HomeMy WebLinkAbout4061 Ordinance No . 4061
(Amending or Repealing Ordinances)
CFN= 110 - Water Sewer & Drainage Rates & Policies (adding Cable)
Passed — 12/11/2012
Utility Taxes — Ch. 3.18 Allocation Adjustment
(Secs. 3.18.010-3.18.090)
Amends Ords. 2390;2514;2758;3074;3091;3274;3314;3319;
3321;3370;3456;3489;3594;3645;4020
The date ["Beginning July 1,1998"]has led to confusion This date will be deleted from cover sheets of
ordinance/resolution revision pages This cover sheet will be deleted on electronic pages only, no other
deletions or changes have been made to the document—6/21/2012
1
ORDINANCE NO. D!0
AN ORDINANCE of the City Council of the
City of Kent, Washington, amending Chapter 3.18
of the Kent City Code to establish a tax on cable
television services and to increase city water,
sewer, and storm drainage internal utility tax
allocations by three percent to retire certain
capital debt and to increase the general fund
balance.
RECITALS
A. The city council has determined that in order to continue
providing the same level of essential services to the Kent community, it is
necessary to implement new revenue sources.
B. The city council has determined that the public interest is best
served by increasing its water, sewer and storm drainage utility taxes plus
adding a new cable utility tax, to address projected short term and long
term revenue shortfalls caused by changes in state tax laws in order to
retain current levels of City services.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
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ORDINANCE
SECTION 1. - Amendment. Chapter 3.18 of the Kent City Code is
amended as follows:
Sec. 3.18.010. Definitions. The following words, terms, and
phrases, when used in this chapter, shall have the meanings ascribed to
them in this section, except where the context clearly indicates a different
meaning:
"Cable television business" means:
1. A system providing service pursuant to a franchise issued by the city
under the Cable Communications Policy Act of 1984 Public Law No. 98-
549, 47 U.S.C. Section 521. as it may be amended or superseded: or
2. Any system that competes directly with such franchised system by
employing antennae, microwaves, wires, wave guides. coaxial cables, or
other conductors, equipment or facilities designed, construed or used for
the purpose of:
a. Collecting and amplifying local and distant broadcast
television signals and distributing and transmittingthem;
hem;
b. Transmitting original cable-cast programming not received
through television broadcast signals: or
C. Transmitting television pictures, film and videotape programs
not received through broadcast television signals, whether or not encoded
or processed to permit reception by only selected receivers;`provided,
however, that "cable television service" shall not include entities that are
subject to charges as "commercial TV stations" under 47 U.S.C. Section
158, as it may be amended or superseded.
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Cellular telephone service means any two (2) way voice and/or data
telephone or similar communications system based in whole or in
substantial part on wireless radio communications, including cellular mobile
service, and which is not subject to regulation by the Washington State
Utilities and Transportation Commission that conflicts with or overrides this
chapter. Cellular telephone service includes other wireless radio
communications services including, without limitation, specialized mobile
radio, paging services, personal communications, and data services, and
any other evolving wireless radio communications technology that
accomplishes a purpose substantially similar to cellular telephone service.
Cellular telephone service is included within the definition of "telephone
business" for the purposes of this chapter.
Competitive telephone service means the providing by any person, firm, or
corporation of telecommunications equipment or apparatus, or service
related to that equipment or apparatus such as repair or maintenance
service, if the equipment or apparatus is of a type which can be provided
by persons that are not subject to regulation as telephone companies
under RCW Title 80 and for which a separate charge is made.
Gross income means the value proceeding or accruing from the
performance of the particular public service business involved, including
operations incidental thereto, but without any deduction on account of the
cost of the commodity furnished or sold, the cost of materials used, labor
costs, interest, discount, delivery costs, taxes, or any other expense
whatsoever paid or accrued and without any deduction on account of
losses. In addition, when determining total gross income from cellular
telephone service, "gross income" shall include all income from cellular
telephone service (including roaming charges incurred outside this state)
provided to customers whose "place of primary use" is in the city,
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regardless of the location of the facilities used to provide the service. The
customer's place of primary use is, with respect to each telephone: (a) the
customer's address shown on the telephone service company's records; or
(b) the customer's place of residence if the telephone is for personal use,
and in both cases must be located within the licensed service area of the
home service provider. Roaming charges and cellular telephone charges to
customers whose place of primary use is outside the city of Kent will not
be taxable even though those cellular services are provided within the city
of Kent. There is a rebuttable presumption that the address shown on the
cellular telephone service company's records is the place of primary use
and is accurate. If the cellular telephone service company knows or should
have known that a customer's place of primary use address for a telephone
is within the city, then the gross income from cellular telephone service
provided to that customer with respect to that telephone is to be included
in the company's gross income.
Network telephone service means the providing by any person, firm, or
corporation of access to a local telephone network, local telephone network
switching service, toll service, or coin telephone services, or the providing
of telephonic, video, data, or similar communication, or transmission for
hire via a local telephone network, toll line or channel, cable, microwave,
or similar communication or transmission system. "Network telephone
service" includes interstate service, including toll service, originating from
or received on telecommunications equipment or apparatus in this state if
the charge for the service is billed to a person in this state. "Network
telephone service" includes the provision of transmission to and from the
site of an internet provider via a local telephone network, toll line or
channel, cable, microwave, or similar communication or transmission
system. "Network telephone service" does not include the providing of
competitive telephone service, the providing of cable television service, the
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providing of broadcast services by radio or television stations, or the
provision of internet service as defined in RCW 82.04.297, including the
reception of dial-in connection, provided at the site of the internet service
provider.
Telephone business means the business of providing network telephone
service and cellular telephone service as those terms are defined in this
section and includes cooperative or farmer line telephone companies or
associations operating an exchange. "Competitive telephone service" shall
not be considered "telephone business." Telephone business shall include
one hundred (100) percent of the business and total gross income derived
from calls originating and/or billed to subscribers within the city.
Sec. 3.18.020. Certain utilities subject to tax.
A. In addition to the other business and license fees required by the
ordinances of the city, the city levies upon all persons, firms, or
corporations (including the city) engaged in certain business activities a
utilities tax to be collected as follows:
1. Upon every person, firm, or corporation engaging in or
carrying on any telephone business within the city, an annual tax equal to
six (6) percent of the total gross income, including revenues from
intrastate toll, derived from the operation of such business within the city.
This six (6) percent tax will be allocated as follows: four and seven-tenths
(4.7) percent to the general fund, three-tenths (0.3) percent to youth/teen
programs, and one (1.0) percent to street improvement programs.
2. Upon every person, firm, or corporation engaging in or
carrying on a business of selling, wheeling, furnishing, distributing, or
producing gas, whether manufactured or natural, for commercial or
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domestic use or purposes, a fee or tax equal to six (6) percent of the total
gross income from such business in the city during the tax year for which
the license is required. This six (6) percent tax will be allocated as follows:
four and seven-tenths (4.7) percent to the general fund, three-tenths (0.3)
percent to youth/teen programs, and one (1.0) percent to street
improvement programs.
3. Upon every person, firm, or corporation engaged in or
carrying on the business of selling, wheeling, furnishing, or distributing
electricity for light and power, a fee or tax equal to six (6) percent of the
total gross income from such business in the city during the tax year for
which a license is required. This six (6) percent tax will be allocated as
follows: four and seven-tenths (4.7) percent to the general fund, three-
tenths (0.3) percent to youth/teen programs, and one (1.0) percent to
street improvement programs.
4. Upon every person, firm, or corporation engaged in or
carrying on the business providing cable television services, a tax equal to
six (6) percent of the total gross income from that business in the city
during the tax year for which the license is required. All revenue received
from this tax must be applied only to funding the City's information
technology department operations and ca iptal projects budgets in the
roportion determined by the city council in its biennial budget, including
all amendments.
45. Upon every person, firm, or corporation engaging in or
carrying on a business providing solid waste collection services, a tax equal
to seven and eight-tenths (7.8) percent of the total gross income from
such business in the city during the tax year for which the license is
required. This seven and eight-tenths (7.8) percent tax will be allocated as
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follows: six and one-half (6.5) percent to the general fund, three-tenths
(0.3) percent to youth/teen programs, and one (1.0) percent to street
improvement programs.
b6. Upon every person (including the city) engaging in or carrying
on the business of selling, furnishing, or distributing water, sewer, or
drainage services, a tax equal to t-enthi een 12ercent (-1613%) �ereent of
the total gross income from such business in the city during the tax year.
This tentbLirtgen percent (I63%) ereentax will be allocated as follows:
four and seven-tenths percent (4.7%) pereent-to the general fund for the
use as allocated in the city's budge; four percent (4%) pereent—to the
general fund; only for the installation, operation, maintenance and repair
of street lighting, fire hydrants, and fire suppression systems subject to
the limitations provided in subsection (a) below; two percent (2%)
dedicated solely to the repayment and elimination of debt in the city's
"Other Capital Projects" fund subject to the limitations provided in
subsection (b) below; one l2ercent (1%) to be applied only to establishing
the city's fund balance consistent with council policy and subject to the
limitations provided in subsection (cc) below;-, three tenths (0.3) pere
to youth/teen PFegFaFns, and one percent pereerrt—to street
improvement programs; and three-tenths percent (0.3%) to youth/teen
programs.
(a) The four percent (421s) peFeent allocation for street lighting
and fire hydrants and suppression is further contingent on the requirement
that the city allocate the funds freed up by this revenue to the city's capital
improvement fund(s). _All transferred monies that become available in
these reallocated capital improvement fund accounts must be applied
equally to (a) information technology capital programs directed at funding
long- and short-term hardware and software replacement and (b) street
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capital programs, but further restricted to funding street maintenance,
repair, and signage only. If the cost to install, operate, maintain, and
repair street lighting, fire hydrants, and fire suppression systems is less
than the four percent (4%) pereent-allocation for these purposes, the full
four percent (4/Q) peFeent must still be allocated from the general
fund to capital programs for the above-stated purposes.
(b) The two percent (2%) internal tax allocation will be dedicated
to the city's Capital Improvements Fund for the sole purpose of retiring all
debt in the city's Other Capital Projects fund. This two percent (2%)
portion of the tax shall be eliminated on January 1, 2023, or on the first
day of the year following the date the debt in this fund is fully retired,
whichever occurs first.
(c) The one percent (1%) internal tax allocation will be dedicated
to the city's general fund balance solely for the purpose of increasing the
fund balance until that balance equals ten percent (10%) of the city's prior
year operating expenses. This one percent (1%) portion of the tax shall
be eliminated on the first day of the year following the date the city's
general fund balance equals ten percent 10%) of the prior year's
operating expenses,
B. In computing the tax provided in subsection (A) of this section, the
taxpayer may deduct from total gross income the following items:
1. The actual amount of credit losses and uncollectible
receivables sustained by the taxpayer.
2. Amounts derived from transactions in interstate and foreign
commerce which the city is prohibited from taxing under the laws and
Constitution of the United States.
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Sec. 3.18.030. Utility tax, when due. The utility tax imposed by
KCC 3.18.020 shall be due and payable in monthly installments and
remittance thereof shall be made on or before the last day of the following
month in which the tax accrued. On or before said due date, the taxpayer
shall file with the finance department a return upon a form to be
prescribed and provided by the finance department, which return shall
contain a statement by the taxpayer, stating that the amount of tax for
which it is liable for the preceding monthly period, that the information
therein given and the amount of tax liability therein reported are full and
true, and that the taxpayer knows the same to be true. This statement
shall be signed by the taxpayer or its authorized agent. Taxpayers
expected to owe less than one thousand dollars ($1,000) per month may
submit taxes on a quarterly basis; taxes shall be due on the last day of the
month following the end of the quarter in which the tax accrued. Quarterly
period for the purpose of this chapter shall mean each three (3) month
period of the calendar year, commencing on January 1.
Sec. 3.18.040. Taxpayer's records. Each taxpayer shall keep
records reflecting the amount of total gross income on its business within
the city, and such records shall be retained for at least six (6) years and
shall be open at all reasonable times to audit by the finance director or his
or her duly authorized representative for verification of said tax returns
and supporting records or for the filing of a tax of a taxpayer who fails to
make such a return.
Sec. 3.18.050. Tax - Payment failure - Penalty and
collection. If any person, firm, or corporation subject to this chapter fails
or neglects to pay any tax required by this chapter within thirty (30) days
from the date the tax is due to the city, a penalty of ten (10) percent of
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the amount of that tax will be imposed. Delinquent taxes, including any
penalties, are also subject to an interest charge of one (1) percent per
month (twelve (12) percent per annum) on any unpaid balance from the
date the tax payment became due, as provided in KCC 3.18.030, until all
past due taxes and penalties are paid in full. Any unpaid tax, penalty, or
interest due under this chapter and unpaid shall constitute a debt to the
city. The city may, pursuant to Chapter 19.16 RCW, use a collection
agency to collect taxes, interest, and penalties owed or assessed, or it may
seek collection by court proceedings, which remedies shall be in addition to
all other remedies.
Sec. 3.18.060. Overpayment of tax. Any money paid to the city
through error, or otherwise not in payment of the tax imposed by this
chapter, 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 the taxpayer ceasing to do business in the city, be
refunded to the taxpayer.
Sec. 3.18.070. Appeal to hearing examiner. Any taxpayer
aggrieved by the amount of tax, interest, or penalties determined by the
finance director to be due under the provisions of this chapter may appeal
such determinations to the city hearing examiner in accordance with, and
subject to, the provisions set forth in Chapter 2.32 KCC. Taxpayers shall
be required to remit the amounts determined to be due under this chapter
prior to filing an appeal.
Sec. 3.18.080. False returns. It is unlawful for any person, firm,
or corporation subject to this chapter to fail or refuse to pay the tax when
due, or for any person, firm, or corporation to make any false or fraudulent
application or return or any false statement or representation in, or in
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connection with such return, or to aid or abet another in any attempt to
evade payment of the tax, or any part thereof, or to testify falsely upon
any investigation of the correctness of a return upon the hearing of an
appeal or in any manner hinder or delay the city or any of its officers in
carrying out the provisions of this chapter.
Sec. 3.18.090. Noncompliance - Civil penalty. Any person,
firm, or corporation subject to this chapter, who fails or neglects to make
tax returns or who makes a false statement or representation in or in
connection with a utility tax return, or who otherwise violates or refuses to
comply with this chapter, is subject to a cumulative penalty in the amount
of one hundred dollars ($100) per day for each violation, in addition to the
nonpayment penalty imposed under KCC 3.18.050. All penalties imposed
under this chapter shall constitute a debt to the city. The city may, at its
discretion, pursuant to Chapter 19.16 RCW, use a collection agency to
collect taxes, interest, and penalties owed or assessed pursuant to this
chapter, or the city may seek collection by court proceedings, which
remedies shall be in addition to all other remedies.
SECTION 2, - Severability. If any one or more section,
subsection, or sentence of this ordinance is held to be unconstitutional or
invalid, such decision shall not affect the validity of the remaining portion
of this ordinance and the same shall remain in full force and effect.
SECTION 3, - 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.
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SECTION 4. - Effective Date. This ordinance shall take effect and
be in force beginning January 1, 2013, which is more than (5) days after
passage and publication, as provided by law.
J OOKE, MAYOR
i
ATTEST:
BRENDA JACOBER, CtVY CLERK
APPROVED AS TO FORM:
12 . 1 AA
T BRUBAK R, CITY ATTORNEY
PASSED: day of , 2012.
r06-
APPROVED: r/i 'day of , 2012.
PUBLISHED: -/ day of 12012.
I hereby certify that this is a true copy of Ordinance No. A10 6 /
passed by the City Council of the City of Kent, Washington, and approved
by the Mayor of the City of Kent as hereon indicated.
a �v-v-uei (SEAL)
BRENDA JACOB , CITY CLERK
�P_{Livll\Ordinance\titllitytaxkcc318hydrants lights 2013 Budget.D=
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