in business" means commencing, conducting
or continuing in business and also the exercise of corporate
or franchise powers, as well as liquidating a business when
the liquidators thereof hold themselves out to the public as
conducting such business.
(i) "Cash discount" means a deduction from the invoice
price of goods or charge for services which is allowed if the
bill is paid on or before a specified date.
(j) "Successor" means any person who shall, through
direct or mesne conveyance, purchase or succeed to the
business, or portion thereof.. or the whole or any part of the
stock of goods, wares or werchandise or fixtures, or any
interest therein, of a taxpayer quitting, selling out, exchanging
or otherwise disposing of his business. Any person obligated
to fulfill the terms of a contract shall be deemed a successor
to any contractor defaulting iri the performance of any contract
as to which such person is surety or guarantor.
(k) "Taxpayer" includes any individual, group of
individuals, corporation or association required to have a business
license hereunder, or liable for any license fee or tax or for
the collection of any license fee or tax hereunder, or who engages
in any business or who performs any act for which a license
fee or tax is imposed by this Ordinance.
(1) "Semi - annual period" means a six -month period,
beginning the first day of the months of January and July.
Section 3. License Required. Or. and after the effective date of
this Ordinance, no person, whether or riot subject to the payment of a tax
as provided in this Ordinance, shall eiviatie ir: ktny business or activity within
the Town without having first obtained and Loirig the holder of a valid and
subsisting "business license" to so do, issued tinder the provisions of this
Ordinance. The business license shall be issued for any lawful business on
-2-
164
application therefor and payment of the annual license fee of Five
Dollars ($5.00). The business license issued pursuant to the provi-
sions of this Ordinance shall be valid so long as the person to whom
the same is issued continues in business and pays the annual license
fee of Five Dollars ($5.00) on or before February 1 of each year and
any tax due pursuant to the provisions of this Ordinance. Applica-
tions for the license shall be made to and on forms provided by the
Town Clerk.
Section 4. License Specifications and Posting. The license
shall be personal and non - transferable. In case business is trans-
acted at two or more separate places by one taxpayer, a separate
license for each place at which business is transacted with the
public shall be required, but for such additional license, no addi-
tional fee shall be required. Each license shall be numbered, shall
show the name, place and character of the business of the taxpayer,
such other information as the Town Clerk deems necessary, and shall
at all times be conspicuously posted in the place of business for
which it is issued.
Section. 5. Use of License. No person to whom a license shall
have been issued pursuant to this Ordinance shall suffer cr allow any
other person for whom a separate license is required to operate or
display such license, nor shall such other person operate under or
display such license.
Section 6. Businesses and Occupations Subject to Tax and the
Rate Thereof. There is hereby levied upon, and there shall be col -
eI o'ted frome every person as hereinafter provided, for the act or
privilege of engaging in business activities within the Town, a
license fee or occupation tax (sometimes hereinafter referred to
as the "tax ") as follows:
(a) Upon every person engaged in or carrying on
a telephone business, a telegraph business, a combined
telephone and telegraph business, the business of sell-
ing or furnishing gas for hire, the business of selling
or furnishing electric light and power, the business of
supplying steam heat or power to the public for hire and
the business of transporting passengers for hire on a
regular route, a fee or tax equal to 4 /10ths of 1% (.004)
of the total gross income of such business within the Town
during the calendar year next preceding the calendar year
for which the tax is collected; provided, however, that
the minimum fee or tax shall not be less than One Hundred
Dollars ($100.00) per tax year.
(b) Upon every person engaged in or carrying on
any other business within the Town not specifically ex-
empt by the provisions of this Ordinance, a fee or tax
equal to 1 /10th of 1% (.001) of the total "gross income"
of such business within the Town during the calendar year
next preceding the calendar year during which the fee or
tax is collected; provided, however, that the minimum fee
or tax shall not be less than Twenty -Five Dollars ($25.00)
per tax year.
Section 7. Semi - annual Payment of Tax. The license fee or tax
imposed by this Ordinance is levied and shall be effective commencing
January 1, 1980, and shall be due and payable in semi - annual install-
ments and remittance therefor shall be made on or before the thirtieth
day of the month next succeeding the end of the semi - annual period in
which the tax accrued, that is, on the thirtieth day of July and Janu-
ary of each year. The remittance shall be made to the Town Clerk and
accompanied by a return on a form to be provided and prescribed by the
Town Clerk. To the return, the taxpayer shall be required to swear or
affirm that the information therein given is full and true and that the
taxpayer knows the same to be so. First payments and returns under this
Ordinance shall be made on or before July 30, 1980.
r 1 ``�■■
Section 8. Records. It shall be the duty of every person
engaging in business as defined by this Ordinance to keep and
preserve, for a period of five years, such books and records as
will accurately reflect the amount of business gross income or
gross subscriber station exchange revenues, as the case may be,
and from which can be determined the amount of any fee or tax
for which the business may be liable under the provisions of
this Ordinance. The term "books and records ", as used in this
section, includes the taxpayer's copies of his federal excise
tax returns, State of Washington excise tax returns and copies
of excise tax audits made by the United States or State of
Washington and furnished to such person. The taxpayer's books
and records shall be open for examination at all reasonable
times by the Town Clerk or its duly authorized representative.
Section 9. Failure to Pay Fee or Tax. If payment of any
fee or tax due under this Ordinance is not received by the Town
Clerk on or before the date it becomes due under this Ordinance,
there shall be added a penalty as follows:
(a) One- to forty -day delinquency, ten per-
cent with a minimum penalty of five dollars;
(b) Forty -one- to seventy -day delinquency,
fifteen percent with a minimum penalty of ten
dollars;
(c) Seventy -one or more days delinquent,
twenty percent with a minimum penalty of fifteen
dollars.
Any tax due and unpaid, and all penalties thereon, shall
constitute a debt to the Town and may be collected by court
proceedings, which remedy shall be in addition to all other
remedies.
Section 10. Overpayment. Any money paid to the Town
through error or otherwise not in payment of the tax imposed
by this Ordinance or in excess of such tax shall, upon request
of the taxpayer, be credited against any tax due or to become
due from such taxpayer hereunder, or, upon taxpayer's ceasing
to do business in the Town, be refunded to the taxpayer.
Section 11. Failure or Refusal to Make Return. Any person,
firm or corporation subject to this Ordinance who shall fail or
refuse to make the tax return or to pay the tax when due, or who
shall make any false statement or represenation in or in connection
with such tax return, or shall otherwise violate or refuse or fail
to comply with this Ordinance, shall be guilty of a• misdemeanor.
Section 12. Rules and Regulations. The Town Clerk is
hereby authorized to adopt, publish and enforce, from time to
time, such rules and regulations for the proper administration
of this Ordinance as shall be necessary, and it shall be a vio-
lation of this Ordinance to violate or to fail to comply with
any such rule or regulation lawfully promulgated hereunder.
Section 13. Persons Doing Business both Within and Without
the Town. Persons engaged in the business of rendering services
- 4 -
both within and without the Town, or partially within and parti-
ally without the Town, and maintaining an office or place of
business within the Town and not elsewhere, shall be taxable
under Section 6 hereof on the gross income from the business
without regard to the place, and any such person shall, for
the purpose of computing tax liability under this Ordinance,
apportion to the Town that portion of his gross income which
is derived from services rendered within the Town. Where such
apportionment cannot be made by separate accounting methods,
the taxpayer shall apportion to the Town that portion of his
total income which the cost of doing business within the Town
bears to the total cost of doing business both within and with-
out the Town.
Section 14. Exemptions. Except as hereinafter provided,
the provisions of Section 6 hereof shall not apply to:
(a) Any person engaging in any business
activity where the gross income of the business
is less than One Thousand Dollars ($1,000.00) fcr
a tax year; provided, however, that when one per-
son engages in more than one business activity
and the combined activities equal or exceed
$1,000.00 for the tax year, no exemption from
the tax is allowed by this provision; provided,
further, that any person claiming exemption
under the provisions of this subsection may be
required by the Town Clerk to file returns as
provided herein, even though no tax may be due;
(b) Any business or occupation which the
Town of Yelm is prohibited from taxing, by the
Constitution or laws of the State of Washington
or by the Constitution or laws of the United
States of America;
(c) Any person in respect to his employment
in the capacity of an employee or servant as dis-
tinguished from that of an independent contractor;
(d) The United States or any instrumentality
thereof and the State of Washington or any munici-
pal subdivision thereof;
(e) Non - profit or charitable
set up under the laws of the State
or any other state or territory of
States, but not as to any business
such entities, which business acti,
be taxable hereunder.
organizations
of Washington
the United
activities by
vities shall-
Section 15. Deductions. In computing the license fee or
tax there may be deducted from the gross income of the business
the following:
(a) Amounts derived by persons, other than
those engaged in banking, loan, security or other
financial businesses, from investments or the use
- 5 -
.
6Y
of money as such, and also amounts derived as
dividends by a parent from its subsidiary corpo-
rations;
(b) Amounts derived from bona fide initia-
tion fees, dues, contributions, donations, tuition
fees and endowment funds on non - profit or charit-
able organizations. This paragraph shall not be
construed to exempt any person, association or
society from tax liability upon selling the tangi-
ble personal property or upon providing facilities
or services for which a special charge is made
to members or others. Dues which are for, or
graduated upon, the amount of service rendered by
the recipient thereof are not permitted as a de-
duction hereunder;
(c) The amount of cash discount actually
taken by the purchaser;
(d) The amount of credit losses actually
sustained by taxpayers whose regular books of
account are kept upon an accrual basis;
(e) Amounts derived from businesses which
the Town is prohibited from taxing under the
Constitution or laws of the State of Washington
or the Constitution or laws of the United States;
(f) Amounts derived as compensation for
services rendered or to be rendered to patients
by a hospital, as defined in Chapter 70.41 of
the Revised Code of Washington (RCW), devoted
to the care of human beings with respect to the
prevention or treatment of disease, sickness or
suffering, when such hospital is operated by the
United States or any of its instrumentalities,
or by the State of Washington or any of its
political subdivisions;
(g) Amounts derived as compensation for
services rendered to patients by a hospital, as
defined in RCW Chapter 70.41, which is operated
as a non - profit corporation, nursing homes and
homes for unwed mothers operated as religious
or charitable organizations, but only if no part
of the net earnings received by such institution
inures directly or indirectly to any person other
than the institution entitled to deduction here-
under. In no event shall any such deduction be
allowed, unless the property of such institution
is entitled to exemption from taxation under the
ad valorem property tax laws of the State of
Washington;
(h) By those engaged in banking, loan se-
curity or other financial businesses, amounts
-- constituting interest received on investments or
loans primarily secured by first mortgage or
trust deeds on non - transient residential prop-
erties;
(i) By those engaged in banking, loan secur-
ity or other financial businesses, amounts consti-
tuting interest paid on all obligations of the
State of Washington, its political subdivisions and
municipal corporations organized pursuant to the
laws thereof;
(j) Amounts constituting interest on loans
by a lending institution which is owned exclusively
by its borrowers or members which is engaged solely
in the business of making loans for agricultural
production;
(k) Amounts derived from those activities
on which the Town has levied a "gambling tax"
pursuant to Town of Yelm Ordinance No. 182 and
Chapter 3.40 of the Yelm Municipal Code;
V* Amounts derived from the lease, rental
or sale of real estate; provided, however, that
nothing herein shall be construed to allow a deduc-
tion of amounts derived from engaging in any busi-
ness wherein a mere license to use or enjoy real
property is granted, or to allow a deduction of
amounts received as commission from the sale or
rental of real estate.
Section 16. Credit for Business License Fee. There shall
be credited against the first taxes due under this Ordinance in
each calendar year the business license fee paid by each business
pursuant to Section 3 of this Ordinance.
Section 17. Repealer. Sections 1 through 9 of Town of Yelm
Ordinance No. 96 and Sections 1, 2 and 3 of Town of Yelm Ordinance
No. 157, all as codified as Chapter 5.04 and Chapter 5.08 of the
Yelm Municipal Code, be and the same are hereby repealed.
Section 18. Severability. If any provision or section of
this Ordinance shall be held void or unconstitutional, all other
parts, provisions and sections of this Ordinance not expressly so
held to be void or unconstitutional shall continue in full force
and effect.
Section 19. Effective Date. This Ordinance shall take
effect and be in force from and a�ter January 1, 1980.
—� Mayor
f
Attest:
Town Clerk
Passed: ��, / 1979
Approved: _ 1979
Published: Ale V,,,,,�� 1979
- 7 -