Seattle Rule 5-002 Business License Tax Certificate Requirements

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Seattle Rule 5-002

Business License Tax Certificate Requirements

(1) Persons required to obtain a business license tax certificate. Every person,

activities are allowed without having to obtain a business license tax certificate

or pay business license taxes. (See Seattle Rule 5-043, Engaging in business.)

Effective January 1, 2017, through December 31, 2017, under SMC 5.55.030.A,

the fee for the business license tax certificate shall be:

1. Fifty-five dollars for persons with taxable gross income of the business and

value of products of less than $20,000 in the most recent complete calendar

year that engage in any business activity, profession, trade, or occupation in

the City prior to July 1 and $27.50 for such persons beginning their activity on

3. Four hundred eighty dollars for persons with taxable gross income of the

business and value of products of $500,000 or more but less than $2,000,000

in the most recent complete calendar year that engage in any business

activity, profession, trade, or occupation in the City prior to July 1 and $240

for such persons beginning their activity on or after July 1;

4. One thousand dollars for persons with taxable gross income of the business

and value of products of $2,000,000 or more in the most recent complete

calendar year that engage in any business activity, profession, trade, or

occupation in the City prior to July 1 and $500 for such persons beginning

their activity on or after July 1.

Seattle Rule 5-002 Business License Tax Certificate Requirements

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the City prior to July 1 and $27.50 for such persons beginning their activity on

or after July 1;

2. One hundred ten dollars for persons with taxable gross income of the

business and value of products of $20,000 or more but less than $500,000 in

the most recent complete calendar year that engage in any business activity,

profession, trade, or occupation in the City prior to July 1 and $55 for such

persons beginning their activity on or after July 1;

3. Four hundred eighty dollars for persons with taxable gross income of the

business and value of products of $500,000 or more but less than $2,000,000

in the most recent complete calendar year that engage in any business

persons beginning their activity on or after July 1.

5. Two thousand dollars for persons with taxable gross income of the business

and value of products of $5,000,000 or more in the most recent complete

calendar year that engage in any business activity, profession, trade, or

occupation in the City prior to July 1 and $1,000 for such persons beginning

their activity on or after July 1.

Effective January 1, 2019 to December 31, 2019, under SMC 5.55.030.A, the fee

for the business license tax certificate shall be:

1. Fifty-five dollars for persons with taxable gross income of the business and

the most recent complete calendar year that engage in any business activity,

Seattle Rule 5-002 Business License Tax Certificate Requirements

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profession, trade, or occupation in the City prior to July 1 and $250 for such

persons beginning their activity on or after July 1;

4. One thousand two hundred dollars for persons with taxable gross income of

the business and value of products of $2,000,000 or more but less than

$5,000,000 in the most recent complete calendar year that engage in any

business activity, profession, trade, or occupation in the City prior to July 1

and $600 for such persons beginning their activity on or after July 1.

5. Two thousand four hundred dollars for persons with taxable gross income of

the business and value of products of $5,000,000 or more in the most recent

complete calendar year that engage in any business activity, profession,

Beginning January 1, 2019, any person whose annual value of products, gross

proceeds of sales, or gross income of the business in the City is equal to or less

than $2,000 and who does not maintain a place of business within the City is not

required to obtain a business license tax certificate.

(2) Business License Tax Certificate Application and Renewal.

(a) Application. A person shall apply to the Director of the Department of

Finance and Administrative Services on a form provided by the

Department. The business license tax certificate fee as provided in section

upon request.

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(d) Lost or damaged business license tax certificate. If any business license

tax certificate is lost or destroyed a new business license tax certificate

will be issued free of charge upon the taxpayers request.

(e) Business license tax certificate renewal. Business license tax certificates

are valid until December 31st of each calendar year and must be renewed

on or before the date of the expiration of such business license tax

certificate. Any owner of a business license tax certificate who fails to

renew the business license tax certificate on or prior to the expiration

date shall be subject to penalties for noncompliance as set forth under

Section 5 of this rule.

mails business Xs 2018 business license tax certificate fee renewal notice. The

business license tax certificate fee due for 2018 is $480. The business license tax

certificate fee due is based the most recent complete calendar year. At the time

the 2018 business license tax certificate fee renewal is issued in December 2017,

the 2016 calendar year is the most recent complete year. Therefore, the 2018

business license tax renewal fee due is based on the 2016 taxable amounts.

Business Y is a new business that will open in August 2018 in the City of Seattle.

Business Ys business license tax fee due at the time of registration is $27.50.

Business Y has no previous reported taxable amounts due because it is a new

return, the 2019 renewal fee will be trued up if the revenue reported requires a

Seattle Rule 5-002 Business License Tax Certificate Requirements

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registers its business in March 2018. At the time of registration, there is no filing

history for Business MM. Business MM will pay $55 for 2017 and $55 for 2018.

When Business MM files its tax return for 2017, the 2018 license fee will be

trued up if the revenue reported requires a license fee of more than the

defaulted $55. Business MM will be notified of any additional fee.

Business DD will be starting business in Seattle in 2019. Business DD is located

outside Seattle city limits and has no locations within Seattle city limits. Business

DD does not anticipate doing business in Seattle that will generate more than

$2000in taxable revenue. Business DD does not need to register for a Seattle

Business EE has no previous reported taxable amounts due because it is a new

business. Therefore, Business EEs business license tax certificate fee due at the

time of registration will default to the fee amount for the lowest tier, in this

instance the lowest fee is $27.50 based on the $55 tier prorated for half a year.

Business EE is located outside Seattle city limits. Business EE does not anticipate

generating Seattle taxable revenue in 2019. When Business EE receives its

renewal notice for 2019 it will need to contact the Department and declare its

anticipated revenue for 2019. Business EE will not need to have a business

license tax certificate for 2019. It will still need to report 2018 revenue and pay

tax as required. Should Business EE revenue in 2019 exceed $2000, Business EE

each application for a branch license. A branch license is required for branch

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return covering a branch location, or a specific construction contract, may

request from the Director a separate tax reporting form for each location;

however, pursuant to SMC 5.55.040 D, any and all thresholds for determining

tax liability will be based upon business activities of the entire entity, including

all business locations.

(4) Penalties for noncompliance. Failure to timely obtain or renew a business

license tax certificate and pay the applicable fee may result in the refusal by the

Director to renew or revocation of the business license, civil penalties and/or a

criminal citation being issued.

the second month following the expiration date.

(b) Failure to obtain a business license tax certificate. In addition to the

penalties imposed by subsection 4 (a), any person who fails to obtain a

business license prior to engaging in any taxable business activity is guilty

of a gross misdemeanor punishable in accordance with Title 12A of the

Seattle Municipal Code.

(c) Revocation of or refusal to renew license tax certificate. The Director may

refuse to renew or revoke a business license tax certificate pursuant to

SMC 5.55.230. See Rule 5-003 for procedures pertaining to the Director's

refusal to renew or the revocation of a business license. Any person,

(d) All business licenses tax certificates issued subsequent to the initial

license period shall be deemed renewal licenses if there has been no

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due during the term of any license, or the failure of a licensee to file tax

returns when due, shall constitute grounds for revocation of or the

refusal of the Director to renew said license for a period of one year. The

Director shall seek to refuse to renew or to revoke a business license tax

certificate when a taxpayer has unreasonably refused or neglected to pay

any amounts due or to file an overdue tax returns.

(i) The acceptance of any payment remitted for the renewal of a

business license while there remains unpaid taxes or other license

fees shall not impair or otherwise affect the authority of the

Director to refuse to renew or to revoke a business license tax

against unpaid penalties, then against accrued interest, then

against unpaid tax, and finally against the business license renewal

fee and any penalties accrued under subsection 4 (a) of this Rule.

(f) Failure to obtain a business license tax certificate. In addition to the

penalties imposed by subsection 4 (a), any person who fails to obtain a

business license prior to engaging in any taxable business activity is guilty

of a gross misdemeanor punishable in accordance with Title 12A of the

Seattle Municipal Code.

(g) Suspension or revocation of license. The Director may suspend or revoke

a business license tax certificate pursuant to SMC 5.55.230 (Suspension or

imprisonment not to exceed one (1) year, or by both fine and

imprisonment in accordance with Title 12A of the Seattle Municipal Code.

Seattle Rule 5-002 Business License Tax Certificate Requirements

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to renew its business license tax certificate.

(a) To Close an Account. A taxpayer may close its account either by filing a tax

return clearly and conspicuously marked "final return," or by submitting a

request in writing to the Director to close the account.

(b) To Reactivate an Account. A person resuming business in Seattle may

request that its account be reactivated. A person who has not engaged in

business in the City of Seattle for at least twelve (12) consecutive (12)

months may reactivate a closed account without a penalty for late

payment if payment of the license fee accompanies the application for

reinstatement. (A person reactivating a license within 12 months of

required to operate under or display his or her license; nor shall such other

person operate under or display such license.

(7) Examples:

(a) Example 1: Business X has been engaged in business in the City of Seattle

and registered for several years. Business X reported the following

taxable gross income amounts: $450,000 in 2015 and $600,000 in 2016. In

December of 2017, the City of Seattle mails business X’s 2018 business

taxable amounts.

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default to the fee amount for the lowest tier, in this instance the lowest

fee is $27.50 based on the $55 tier prorated for half a year. Business Y will

receive a renewal notice for 2019 in December 2018. At that time there is

no prior tax reporting history as the business just began in 2018. The

2019 license renewal fee will default to $55. When the business files its

2018 tax return, the 2019 renewal fee will be trued up if the revenue

reported requires a license fee of more than the defaulted $55. Business

Y will be notified of any additional fee.

(c) Example 3: Business MM realizes they need a Seattle business license tax

be notified of any additional fee.

(d) Example 4: Business DD will be starting business in Seattle in 2019.

Business DD is located outside Seattle city limits and has no locations

within Seattle city limits. Business DD does not anticipate doing business

in Seattle that will generate more than $2000in taxable revenue. Business

DD does not need to register for a Seattle business license tax certificate.

Should Business DDs revenue in 2019 exceed $2000, Business DD will

need to contact the Department and register for a Seattle business

license tax certificate.

default to the fee amount for the lowest tier, in this instance the lowest

fee is $27.50 based on the $55 tier prorated for half a year. Business EE is