Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 CITY OF SEATTLE 2 ORDINANCE __________________ 3 COUNCIL BILL __________________ 4 5 6 7 8 9 10 ..title AN ORDINANCE relating to taxation; imposing a payroll expense tax on persons engaging in business in Seattle; adding a new Chapter 5.38 to the Seattle Municipal Code; and amending Sections 5.30.010, 5.30.060, 5.55.010, 5.55.040, 5.55.060, 5.55.150, 5.55.165, 5.55.220, 5.55.230, and 6.208.020 of the Seattle Municipal Code. ..body 11 WHEREAS, the City Council intends to revisit the tax imposed by this new Chapter 5.38 in the 12 event that an organization with overlapping jurisdiction implements a progressive 13 revenue source that provides City funding at levels equivalent to those generated through 14 this payroll expense tax; and 15 16 17 WHEREAS, on March 11, 2020, the World Health Organization announced that the novel coronavirus (COVID-19) is officially a global pandemic; and WHEREAS, on February 29, 2020 the Washington Governor issued Proclamation 20-05, 18 proclaiming a state of emergency for all counties throughout the state of Washington in 19 response to new cases of COVID-19, and 20 WHEREAS, on March 25, 2020 the Washington Governor issued Proclamation 20-25, 21 prohibiting all people in Washington State from leaving their homes and all non-essential 22 businesses in Washington State from conducting business (“Stay Home – Stay Healthy 23 Proclamation”); and 24 25 26 27 WHEREAS, these actions are appropriate for public health reasons but result in severe economic impacts on families and individuals in Seattle; and WHEREAS, these impacts are felt most strongly by people with low incomes who have become unemployed or had their work hours severely reduced; and Template last revised August 15, 2016 1 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 2 3 WHEREAS, federal and state assistance to people with low incomes will not be sufficient to meet their basic needs during this public health and financial crisis; and WHEREAS, without additional support, many people with low incomes will face severe 4 financial hardship which will have significant negative impacts, including but not limited 5 to public health impacts, greater housing insecurity, as well as impacts to small 6 businesses and the local economy; and 7 WHEREAS, on November 2, 2015, the Mayor of Seattle issued a Proclamation of Civil 8 Emergency related to homelessness; on November 3, 2015, the City Council adopted 9 Resolution 31630 ratifying and confirming the Mayoral Proclamation of Civil 10 Emergency; and the civil emergency remains in effect. As of 2019 there were roughly 11 11 percent more people experiencing homelessness in the region than in 2015; and 12 WHEREAS, a national study published in the Journal of Urban Affairs established the 13 correlation between increasing rent and homelessness, finding that an increase of $100 in 14 median rent for an area results in a 15 percent (metro areas) and a 39 percent (nearby 15 suburbs and rural areas) increase in homelessness; and 16 17 18 WHEREAS, average rents in Seattle rose 69 percent between 2010 and 2018, far beyond the rate of inflation and more than double the national average; and WHEREAS, the 2019 Seattle-King County Point in Time Count of persons experiencing 19 homelessness estimates there are 11,199 individuals experiencing homelessness in the 20 region; and 21 22 WHEREAS, the October 2019 Report and Recommendations of the King County Regional Affordable Housing Task Force found that 156,000 affordable homes were needed Template last revised August 15, 2016 2 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 immediately and another 88,000 affordable homes by 2040 to ensure that no low-income 2 or working households were cost burdened; and 3 WHEREAS, the Third Door Coalition proposal advocates for the creation of 6,500 permanent 4 supportive housing units as a proven solution for meeting the housing and services needs 5 of those who are chronically homelessness; and 6 WHEREAS, the City recognizes the importance of using a “Housing First” approach in the 7 development of permanent housing for those experiencing homelessness that prioritizes 8 providing access to low or no barrier housing for such persons; and 9 WHEREAS, the affordable housing crisis, homelessness emergency, and now the COVID-19 10 pandemic and related economic and unemployment emergencies, in Seattle are deeply 11 impacting the lives of people throughout Seattle and the region and disproportionately 12 harms people of color, immigrants, the LGBTQ community, indigenous peoples’ 13 communities, disabled community members, and women, who already struggle against 14 entrenched inequality; and 15 16 17 18 19 20 21 WHERAS, the International Monetary Fund’s recent World Economic Outlook forecasts the worst global recession since the Great Depression; and WHEREAS, the City Budget Office’s recent economic forecast for the Seattle metropolitan area predicts significant job loss, high unemployment, and declining per capita income; and WHEREAS, the City Budget Office projects the City’s revenue will be impacted by between $210 million to $300 million in 2020; and WHEREAS, a significant decline in revenue will impact the City’s ability to provide necessary 22 support to communities facing hardship due to the COVID-19 public health crisis and 23 recession and to adequately address the ongoing homelessness crisis; and Template last revised August 15, 2016 3 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 WHEREAS, the period of economic recovery from the Great Recession resulted in worsening 2 economic disparities in Washington, and households in experiencing deep poverty 3 increased by 15,000 in the state; and 4 WHEREAS, the economic hardships and loss of wealth resulting from the Great Recession 5 disproportionately impacted households of color, in particular Black households and 6 Hispanic and Latinx households; and 7 WHEREAS, the gains in income growth associated with the period of economic recovery and 8 growth in Washington leading up to the COVID-19 recession have been concentrated 9 among the wealthiest households; and 10 11 12 WHEREAS, public investments have not kept pace with the growing economy, and in fact have declined from pre-Great Recession levels; and WHEREAS, austerity measures and spending cuts made in response to the Great Recession 13 resulted in uneven and slow economic recovery, and prolonged hardship for vulnerable 14 and marginalized communities; and 15 16 17 WHEREAS, Washington ranks as worst in the nation for regressive state and local tax systems; and WHEREAS, the U.S. Internal Revenue Service states that “a progressive tax takes a larger 18 percentage of income from high-income groups than from low-income groups and is 19 based on the concept of ability to pay”; and 20 WHEREAS, on November 20, 2017, the City Council unanimously adopted Resolution 31782, 21 establishing a process by which The City of Seattle will determine new progressive 22 revenues including an Employee Hours Tax, expressing the City Council’s intent to 23 impose such potential revenues, and expressing the City Council’s intent to make Template last revised August 15, 2016 4 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 investments with these revenues that would assist people who are homeless or at a high 2 risk of becoming homeless in obtaining and retaining stable housing; and 3 WHEREAS, Resolution 31782 established a Progressive Revenue Task Force (“Task Force”) 4 and requested that the Task Force evaluate and determine “appropriate tax rates and 5 possible exemption levels that are expected to yield between $25 million and $75 million 6 in revenue per year”; and 7 WHEREAS, the Progressive Revenue Task Force’s March 9, 2018, final report recommended 8 that the City seek to collect $75 million from a new Employee Hours Tax, a new Payroll 9 Tax, or both to address homelessness and affordable housing; and 10 11 WHEREAS, the City imposed an Employee Hours Tax through Ordinance 125578 that would have raised $47 million annually plus a measure of inflation; and 12 WHEREAS, the City repealed the Employee Hours Tax through Ordinance 125592; and 13 WHEREAS, The City of Seattle intends to exercise its taxing authority, as granted by the 14 Washington State Constitution and as authorized by the Washington State Legislature; 15 NOW, THEREFORE, 16 BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS: 17 Section 1. A new Chapter 5.38 is added to the Seattle Municipal Code as follows: 18 Chapter 5.38 PAYROLL EXPENSE TAX 19 5.38.010 Administrative provisions 20 All of the provisions contained in Chapter 5.55 shall have full force and application with respect 21 to taxes imposed under the provisions of this Chapter 5.38 except as may be expressly stated to 22 the contrary herein. 23 5.38.020 Definitions Template last revised August 15, 2016 5 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 The definitions contained in Chapter 5.30 shall be fully applicable to this Chapter 5.38 except as 2 may be expressly stated to the contrary herein. The following additional definitions shall apply 3 throughout this Chapter 5.38: 4 5 6 “Business” has the same meaning as that term is defined in SMC 5.30.020. Depending on the context, “business” may also mean a person engaging in business in Seattle. “Compensation” means remuneration as that term is defined in RCW 50A.05.010, net 7 distributions, or incentive payments, including guaranteed payments, whether based on profit or 8 otherwise, earned for services rendered or work performed, whether paid directly or through an 9 agent, and whether in cash or in property or the right to receive property. “Compensation” does 10 not include payments to an owner of a pass-through entity that are not earned for services 11 rendered or work performed, such as return of capital, investment income, or other income from 12 passive activities. 13 “Employee” means any individual who performs work, labor, or personal services of any 14 nature for compensation paid by a business. For purposes of this Chapter 5.38, the term 15 “employee”: 16 1. Includes individuals who are members of limited liability companies, members of 17 professional limited liability companies, partners, other owners of pass-through entities, and sole 18 proprietors; and 19 20 21 22 23 2. Includes individuals who would be considered to be independent contractors for purposes of the business license tax under subsection 5.45.090.S. “Grocery business” means: 1. A business whose primary business is making retail sales of food and food ingredients to consumers that are exempt from the retail sales tax under RCW 82.08.0293; and Template last revised August 15, 2016 6 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 2. A business whose primary business is making wholesale sales of food and food 2 ingredients that will be exempt from the retail sales tax under RCW 82.08.0293 when resold by 3 the purchaser. 4 For subsections (1) and (2) of this definition, “primary business” means that 70 percent of 5 the gross income of the business for purposes of calculating the business license tax under 6 Chapter 5.45 is attributable to that business activity. 7 8 9 “Local government entity” has the same meaning as that term is defined in RCW 4.96.010. “Net distribution” means the draws from net income by any owner of a pass-through 10 entity. Taxable distributions are limited by the amount of draws or net income for that owner, 11 whichever is less. If the owner’s draw exceeds that individual’s net profit, the excess draw is a 12 return of capital. A return of capital is not taxable because it is a liquidation of an owner’s assets. 13 “Pass-through entity” includes a trust, partnership, corporation described in Subchapter S 14 of the Internal Revenue Code of 1986, as amended, limited liability company, limited liability 15 partnership, professional corporation, and any other person or entity which is not subject to the 16 income tax imposed by Subtitle A, Chapter 1 of the Internal Revenue Code of 1986, as amended, 17 or which is allowed a deduction in computing such tax for distributions to the owners or 18 beneficiaries of such person or entity. 19 20 21 “Payroll expense” means the compensation paid in Seattle to employees. Compensation is paid in Seattle to an employee if: a. The employee is primarily assigned within Seattle; Template last revised August 15, 2016 7 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 b. The employee is not primarily assigned to any place of business for the tax period and 2 the employee performs fifty percent or more of his or her service for the tax period in 3 Seattle; or 4 c. The employee is not primarily assigned to any place of business for the tax period, the 5 employee does not perform fifty percent or more of his or her service in any city, and 6 the employee resides in Seattle. 7 8 9 10 “Primarily assigned” means the business location of the taxpayer where the employee performs his or her duties. “Remuneration” has the same meaning as that term is defined in RCW 50A.05.010. “Taxpayer” means any person who engages in any business in Seattle or who performs 11 any act for which a tax is imposed under this Chapter 5.38. 12 5.38.030 Tax imposed—Rate 13 14 15 A. A payroll expense tax is hereby levied upon and shall be collected from every person engaging in business within Seattle. B. The amount of the payroll expense tax due shall be the payroll expense of the 16 business, subject to any deductions authorized under this Chapter 5.38, multiplied by the 17 following rates: 18 19 1. For businesses with payroll expense between $7,000,000 and $1 billion, the rate shall be: 20 21 a. .007 of the payroll expense of employees with annual compensation of $150,000 to $499,999; and 22 23 b. .014 of the payroll expense of employees with annual compensation of $500,000 or more. Template last revised August 15, 2016 8 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 2. For businesses with payroll expense greater than $1 billion, the rate shall be: 2 a. .014 of the payroll expense of employees with annual compensation of 3 $150,000 to $499,999; and 4 b. .021 of the payroll expense of employees with annual compensation of 5 6 $500,000 or more. C. The tax imposed by this Chapter 5.38 is levied on businesses. A business may not 7 make any deductions from employees’ compensation to pay for this tax. 8 5.38.040 Exemptions from the payroll expense tax 9 A. The following are exempt from the payroll expense tax: 10 11 1. Any business having payroll expense, as defined under subsection 5.38.020, of less than $7 million in the most recent complete calendar year. 12 2. Any business engaged in business in Seattle as a grocery business. 13 3. Any individual who is an independent contractor for purposes of the business 14 license tax under Section 5.45.090.S and whose compensation is included in the payroll expense 15 of another business subject to the tax imposed by Section 5.38.030. 16 17 4. Businesses that are preempted from taxation by cities pursuant to federal or state statutes or regulations, including, but not limited to, the following: 18 a. Insurance businesses and their agents as defined by RCW 48.01.050 and 19 48.17.010, respectively, and whose total revenue is exempt from the business license tax per 20 Chapter 5.45. 21 22 b. Businesses that only sell, manufacture, or distribute motor vehicle fuel as defined in RCW 82.38.020 and exempted under RCW 82.38.080. Template last revised August 15, 2016 9 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 2 c. Businesses that only distribute or sell liquor as defined in RCW 66.04.010 and exempted in RCW 66.08.120. 3 d. Federal and state government agencies and any local governmental 4 entity. 5 5.38.050 Allocation and apportionment 6 A. The Director may adopt procedures to allow taxpayers who have payroll expenses 7 consisting of work done and services provided within and outside Seattle to use a representative 8 test period or conduct a survey based on factual data to arrive at a formula with which to 9 calculate the percentage of payroll expense attributable to Seattle. Any formula so established 10 will be subject to review and correction by the Director. 11 B. If payroll expense as defined in 5.38.020 does not fairly represent the extent of the 12 compensation paid by the taxpayer to its employees that is attributable to work performed or 13 services rendered in Seattle, the taxpayer may petition the Director for, or the Director may 14 require, the employment of another method to effectuate an equitable allocation and 15 apportionment. 16 C. Nothing in this Chapter 5.38 shall be construed as requiring the payment of any tax for 17 engaging in business when such payment would be in violation of the Constitution or a statute of 18 the United States or of the Constitution or a statute of the State of Washington. Notwithstanding 19 anything to the contrary herein, if imposition of the City’s tax would place an undue burden upon 20 interstate commerce or violate other constitutional requirements, a taxpayer shall be allowed a 21 credit to the extent necessary to preserve the validity of the City’s tax, and still apply the City’s 22 tax to as much of the taxpayer’s activities as may be subject to the City’s taxing authority. Template last revised August 15, 2016 10 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 D. Businesses engaging temporary or contracted employees shall report and pay the tax 2 on the payroll expense of such temporary or contracted employees, whether or not they are from 3 an employment agency. 4 5.38.060 Payroll Expense Tax —When due 5 The payroll expense tax imposed by this Chapter 5.38 shall be due and payable on a quarterly 6 basis in accordance with Section 5.55.040. Notwithstanding Section 5.55.040, the tax due for 7 2021 shall be payable on the same date that the tax payment for the fourth quarter of 2021 is due. 8 The Director may use discretion to assign businesses to an annual reporting period. Forms for 9 such filings shall be prescribed by the Director. Persons discontinuing their business activities in 10 Seattle shall report and pay the payroll expense tax at the same time as they file their final 11 business license tax return under Chapter 5.45. 12 5.38.070 Adjustments for inflation 13 A. Beginning on January 1, 2022, and on January 1 of every year thereafter, the Director 14 shall adjust in the manner described in subsection 5.38.070.B the following dollar amounts: 15 1. The amount of the dollar thresholds in section 5.38.030; and 16 2. The amount of the exemption in subsection 5.38.040.A.1. 17 B. The amounts listed in subsection 5.38.070.A shall increase commensurate with the rate 18 of growth of the prior year’s June-to-June consumer price index (CPI-U) for the Seattle-Tacoma- 19 Bellevue area as published by the United States Department of Labor. The amounts calculated 20 shall be rounded to the nearest whole dollar. 21 5.38.080 Tax in addition to other license fees or taxes Template last revised August 15, 2016 11 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 The tax imposed herein shall be in addition to any license fee or tax imposed or levied under any 2 other law, statute, or ordinance whether imposed or levied by the City, the State, or other 3 governmental entity or political subdivision. 4 5.38.090 Tax part of operating overhead 5 It is not the intention of this Chapter 5.38 that the taxes herein levied upon persons engaging in 6 business be construed as taxes upon the customers of such businesses, but that taxes shall be 7 levied upon, and collectible from, the person engaging in the business activities herein 8 designated and that such taxes or fees shall constitute a part of the operating overhead or cost of 9 doing business of such persons. 10 5.38.100 Maintaining a Level Playing Field 11 To maintain a level playing field for the payroll excise tax imposed in this Chapter 5.38, the 12 Council intends to monitor proposals for any taxes imposed by King County or the State of 13 Washington on progressive revenue, including payroll excise taxes. The City intends to work 14 with King County and the State of Washington to consider amendments to the tax imposed by 15 this Chapter 5.38 in the event that businesses become subject to a future significant progressive 16 taxes at the county or state level. 17 5.38.110 Rules and regulations 18 The Director shall adopt, publish, and enforce rules and regulations not inconsistent with this 19 Chapter 5.38 for the purpose of carrying out the provisions of this Chapter 5.38, including but 20 not limited to rules to determine the payroll expense attributable to work performed and services 21 rendered by employees in Seattle. 22 5.38.120 Sunset 23 For all periods from January 1, 2021 through December 31, 2030 a payroll expense tax as 24 imposed by this chapter is hereby levied. No business shall owe a payroll expense tax for payroll Template last revised August 15, 2016 12 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 expenses after December 31,2030 and this Chapter 5.38 shall be limited to determining and 2 collecting the payroll expense tax due for all business activities prior to December 31, 2030. 3 Section 2. Section 5.30.010 of the Seattle Municipal Code, last amended by Ordinance 4 125934, is amended as follows: 5 5.30.010 Definition provisions 6 The definitions contained in this Chapter 5.30 shall apply to the following chapters of the Seattle 7 Municipal Code: Chapters 5.32 (Amusement Devices), 5.35 (Commercial Parking Tax), 5.38 8 (Payroll Expense Tax), 5.39 (Transportation Network Company Tax), 5.40 (Admission Tax), 9 5.45 (Business License Tax), 5.46 (Square Footage Tax), 5.47 (Heating Oil Tax), 5.48 (Business 10 Tax—Utilities), 5.50 (Firearms and Ammunition Tax), 5.52 (Gambling Tax), 5.53 (Sweetened 11 Beverage Tax), and 5.55 (General Administrative Provisions) unless expressly provided for 12 otherwise therein, and shall also apply to other chapters and sections of the Seattle Municipal 13 Code in the manner and to the extent expressly indicated in each chapter or section. Words in the 14 singular number shall include the plural and the plural shall include the singular. Words in one 15 gender shall include all other genders. 16 Section 3. Subsections 5.30.060.B and 5.30.060.C of the Seattle Municipal Code, which 17 section was last amended by Ordinance 125934, is amended as follows: 18 5.30.060 Definitions, T—Z 19 20 *** B. “Taxable gross income of the business and the value of products,” as used in Section 21 5.55.030 to determine the business license tax certificate fee, and “taxable gross income” 22 ((means)) mean the taxpayer’s total amount of gross proceeds of sale, gross income of the Template last revised August 15, 2016 13 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 business, and the value of products, less any deductions available to the taxpayer under Chapter 2 5.45. 3 C. “Taxpayer” means any “person,” as herein defined, required by Chapter 5.55 to have a 4 business license tax certificate, or liable for any license, tax, or fee, or for the collection of any 5 tax or fee, under Chapters 5.32 (Revenue Code), 5.35 (Commercial Parking Tax), 5.38 (Payroll 6 Expense Tax), 5.39 (Transportation Network Company Tax), 5.40 (Admission Tax), 5.45 7 (Business License Tax), 5.46 (Square Footage Tax), 5.47 (Heating Oil Tax), 5.48 (Business 8 Tax—Utilities), 5.50 (Firearms and Ammunition Tax), 5.52 (Gambling Tax), and 5.53 9 (Sweetened Beverage Tax), or who engages in any business or who performs any act for which a 10 tax or fee is imposed under those chapters. 11 12 *** Section 4. Section 5.55.010 of the Seattle Municipal Code, which was last amended by 13 Ordinance 125934, is amended as follows: 14 5.55.010 Application of chapter stated 15 Unless expressly stated to the contrary in each chapter, the provisions of this Chapter 5.55 shall 16 apply with respect to the licenses and taxes imposed under this Chapter 5.55 and Chapters 5.32 17 (Amusement Devices), 5.35 (Commercial Parking Tax), 5.38 (Payroll Expense Tax ), 5.39 18 (Transportation Network Company Tax), 5.40 (Admission Tax), 5.45 (Business License Tax), 19 5.46 (Square Footage Tax), 5.47 (Heating Oil Tax), 5.48 (Business Tax—Utilities), 5.50 20 (Firearms and Ammunition Tax), 5.52 (Gambling Tax), 5.53 (Sweetened Beverage Tax), and 21 under other titles, chapters, and sections in such manner and to such extent as indicated in each 22 such title, chapter, or section. Template last revised August 15, 2016 14 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 Section 5. Subsection 5.55.040.A of the Seattle Municipal Code, which section was last 2 amended by Ordinance 125934, is amended as follows: 3 5.55.040 When due and payable—Reporting periods—Monthly, quarterly, and annual 4 returns—Threshold provisions—Computing time periods—Failure to file returns p 5 A. Other than any annual license fee or registration fee assessed under this Chapter 5.55, 6 the taxes imposed by Chapters 5.32 (Amusement Devices), 5.35 (Commercial Parking Tax), 5.38 7 (Payroll Expense Tax), 5.39 (Transportation Network Company Tax), 5.40 (Admission Tax), 8 5.45 (Business License Tax), 5.46 (Square Footage Tax), 5.47 (Heating Oil Tax), 5.48 (Business 9 Tax—Utilities), 5.50 (Firearms and Ammunition Tax), 5.52 (Gambling Tax), and 5.53 10 (Sweetened Beverage Tax) shall be due and payable in quarterly installments. The Director may 11 use discretion to assign businesses to a monthly or annual reporting period depending on the tax 12 amount owing or type of tax. Taxes imposed by subsections 5.52.030.A.2 and 5.52.030.B.2 for 13 punch boards and pull-tabs shall be due and payable in monthly installments. Tax returns and 14 payments are due on or before the last day of the next month following the end of the assigned 15 reporting period covered by the return. 16 17 *** Section 6. Subsection 5.55.060.A of the Seattle Municipal Code, which section was last 18 amended by Ordinance 125934, is amended as follows: 19 5.55.060 Records to be preserved—Examination—Inspection—Search warrants—Estoppel 20 to question assessment 21 A. Every person liable for any fee or tax imposed by this Chapter 5.55 and Chapters 5.32, 22 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, and 5.53 shall keep and preserve, for a 23 period of five years after filing a tax return, such records as may be necessary to determine the Template last revised August 15, 2016 15 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 amount of any fee or tax for which the person may be liable; which records shall include copies 2 of all federal income tax and state tax returns and reports made by the person. All books, records, 3 papers, invoices, ticket stubs, vendor lists, gambling games, and payout information, inventories, 4 stocks of merchandise, and other data, including federal income tax and state tax returns, and 5 reports needed to determine the accuracy of any taxes due, shall be open for inspection or 6 examination at any time by the Director or a duly authorized agent. Every person’s business 7 premises shall be open for inspection or examination by the Director or a duly authorized agent. 8 For the purposes of this Section 5.55.060, for the tax imposed by Chapter 5.53, “business 9 premises” means wherever the person’s business records and tax documents are maintained and 10 does not mean every site owned or operated by the person. 11 *** 12 Section 7. Subsection 5.55.150.E of the Seattle Municipal Code, which section was last 13 amended by Ordinance 125934, is amended as follows: 14 5.55.150 Appeal to the Hearing Examiner 15 *** 16 E. The Hearing Examiner shall ascertain the correct amount of the tax, fee, interest, or 17 penalty due either by affirming, reversing, or modifying an action of the Director. Reversal or 18 modification is proper if the Director’s assessment or refund denial violates the terms of this 19 Chapter 5.55, or Chapters 5.30, 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, or 20 5.53. 21 *** 22 Section 8. Section 5.55.165 of the Seattle Municipal Code, which section was last 23 amended by Ordinance 125934, are amended as follows: Template last revised August 15, 2016 16 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 5.55.165 Director of Finance and Administrative Services to make rules 2 The Director of Finance and Administrative Services shall have the power and it shall be the 3 Director’s duty, from time to time, to adopt, publish, and enforce rules and regulations not 4 inconsistent with this Chapter 5.55, with Chapters 5.30, 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.47, 5 5.46, 5.48, 5.50, 5.52, or 5.53, or with law for the purpose of carrying out the provisions of such 6 chapters, and it shall be unlawful to violate or fail to comply with any such rule or regulation. 7 Section 9. Subsections 5.55.220.A and 5.55.220.B of the Seattle Municipal Code, which 8 section was last amended by Ordinance 125934, are amended as follows: 9 5.55.220 Unlawful actions—Violation—Penalties 10 11 A. It shall be unlawful for any person subject to the provisions of this Chapter 5.55 or Chapters 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, and 5.53: 12 1. To violate or fail to comply with any of the provisions of this Chapter 5.55, or 13 Chapters 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, and 5.53, or any lawful 14 rule or regulation adopted by the Director; 15 16 2. To make or manufacture any license required by this Chapter 5.55 except upon authority of the Director; 17 3. To make any false statement on any license, application, or tax return; 18 4. To aid or abet any person in any attempt to evade payment of a license fee or 19 tax; 20 5. To refuse admission to the Director to inspect the premises and/or records as 21 required by this Chapter 5.55, or to otherwise interfere with the Director in the performance of 22 duties imposed by Chapters 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, and 23 5.53; Template last revised August 15, 2016 17 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 6. To fail to appear or testify in response to a subpoena issued pursuant to Section 2 3.02.120 in any proceeding to determine compliance with this Chapter 5.55 and Chapters 5.32, 3 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, and 5.53; 4 5 6 7. To testify falsely in any investigation, audit, or proceeding conducted pursuant to this Chapter 5.55; 8. To continue to engage in any business activity, profession, trade, or occupation 7 after the revocation of or during a period of suspension of a business license tax certificate issued 8 under Section 5.55.030; or 9 9. In any manner, to hinder or delay the City or any of its officers in carrying out 10 the provisions of this Chapter 5.55 or Chapters 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 11 5.50, 5.52, and 5.53. 12 B. Each violation of or failure to comply with the provisions of this Chapter 5.55, or 13 Chapters 5.32, 5.35, 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, or 5.53 shall constitute a 14 separate offense. Except as provided in subsection 5.55.220.C, any person who commits an act 15 defined in subsection 5.55.220.A is guilty of a gross misdemeanor, punishable in accordance 16 with Section 12A.02.070. The provisions of Chapters 12A.02 and 12A.04 apply to the offenses 17 defined in subsection 5.55.220.A, except that liability is absolute and none of the mental states 18 described in Section 12A.04.030 need be proved. 19 *** 20 Section 10. Subsection 5.55.230.A of the Seattle Municipal Code, which section was last 21 amended by Ordinance 125934, is amended as follows: Template last revised August 15, 2016 18 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 5.55.230 Denial, revocation of, or refusal to renew business license tax certificate 2 A. The Director, or the Director’s designee, has the power and authority to deny, revoke, 3 or refuse to renew any business license tax certificate or amusement device license issued under 4 the provisions of this Chapter 5.55. The Director, or the Director’s designee, shall notify such 5 applicant or licensee in writing by mail in accordance with Section 5.55.180 of the denial of, 6 revocation of, or refusal to renew the license and on what grounds such a decision was based. 7 The Director may deny, revoke, or refuse to renew any business license tax certificate or other 8 license issued under this Chapter 5.55 on one or more of the following grounds: 9 1. The license was procured by fraud or false representation of fact. 10 2. The licensee has failed to comply with any provisions of this Chapter 5.55. 11 3. The licensee has failed to comply with any provisions of Chapters 5.32, 5.35, 12 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, 5.52, or 5.53. 13 14 4. The licensee is in default in any payment of any license fee or tax under Title 5 or Title 6. 15 16 *** Section 11. Subsection 6.208.020.A of the Seattle Municipal Code, which section was 17 last amended by Ordinance 125934, is amended as follows: 18 6.208.020 Denial, revocation of, or refusal to renew business license 19 A. In addition to any other powers and authority provided under this Title 6, the Director, 20 or the Director’s designee, has the power and authority to deny, revoke, or refuse to renew any 21 business license issued under the provisions of this Chapter 6.208. The Director, or the 22 Director’s designee, shall notify such applicant or licensee in writing by mail of the denial, 23 revocation of, or refusal to renew the license and on what grounds such a decision was based. Template last revised August 15, 2016 19 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 The Director may deny, revoke, or refuse to renew any license issued under this Chapter 6.208 2 on one or more of the following grounds: 3 1. The license was procured by fraud or false representation of fact. 4 2. The licensee has failed to comply with any provisions of this Chapter 6.208. 5 3. The licensee has failed to comply with any provisions of Chapters 5.32, 5.35, 6 5.38, 5.39, 5.40, 5.45, 5.46, 5.47, 5.48, 5.50, or 5.52. 7 8 9 10 11 12 13 4. The licensee is in default in any payment of any license fee or tax under Title 5 or Title 6. 5. The property at which the business is located has been determined by a court to be a chronic nuisance property as provided in Chapter 10.09. 6. The applicant or licensee has been convicted of theft under subsection 12A.08.060.A.4 within the last ten years. 7. The applicant or licensee is a person subject within the last ten years to a court 14 order entering final judgment for violations of chapters 49.46, 49.48, or 49.52 RCW, or 29 15 U.S.C. 206 or 29 U.S.C. 207, and the judgment was not satisfied within 30 days of the later of 16 either: a. The expiration of the time for filing an appeal from the final judgment order under the 17 court rules in effect at the time of the final judgment order; or b. If a timely appeal is made, the 18 date of the final resolution of that appeal and any subsequent appeals resulting in final judicial 19 affirmation of the findings of violations of chapters 49.46, 49.48, or 49.52 RCW, or 29 U.S.C. 20 206 or 29 U.S.C. 207. 21 8. The applicant or licensee is a person subject within the last ten years to a final 22 and binding citation and notice of assessment from the Washington Department of Labor and 23 Industries for violations of chapters 49.46, 49.48, or 49.52 RCW, and the citation amount and Template last revised August 15, 2016 20 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 penalties assessed therewith were not satisfied within 30 days of the date the citation became 2 final and binding. 3 9. Pursuant to subsections 14.16.100.A.4, 14.17.075.A, 14.19.100.A.4, 4 14.20.080.A.4, 14.22.115.A.4, and 14.23.115.A.4, the applicant or licensee has failed to comply, 5 within 30 days of service of any settlement agreement, with any final order issued by the 6 Director of the Office of Labor Standards, or any final order issued by the Hearing Examiner 7 under Chapters 14.16, 14.17, 14.19, 14.20, 14.22, and 14.23 for which all appeal rights have 8 been exhausted, and the Director of the Office of Labor Standards has requested that the Director 9 deny, refuse to renew, or revoke any business license held or requested by the applicant or 10 licensee. The denial, refusal to renew, or revocation shall remain in effect until such time as the 11 violation(s) under Chapters 14.16, 14.17, 14.19, 14.20, 14.22, and 14.23 are remedied. 12 13 14 15 10. The business is one that requires an additional license under this Title 6 and the business does not hold that license. 11. The business has been determined under a separate enforcement process to be operating in violation of law 16 *** 17 Section 12. Severability. If any part, provision, or section of this ordinance is held to be 18 void or unconstitutional, all other parts, provisions, and sections of this ordinance not expressly 19 so held to be void or unconstitutional shall continue in full force and effect. 20 Section 13. Sections 1 through 11 of this ordinance shall take effect on January 1, 2021. 21 Section 14. This ordinance shall take effect and be in force 30 days after its approval by 22 the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it 23 shall take effect as provided by Seattle Municipal Code Section 1.04.020. Template last revised August 15, 2016 21 Dan Eder/Tom Mikesell LEG Payroll Expense Tax ORD D1 1 Passed by the City Council the ________ day of _________________________, 2020, 2 and signed by me in open session in authentication of its passage this _____ day of 3 _________________________, 2020. 4 President ____________ of the City Council 5 Approved by me this ________ day of _________________________, 2020. 6 ____________________________________ 7 Jenny A. Durkan, Mayor 8 Filed by me this ________ day of _________________________, 2020. 9 ____________________________________ 10 11 Monica Martinez Simmons, City Clerk (Seal) Template last revised August 15, 2016 22