AN ORDINANCE relating to the admission tax; providing for an exemption from the admission tax for qualifying music venues and adding a new Section 5.40.028 to the Seattle Municipal Code.

WHEREAS, live music is at the core of every great American city, offering opportunities for musicians to hone their craft and for audiences to learn about, listen to, and appreciate various forms of music; and

WHEREAS, a city rich with concert venues of various sizes that support a wide-variety of musicians offers residents and visitors increased opportunities to experience the power and pleasure of live music; and

WHEREAS, these venues enrich our community and serve as catalysts for economic development; and

WHEREAS, Seattle is recognized as a distinctive center for music where a spirit of innovation continually renews a thriving music industry, both economically and culturally; and

WHEREAS, the vitality and the culture of Seattle are greatly enhanced by our ability to attract and keep local live music venues; and

WHEREAS, to increase Seattle's standing as a live music destination, we must encourage private investment in live music; and

WHEREAS, live music venues are part of a business sector that has greater expenses, regulatory requirements, and liabilities than the average business; and

WHEREAS, providing an admission tax exemption presents minimal risk to the City and provides a valuable incentive for investors to open and operate well-managed music venues; and

WHEREAS, this exemption, along with other pro-music policies, will help create a healthy business environment, leverage Seattle's competitive advantage in the music industry, and bolster economic development throughout the city; NOW THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Effective July 1, 2009, a new section 5.40.028 is added to the Seattle Municipal Code, as follows:

5.40.028 Tax exemption musical venues.

A. The admission tax as imposed in SMC Section 5.40.020 shall not apply to any person paying an admission charge to any premises or location for which the Director has issued a certificate of exemption pursuant to this Section; PROVIDED, however, that the admission tax shall be due for any and all admission charges paid prior to the issuance of a certificate of exemption, or paid after the Director has cancelled a certificate of exemption, or paid at any time during which a cancellation of a certificate of exemption could or should have been in effect under any one or more of paragraphs 1 through 6 of Subsection G of this Section.

B. A premises or location is eligible for a certificate of exemption if:

1. The premises or location has a certificate of occupancy of fewer than one thousand (1,000) persons; and

2. The person conducting or operating the premises or location or any other person authorized by such person hosts or presents live music on at least three (3) separate days per week at the premises or location on a regular schedule. For purposes of this Section, "live music" is defined as an active performance of music by an individual or individuals who, at the time of and during the performance, creates music or engages in an audible form of artistic expression, other than, or in addition to, any pre-recorded music, for an audience through the use or manipulation of voice, instruments, or electronic or computerized equipment or formats; and

3. The person or persons conducting or operating the premises or location or any other authorized person hires one (1) or more musicians to perform the equivalent of sixteen (16) individual performances per week at the premises or location. Repeat performances by the same individual or group shall each be counted. Where performances are by a duo, trio, band, ensemble or other performing group, the number of individual performances shall be determined by multiplying the number of performing group members by the number of performances by the group; and

4. The premises or location is current with all license and tax requirements.

C. A premises or location that has obtained more than three (3) violations of law concerning public health, public safety, noise, licensing, taxing or permitting related to the ownership, possession, occupation, operation, use or maintenance of the location or premises in any twelve (12) month period shall be ineligible for a certificate of exemption for a period of one year from the date of the last violation. For purposes of this Section a premises or location has obtained a violation if there is a legally binding final decision, order, citation, or other finding of violation entered by any court, adjudicative body or government agency against any legal owner, operator, manager, or employee of the premises or location, or any other person hosting or presenting live music at the premises or location.

D. Any person conducting or operating a premises or location seeking a certificate of exemption under this Section, who has not previously been issued a certificate of exemption for the same premises or location, shall present to the Director a copy of the certificate of occupancy required under paragraph B 1 of this Section, and shall submit a completed application for the certificate of exemption on forms and in a manner prescribed by the Director. The application shall contain a certification that the conditions set forth in Subsections B 2 and 3 of this Section will be satisfied during the period that the certificate of exemption is to be in effect, and a separate certification that the premises or location is not ineligible under Subsection C of this Section. The Director shall issue a certificate of exemption for the premises or location, unless the Director finds that the eligibility requirements of Subsections B and C of this Section cannot be met. A certificate of exemption is non-transferable, shall be valid only with respect to the original applicant, and shall apply only to the premises or location that is the subject of the application

E. On a quarterly basis each person to whom a certificate of exemption has been issued shall report, on forms prescribed by the Director, information sufficient to verify that during the corresponding quarter, the premises or location was in compliance with the requirements of this Section, including, but not limited to, the requirements in Subsections B 2 and 3 of this Section, and that the premises or location can continue to meet the requirements. The Director shall establish by rule the information required. The report shall be due in accordance with the provisions pertaining to the quarterly due dates for remittance of tax under SMC Chapter 5.55.

F. Each person to whom a certificate of exemption has been issued shall immediately notify the Director if a premises or location for which a certificate of exemption has been issued fails to be eligible under Subsection C of this Section, or fails to be in compliance with any requirement contained in this Section or any rule or regulation of the Director implementing it, other than those contained in Subsections B 2 or 3 of this Section.

G. The Director shall cancel the certificate of exemption of a location or premises upon a determination by the Director:

1. That a person secured the certificate of exemption by making a false representation in the application for the certificate; or

2. That the premises or location is ineligible for a certificate of exemption under Subsection C of this Section; or

3. That the premises or location is not in compliance with any requirement contained in this Section or any rule or regulation of the Director implementing it other than the requirements contained in Subsections B 2 or 3 of this Section; or

4. That, during any quarterly period, the premises or location fails to host or present live music on at least 80% of the number of days that the premises is required to present live music under Subsection B 2 during that quarterly period; or

5. That, during any quarterly period, the premises or location fails to hire musicians to perform at least 80% of the number of individual performances required under Subsection B 3 during that quarterly period; or

6. That the person to whom the certificate of exemption has been issued no longer conducts or operates the premises or location that is the subject of the exemption.

A person whose certificate of exemption has been cancelled may re-apply for a certificate for the same premises or location, but no re-application shall be approved unless the person shows that the premises or location is eligible under the requirements of this Section and all rules and regulations of the Director implementing it at the time of the reapplication, and further, that the location or premises has been in compliance with Subsections B 2 and 3 of this Section during the 30 day period prior to the re-application. Any person wishing to re-apply shall submit the material required in Subsection D of this Section, which material shall be current as of the date of the re-application, and, in addition, shall submit all information required by the Director as established by rule, including all information required to have been reported pursuant to Subsection E of this Section during any period of time, within the maximum period of limitation applicable under SMC Chapter 5.55 for the assessment of tax, that any previous certificate of exemption was in effect.

H. The Director shall not issue a certificate of exemption to any person who is found by the Director to have made a false representation on any application or re-application made under this Section.

I. Any person to whom a certificate of exemption has been issued shall promptly notify the Director of any change of address. If the Director has cancelled a certificate of exemption, the Director shall provide notice of the cancellation to the person to whom the certificate of exemption was issued by mailing such notice in writing to the address of the person as last reported to the Director. Any person whose certificate of exemption has been cancelled may contest the cancellation by filing a written request for hearing with the Hearing Examiner within ten (10) days after the mailing of the notice of cancellation. If the person whose certificate of exemption has been cancelled files a written request for hearing within the prescribed period, the Hearing Examiner shall schedule and conduct a hearing in accordance with the applicable Hearing Examiner rules.

Section 2. Any act taken pursuant to the authority of this ordinance, and after passage but prior to the effective date of this ordinance, is ratified and confirmed.

Section 3. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of ________________________, 2008, and signed by me in open session in authentication of its passage this

_____ day of ___________________, 2008.

_________________________________

President __________of the City Council

Approved by me this ____ day of _____________________, 2008.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of __________________________, 2008.

____________________________________

City Clerk

(Seal)

James Keblas

OED Admission Tax Musical Venue Exemption 2009 ORD

May 21, 2008

Version #7

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