HomeMy WebLinkAbout4396ORDINANCE NO. 4396
AN ORDINANCE of the City Council of the
City of Kent, Washington, amending section
3.28.050 of the Kent City Code establish a stand-
alone six-acre square footage threshold for
calculation of Outdoor Warehouse Space square
footage tax, effective January t, 2O2L'
RECITALS
A. On September L5,2O2O, the City council adopted ordinance
No. 4368 amending section 3.28.050 of the Kent City Code to extend the
square footage component of the city's B&o Tax to include outdoor
warehousing activities effective January t, 202L.
B. The intent of Ordinance No. 4368 was to establish a stand-
alone six-acre threshold (261,360 square feet) above which specific areas
of property used for taxable outdoor warehousing activities would be
subject to the outdoor square footage tax. However, in early February
202L, staff determined that KCC 3.28.050 could be interpreted to include
all taxable outdoor warehousing square footage if the threshold for either
of the other two square footage components is met.
C. It is the desire of City Council to resolve the ambiguity in KCC
3.2g.050 through a revision establishing the Outdoor Business Warehouse
six-acre threshold as a standalone exemption.
Amend KCC 3.28'O5O'
Re: Outdoor Warehousing
1
D. It is the intent of City Council to make the revisions to KCC
3.28.050 apply retroactively and be effective January L,TOZL, in order to
avoid any unintended tax liabilities on Kent businesses'
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
ORDINANCE
SE9TION 7. - Amendment - KCC 3.28.050. Section 3.28.050 0f
the Kent City Code, related to City business and occupation taxes and
entitled "Imposition of the tax - Tax or fee levied", is hereby amended as
follows:
sec. 3.28.O5O. Imposition of the tax - Tax or fee levied.
Except as provided in subsection (C) of this section, there is hereby levied
upon and shall be collected from every person a tax for the act or privilege
of engaging in business activities within the city, 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 the gross
proceeds of sale, gross income of business, or value of products, including
byproducts, and by application of rates against the square footage of
business office or facility space within the city, as the case may be, as
follows:
Amend KCC 3.28.O5O -
Re: Outdoor Wa rehousing
2
A. Gross receipts tax.
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 byproducts,
extracted within the city for sale or for commercial or industrial use,
multiplied by the rate of 0.152 hundredths of one percent (0.00152)
through December 31, 2O2L, and multiplied by the rate of 0.200
hundredths of one percent (0.002) effective January L, 2022' The measure
of the tax is the value of the products, including byproducts, 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
byproducts, manufactured within the city, multiplied by the rate of 0'046
hundredths of one percent (0.00046) through December 3L, ZOZL, and
multiplied by the rate of 0.100 hundredths of one percent (0.001) effective
January t, 2022. The measure of the tax is the value of the products,
including byproducts, so manufactured, regardless of the place of sale or
the fact that deliveries may be made to points outside the city'
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 0' 152
hundredths of one percent (0.00152) through December 3L, 2OL9, and
Amend KCC 3.28'O5O -
Re: Outdoor Warehousing
3
multiplied by the rate of 0.200 hundredths of one percent (0,002) effective
January L,2O2O.
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 0.046 hundredths of one
percent (0,00046) through December 3L, 202L, and multiplied by the rate
of 0.100 hundredths of one percent (0.001) effective January t,2022'
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 0.046 hundredths of one percent (0.00046) through December
3L, 2027, and multiplied by the rate qf 0'100 hundredths of one percent
(0,001) effective JanuarY L,2022'
6. Upon every person engaging within the city in the business of
making 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 0.152 hundredths of one percent (0.00152)
through December 3L, 2O2L, and multiplied by the rate of 0'200
hundredths of one percent (0.002) effective January L,2022'
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; as to such persons, the amount of tax on account of
Amend KCC 3'28'O5O -
Re: Outdoor Wa rehousing
4
such activities shall be equal to the gross income of the business multiplied
by the rate of 0.152 hundredths of one percent (0'00152) through
December 3L,202L, and multiplied by the rate of 0.200 hundredths of one
percent (0.002) effective January L, 2022. This subsection includes,
among others, and without limiting the scope hereof (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.
B. Square footage fax. Upon every person who leases, oWns, occupies,
or otherwise maintains an office, warehouse, outdoor warehouse, or other
place of business within the city for purposes of engaging in business
activities in the city, the tax shall be measured by the number of square
feet of business warehouse floor space, outdoor warehouse space, or other
business floor space for each office, warehouse, outdoor warehouse, or
other place of business leased, owned, occupied, or otherwise maintained
within the city during the reporting period, calculated to the nearest square
foot.
1. Subject to the reductions established in subsection (B)(8) of
this section, the amount of the tax due shall be equal to the sum of the
number of square feet of business warehouse floor space and outdoor
warehouse space for each business warehouse or outdoor warehouse
leased, owned, occupied, or otherwise maintained within the city multiplied
by the rate for each calendar year listed below, and the number of square
feet of other business floor space for each office or other place of business
Amend KCC 3'28.O5O -
Re: Outdoor Wa rehousing
5
leased, owned, occupied, or otherwise maintained within the city multiplied
by the rate for each calendar year listed below.
Effective
Date
Business Warehouse Floor
Space/Outdoor Warehouse SPace
Other Business Floor
Space
1t1t2019 0.06 quarterly rate
0.24 annual rate
0.02 quarterly rate
0.08 annual rate
1t1t2020 0.09 quarterly rate
0.36 annual rate
0.02 quarterly rate
0.08 annual rate
1t112025 0.12 quarterly rate
0.48 annual rate
0.02 quarterly rate
0.08 annual rate
1t1t2028 0.15 quarterly rate
0.60 annual rate
0.03 quarterly rate
0.12 annual rate
2. For purposes of this section, business warehouse means a
building or structure, or any part thereof, in which goods, wares'
merchandise, or commodities are received or stored, whether or not for
compensation, in furtherance of engaging in business.
3, For purposes of this sectiont outdoor warehouse means an
area that is outdoors and is primarily used for the transloading of goods,
Wares, merchandise, or commodities on property for purposes of switching
modes or vehicles of conveyance for the primary purpose of wholesaling,
distributing, or re-organizing goods, wares, merchandise, or commodities
en route to final destinations of sale or other transaction. Transloading
generally involves the transfer of goods from one mode of transportation
to another en route to an ultimate destination and, for purposes of the
Amend KCC 3.28.O5O -
Re: Outdoor Wa rehousing
6
square footage tax, includes areas used for crossdocking, waylaying,
temporary embarkment, and other similar activities.
4. For purposes of this section, other business floor space means
the floor space of an office or place of business, other than a business
warehouse or outdoor warehouse'
5, For purposes of this section, the square footage of a business
warehouse and other business floor space shall be computed by measuring
to the inside finish of permanent outer building walls and shall include
space used by columns and projections necessary to the building' Square
footage shall not include stairs, elevator shafts, flues, pipe shafts, vertical
ducts, heating or ventilation shafts, janitor closets, and electrical or utility
closets.
6, For purposes of this section, the square footage of an outdoor
warehouse shall only include those areas used for the receipt or storage of
goods, Wares, merchandise, or commodities that are being received and
temporarily stored for transloading, whether or not for compensation, in
furtherance of engaging in business. Such areas will typically include those
areas where gOOds, Wares, merchandise, and commoditieS, in transit to
their ultimate destination, are parked, packaged, or stored after
transloading, waylaying, or crossdocking. Square footage shall not include
areas used only for employee, customer, or visitor parking, dock high
loading areas used primarily for a business warehouse, buildings, areas
used only for direct sales or rentals to consumers, landscaped areas'
stormwater facilities, maneuvering areas and drive aisles, areas used only
for garbage or recycling pickup, rights-of-way' or other areas clearly not
used for the temporary storage of goods, Wares, merchandise, and
commodities in transit, Outdoor areas used for storage of agricultural
products or for ancillary storage of materials utilized ifl, or products
Amend KCC 3'28'O5O -
Re: Outdoor Wa rehousi ng
7
resulting from, onsite manufacturing operations are not considered outdoor
warehouses.
7. Persons with more than one office, business warehouse,
outdoor warehouse, or other place of business within the city must include
all business warehouse floor space, outdoor warehouse Space, and other
business floor space for all locations within the city. When a person rents
space to another person, the person occupying the rental space is
responsible for the square footage business tax on that rental space only if
the renter has exclusive right of possession in the space as against the
landlord. Space rented for the storage of goods in a warehouse or outdoor
warehouse where no walls or other barriers separate the goods, and where
the exclusive right of possession in the space is not held by the person to
whom the space is rented, shall b'e included in the business warehouse
floor space of the person that operates the business warehouse, and not
by the person renting the warehouse space.
8. If the square footage tax imposed in this subsection (B) is
less than or equal to the gross receipts tax imposed in subsection (A) of
this section, no square footage tax will be due; if the square footage tax
imposed in this subsection (B) exceeds the gross receipts tax imposed in
subsection (A) of this section, the taxpayer shall also remit the excess over
the gross receipts tax payable under subsection (A) of this section.
C. Gross receipts and square footage threshold.
1, Gross receipts threshold. The gross receipts tax imposed in
subsection (A) of this section shall not apply to any person engaging in any
one or more business activities which are otherwise taxable pursuant to
this section, whose value of products, including byproducts, gross proceeds
of sales, and gross income of the business, as the case may be, from all
Amend KCC 3.28.O5O'
Re: Outdoor Warehousing
8
activities conducted within the city during any calendar year does not
exceed the threshold amount of $250,000.
2. Square footage threshotd. The square footage tax on business
rararahnt t flnar cna^a rnrl n{.lrar hr rcinacc fl r ch:taa imposed in
subsection (B) of this section shall not apply to any person unless that
person's total area of business warehouse soace and other business floor
space within the city exceeds one of the following thresholds:
a. 4,000 taxable square feet of business warehouse
space; or
b.
@
F-12,000 taxable square feet of other business floor
space.
If the square footage tax applies to business warehouse floor space or
other business floor space, it applies to all business warehouse space and
other busi ness floor space leased, owned, occupied, or otherwise
maintained by the taxpayer during the applicable reporting period.
r
9 Amend KCC 3.28.O5O'
Re: Outdoor Warehousing
reporting Period.
D, Gross receipts maximum - Retailing activities, Effective January 1,
ZO2Z, the gross receipts tax imposed in subsection (A) of this section shall
not apply to retailing activities exceeding $20,000,000 in any calendar
year which are otherwise taxable pursuant to this section.
E. Rules. The director may promulgate rules and regulations regarding
the manner, means, and method of calculating any tax imposed under this
section.
SECTION 2. - Severabilitv. 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.
ESTION 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; ordinance, section, or subsection numbering;
or references to other local, state, or federal laws, codes, rules, or
regulations.
SECTION 4. - Effective Date. This ordinance shall take effect and
be in force five days from and after its publication as provided by RCW
35A.11.090 and RCW 35A.12.130; however, the revisions to KCC 3'28.050
regarding square footage tax on outdoor warehousing operations shall
apply retroactively and be effective January L,2O2L.
March 2,202t
Date Approved
Amend KCC 3.28.O5O -
Re: Outdoor Warehousing
DANA RALPH, MAYO
10
ATTEST:
KIMBERLEY A.
0
OMOTO, CITY RK
March 2, 202L
Date Adopted
March 5, 2021
Date Published
APPROVED AS
RICK, CIry ATTORNEY
Amend KCC 3'28.O5O -
Re: Outdoor Warehousing
11
A\u*
Kent Reporter
a weekly newspaper, which newspaper is a legal newspaper of general
circulation and is now and has bein for more than six months prior to the date
of publication hereinafter referred to, published in the Engiish language
continuously as a weekly newspaper in King County, Wa-shington' The
Kent- Covington Reporier has been upptorr.d as a Legal Newspaper by order of
the Superiot Co,t.t of the State of Washingtonio1 rcilS County'
The notice in the exact form annexed was published in regular issues of
the Kent- Covington Reporter (and not in iupplement form) which was regularly
distributed to its subscriters duiing the below stated period. The annexed
STATE OF WASHINGTON, COUNTY OF KING }
AFFIDAVIT OF PUBLICATION
PUBLIC NOTICE
Rudi Alcott, being first duiy sworn on oath that he is the
Vice President of Advertising for Sound Publishing,
which publishes the
nottce, a:
Public Notice #KENs2oB61
was published on March 5,202L
The iull amount of the fee charged for said foregoing publication is the
sum of $
Rudi Alcott
Vice President, Advertising
Subscribed and sworn to me this Sth day of March, 202L '
Tribbett,Public for the State of Washington,Residing in
Washington
EXp
g.fiTAftF
Pugtte
lltlll
Classified Proof
CITYOF KENT
NOTICE OF
ORDINANCES
PASSED BY THE CITY
couNctL
The following are sum-maries of ordinances
passed by the Kent CitVCouncil on March i,
2421.
ORDINANCE NO. 4393
-AN ORDIMNCE of the
City Council of the Citv
of - Kent, tAhshingtori,
amending the KentComprehensive Plan
and its CaDital Facilities
Elem€nt t; incorporate
an updated Park Proiect
List and the 2A21 Paftlmpact Fee Studv
(cPA-2021-1 ).
This ordinance shall take
effect and be in force 30
days from and after its
passage. as provided by
law-
ORDINANCE NO. 4394
-AN ORDINANCE ofthe
City Council of the Citvof Kent, Washingtori,amending the KentComprehensive Plan
and its Capital Facilities
Element to incorporate
an updated Transporta-tion Project List andam€nding the Kent
Comprehensive Plan to
replace the content ofthe Transportation Ele-
ment wilh the uodated
Transportation Master
Plan (CPA-2021-2).
This ordinance shall take
effeci and be in force 30
days from and after its
passage, as provided by
law
ORDINANCE NO. 4396
-AN ORDINANCE ofthe
City Council of the Citvof Kent, Washington,amending section
3.28.050 of the Kent City
Code establish a stand-
alone six- acre souare
footage threshold foi cal-
Proofed by Jennifer Tribbett, 03/03/2021 I I : 1 3:06 am Page:2
Classified Proof
culation of Outdoor
Warehouse Space
square footrage tax, ef-
fe;tiveJanuarv 1,2021
This ordinance shall take
effect and be in foroe
Frve days from and after
its publication as Provd-
ed bv RCW 354.11.090
and'RCW 35A.12.130;
however, the revisions to
KCC 3.28.050 regarding
square footage tiax on
outdoor warehouslng oF
erations shall aPPIY ret-
roactivelv and be effec-
tive Jantiarv 1, 2021
A copv of ihe complete
text df'any ordinance will
b€ mailed upon request
of th€ Citv Clerk.
Kimberlei A. Komoto,
Ciw Clerk
Kk6moto@KentWA.gov
253a56-5725
#920861
3t5t21
Proofed by Jennifer Tribbett, 03/03/2021 11:13:06 am Page:3