Seattle Rule 5-127
Sales to, and by, the State of Washington, counties, cities, school districtsand other municipal subdivisions.
(1) Business license tax on sales to governmentalentities. In computing the business license tax, no deduction is allowed to
aseller with respect to sales to the Federal Government, its departments andinstitutions, to the State of Washington, its departments and institutions, orto counties, cities, or other municipal corporations of the State.
(2) Enterprise activity defined. An "enterprise activity,"for the purposes of this rule, is a government activity
financed and operatedin a manner similar to private business enterprises. The term includesactivities which are generally in competition with private business enterprisesand are over fifty percent funded by user fees, such as utility payments, parkor
recreation rentals and fees. The term "enterprise activity" doesnot include activities which are exclusively governmental.
(3) Business license tax on sales by governmentalentities. The City of Seattle may not impose the business license tax on
salesmade by the federal government and its subdivision, or on sales made by theState of Washington and its subdivisions, including other municipalities.However, all City of Seattle departments, divisions, and its other municipalsubdivisions engaging in
business through enterprise activities are subject totax (SMC 5.45.110) as follows:
(a) Service and other business activities. Amountsderived from enterprise activities consisting of or from admission fees
tospecial events, user fees (lockers, checkrooms), moorage fees (less than thirtydays), and the granting of a license to use real property are reportable underthe service and other business activities classification of the business licensetax and
taxable upon the gross income derived from services rendered by them toothers.
(b) Retailing. Amounts derived from enterprise activitiesconsisting of or from fees for participation in amusement,
recreation orphysical fitness activities (pay for play), user fees for off-street parkingand garages, and charges for the sale and rental of tangible personal propertyare reportable under the retailing classification of the business license taxand
taxable upon the gross proceeds of sales.
The retailing tax also applies to charges for the sale ofbooks, rules, regulations, and other materials sold from an
inventory of suchthings, even though the charge is required by law or covers only the costs ofproduction and distribution.
The retailing tax does not apply to charges for theproduction, searching, or copying of public records or documents by such
publicagencies charged with the responsibility to keep and provide such information.
(c) Extracting or manufacturing. Extracting ormanufacturing activities, if conducted as an enterprise activities are
taxableupon the value of products manufactured or extracted.
(4) Exemptions and exclusions.
(a) Amounts derived from fees or charges for activitiesthat represent traditional government services as opposed to
the"enterprise activities" as defined above are tax exempt. Such taxexempt amounts include fees for on-street metered parking and parking permits,instruction fees, license fees, health program fees, athletic team registrationfees, and
interagency and intergovernmental charges for services rendered.
(b) The business license tax does not apply to the valueof materials printed solely for their own use by city departments,
divisions,employee associations, other municipal subdivisions, or libraries.
(5) Contracts with the City of Seattle and organizationscharter by the City. All persons entering into contracts with the
City ofSeattle are required to obtain and maintain a current Business License TaxCertificate and remit business license tax before accepting any warrant aspayment for performing any contract for the City of Seattle (see SMC 5.45.060(D. Business license
tax is due on all contracts with the City of Seattle,subject to the annual threshold prescribed in SMC 5.55.040 (D). It is presumedthat all contracts with the City of Seattle are executed within the City. Taxis due whether or not the business activity,
services rendered, or constructionwork takes place within or outside the City. This section applies to the Cityand organizations chartered by the City. This subsection shall not apply toindividuals whose aggregate value of all contracts with the City
during acalendar year is $5,000 or less and does not otherwise engage in businesswithin the city; or whose only source of revenue consists of contract with theCity of Seattle for neighborhood planning purposes, sister city associations,or Arts
Commission grants.
DIRECTOR'S CERTIFICATION
I, Glen M. Lee, Finance Director of the City ofSeattle, do hereby certify
under penalty of perjury of law, that the within andforegoing is a true and
correct copy as adopted by the City of Seattle,Department of Finance and
Administrative Services.
DATED this ______ day of July 2016.
CITY OF SEATTLE,
a Washingtonmunicipality
By: ____________________________________
Glen M. Lee,Finance Director
Department ofFinance and Administrative Services
Effectivedate: July 14, 2016