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ORD 17-831ORDINANCE NO. 17 -831 AN ORDINANCE of the City of Federal Way, Washington, relating to the imposition of an admission tax. WHEREAS, the City of Federal Way is a non - charter code city pursuant to Title 35A RCW; and WHEREAS, RCW 35.21.280 authorizes every city to levy and fix a tax of not more than one cent on twenty cents or fraction thereof to be paid by the person who pays an admission charge to any place; and WHEREAS, the City Council desires to increase revenue to fund its operations and believes that taxing admissions where appropriate will further this goal; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Title 3 of the Federal Way Revised Code is amended to add a new Chapter 3.60, "Admissions Tax," as follows: Chapter 3.60 ADMISSIONS TAX 3.60.010 Levy and amount. There is levied and imposed upon any person who is charged an admission fee to any place, including persons who are admitted free of charge, or at reduced rates, to any place in the amount of five percent of the admission charge, except that no tax in excess of sixty cents ($0.60) per ticket of admission sold shall be collected. No persons shall sell or otherwise distribute tickets of admission which disclose a rate of admission tax other than as provided in this chapter. 3.60.020 Exemptions. The admissions tax as imposed in this chapter shall not apply to anyone paying an admission charge: Ordinance No. 17 -831 Page 1 of 7 1. In the amount of One Dollar and Fifty Cents ($1.50) or less; or 2. To any activity of any elementary or secondary school as contemplated by RCW 35.21.280; or 3. To any activity of any Parent- Teacher Association (PTA), or similar organization, provided that the proceeds of the activity are used to benefit an elementary or secondary school; or 4. To an organized athletic event such as tournaments, leagues, and other competitions intended for youth less than 19years of age, sponsored and held by non - profit organizations; or 5. The admission of spectators to an athletic event, including, but not limited to, football games, basketball games, or baseball games; or 6. The admission for recreational activities, including, but not limited to, golf, skating, or swimming. 3.60.030 Complimentary admissions. Anyone who is admitted free of charge to any place or for any event for which other persons pay an admission charge shall pay an admission tax measured by the full admission charge, unless: 1. Admission is free to the public generally on the date or for the event; or 2. Admission is free to a general classification of the public (e.g., children, senior citizens, or military personnel in uniform) and the entrant is a member of the classification; or 3. The complimentary admissions are distributed for bona fide charitable purposes or through any bona fide charity, or are distributed through any elementary or secondary school; or 4. The persons so admitted are performers, people assisting in the performance or activity, or bona fide members of the press; or 5. The holder of the certificate of registration has paid the amount of the admission tax on the admission. Ordinance No. 17 -831 Page 2 of 7 3.60.040 Discount admissions. Anyone who is admitted at a reduced price to any place or for any event for which other persons pay a regular, higher admission charge shall pay an admission tax measured by the regulars higher admission charge, unless: 1. The reduced charge is based on the quantity sold or a payment made before a calendar date in advance of the event; or 2. The reduced charge is available to a general classification of the public identified in rates posted or published for the event (e.g., children, senior citizens, or military personnel); or 3. The event is scheduled at a time less convenient for the public Le.g., a matinee or midnight performance); or 4. The reduced charge is based on the presentment of a coupon distributed broadly as a notice or advertisement; or 5. The reduced charge results from the donation of tangible personal property (e.g., food, clothing or toys) at the place of admission as an organized collection for delivery to a bona fide charity. In cases that satisfy one (1) or more of these conditions, the admission tax shall be measured based on the reduced charge actually paid for admission. 3.60.050 Collection and remittance of tax. 1. Every person receiving any payment for admission for which a tax is levied under this chapter (Collecting Entity) shall collect the amount of the tax imposed from the person making the admission payment. The tax required to be collected under this chapter shall be deemed to be held in trust by the Collecting_Entity until paid to the Finance Director as provided in this chapter. Any person required to collect the tax imposed under this chapter who fails to collect the same, or having collected the same fails to remit the same to the Finance Director in the manner prescribed by this chapter, shall be personally liable to the city for the amount of such tax, and unless the remittance is made as required in this chapter, is guilty of a violation of this chapter. 2. The tax imposed hereunder shall be collected at the time the admission charge is paid and shall be reported and remitted by the Collecting_Entity to the Finance Director in Ordinance No. 17 -831 Page 3 of 7 monthly installments on or before the fifteenth day of the month following the month in which the tax was collected. Remittance may be made by check, but payment by check shall not relieve the Collecting Entity of liability for remittance of the tax to the city unless the check is honored and is in the full and correct amount. 3. The Collecting Entity shall make out a return upon such forms as the Finance Director may require, showing the amount of the tax upon admissions for which the Collecting Entity is liable from the preceding monthly period, and shall sign and transmit the said forms to the Finance Director, along with a remittance for said amount. 4. Whenever any theater, circus, show, exhibit, entertainment or amusement makes an admission charge, and is subject to the tax levied in this chapter, and the same is of a temporary or transitory nature, of which the Finance Director shall be the judge, the Finance Director may require a report and remittance of the admission tax immediately upon the collection of the same, at the conclusion of the performance or exhibit, or at the conclusion of the series of performances or exhibits, or at such other times as the Finance Director shall determine. 5. Whenever any Collecting Entity stops doing business, transfers ownership, or otherwise terminates the business, any admission tax collected shall become due and payable immediately, and the Collecting Entity shall submit a return form and pay the tax due within ten (10) days of the termination of business. 6. Whenever it appears to the Finance Director that the collection of taxes from any Collecting Entity may be in jeopardy, the Finance Director, after not less than ten (10) days prior written notice to the Collecting Entity, may require that the Collecting Entity remit taxes due at shorter intervals than otherwise prescribed in this chapter. 3.60.050 Certificate of registration. Application and issuance. Any Collecting Entity shall procure from the Finance Director a certificate of registration, the fee for which shall be as defined in the City's Fee Schedule, by applying on a form prescribed by the Finance Director. Certificates of registration shall be valid for twelve months following the issue date of the certificate of registration . Such certificate of registration shall be posted in a conspicuous place where tickets of admission are sold. 3.60.060 Certificate of registration. Transitory events. Whenever a certificate of registration is obtained for the purpose of operating or conducting a temporary or transitory amusement, entertainment or exhibit by persons who are not the owners, lessees or custodians of the building, lots or place where the amusement is to be conducted, the tax imposed by this chapter shall be reported and remitted as provided for in this chapter by said owner, lessee or custodian, unless paid by the person conducting the place. The applicant for a certificate of registration for such purpose shall furnish with the application therefor, the name Ordinance No. 17 -831 Page 4 of 7 and address of the owner, lessee or custodian of the premises upon which the amusement is to be conducted and such owner, lessee or custodian shall be notified by the Finance Director of the issuance of such certificate, by mail or otherwise, and of the joint liability for collection and remittance of such tax. 3.60.070 Record Keeping 1. Each Collecting Entity shall maintain records respecting that activity which truly, completely, and accurately disclose all information necessary to determine the Collecting Entity's tax liability. Such records shall be kept and maintained for a period of not less than three (3) years. 2. All records required to be kept and maintained under this section shall be subject to immediate inspection and audit at any time, with or without notice, at the place where such records are kept upon the demand of the Finance Director, or his or her designee, for the purpose of enforcing the provisions of this chapter. 3. Where a Collecting Entity does not keep all of the required records within the boundaries of the city so that the auditor may examine them conveniently, the Collecting Entity shall either: A. Produce and make available for inspection within the city all of the required records within ten (10) days following a request by the Finance Director or his or her designee that the Collecting Entity do so; or B. Bear the actual cost of inspection by the Finance Director or the designee at the location where the records are located. The Collecting Entity shall pay in advance to the Finance Director the estimated costs thereof, including, but not limited to, round trip fare by the most rapid means, lodging, meals, and incidental expenses. The actual amounts due or to be refunded for expenses shall be determined following the examination of the records. 4. When an admission tax has not been remitted, or when a tax has been paid that is less than that properly due, the Finance Director shall determine the amount of tax due and mail a statement to the Collecting Entity, stating the balance due, including the tax amount and any penalty assessments or fees. It shall be a separate, additional violation of this chapter, both civil and criminal, if the collecting entity fails to make payment in full within ten (10) calendar days of that mailing. 3.60.080 Adoption of additional rules and regulations. Ordinance No. 17 -831 Page 5 of 7 The Finance Director may adopt rules and regulations not inconsistent with the terms of this chapter in order to administer the collection and remittance of the tax levied in this chapter. A copy of such rules and regulations shall be on file and available for public examination in the Finance Director's office. Failure to follow those rules established by the Finance Director shall constitute a violation of this chapter. 3.60.080 Violation. Penalty. Each violation or failure to comply with the provisions of this chapter constitutes a separate offense, conviction of which shall subject a violator to a fine not to exceed five hundred dollars per violation. Section 2. Severability. Should any section, subsection, paragraph, sentence, clause, or phrase of this chapter, or its application to any person or situation, be declared unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of this chapter or its application to any other person or situation. The City Council of the City of Federal Way hereby declares that it would have adopted this chapter and each section, subsection, sentence, clauses, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Section 3. Corrections. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener /clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 4. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 5. Effective Date. This ordinance shall take effect and be in force thirty (30) days from and after its passage, as provided by law. PASSED by the City Council of the City of Federal Way this 17th day of January, 2017. Ordinance No. 17 -831 Page 6 of 7 ATTEST: CITY OF FEDERAL WAY ERK, STEPHANIE C TNEY, CMC APPROVED AS TO FORM: ACTING CITY ATTORNEY) J 141Ah Ca Al FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: Ordinance No. 17 -831 12/29/2016 01/17/2017 01/20/2017 02/16/2017 17 -831 Page 7 of 7