5.04.095 Business license fee surcharge – Calculation.
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A. In addition to the annual base business license fee set forth in VMC 5.04.090, there shall be a business license fee surcharge calculated as set forth in this section. The business license surcharge fee shall apply to business licenses issued or renewed after expiration on or after January 1, 2007.
B. Effective April 1, 2023, the business license fee surcharge shall be calculated on the basis of $105.00 per employee calculated pursuant to subsection G of this section; provided, that the surcharge will increase annually on January 1st pursuant to the following schedule:
|
Per Employee as Calculated in VMC 5.04.095(G) |
|
|---|---|
|
2023 |
$105.00 |
|
2024 |
$125.00 |
|
2025 |
$145.00 |
|
2026 |
$165.00 |
|
2027 |
$185.00 |
|
2028 |
$205.00 |
|
2029 |
$225.00 |
|
2030 |
$245.00 |
Effective January 1, 2031, the business license fee surcharge provided for by this subsection shall be increased annually pursuant to the methodology set forth in VMC 3.08.100.
1. The revenue from the business license surcharge set forth in subsection B of this section shall be distributed as follows:
a. Eighteen percent of every dollar shall be dedicated to public safety and well-being; and
b. Eighteen percent of every dollar shall be dedicated to parks major maintenance and capital; and
c. Forty percent of every dollar shall be dedicated to new capacity building street improvements; and
d. Twenty-four percent of every dollar shall be dedicated to public infrastructure improvements to facilitate economic development in city limits.
C. Definition of “Employee.” For the purposes of the employee business license fee surcharge, the term “employee” means and includes each of the following persons who are not required by the city to have a separate city of Vancouver business license:
1. Any person who is on the business’ payroll, and includes all full-time, part-time, and temporary employees or workers; and
2. Self-employed persons, sole proprietors, owners, managers, and partners; and
3. Any other person who performs work, services or labor at the business, except:
a. An independent contractor who has a separate city of Vancouver business license;
b. An employee of a temporary employment agency; provided, that such temporary employment agency has a separate city of Vancouver business license and pays the employee business license fee surcharge based on its own employees.
D. A person with some business activities or functions that are exempt from the basic business license fee and some that are not exempt shall pay the employee business license surcharge based on the number of employee hours worked, that are related to the functions or activities that are not exempt.
E. In the event that the taxpayer has a physical location within the city, the employee business license fee surcharge shall be assessed based upon a rebuttable presumption that all of the taxpayer’s employees are working within the city of Vancouver.
F. In the event that the taxpayer has no physical location within the city, the applicable employee portion of the business license fee surcharge shall be based upon the number of employee hours worked within the city calculated based on the total number of employee work hours worked within the city, pursuant to subsection G of this section. The minimum applicable business license fee surcharge for such taxpayer shall be the amount for one employee.
G. Calculating the Number of Employees. In determining the amount of the employee business license fee surcharge to be paid for the upcoming license year, the number of employees shall be the total of the following:
1. Based upon the number of worker hours reportable by the business to the Washington Department of Labor and Industries (L&I) in the last four quarterly reports of the business:
a. The total number of hours worked by all employees, including legal holidays and vacation time, divided by 1,664 hours.
2. For persons who are defined as employees for business license fee surcharge purposes, but for whom the business is not required to report hours to L&I, including but not limited to sole proprietors, owners, managers or partners:
a. The total number of hours worked by all employees, including legal holidays and vacation time, divided by 1,664 hours.
3. The number of employees calculated pursuant to this subsection may exceed the number of people performing work.
4. The director of financial and management services may require the business to submit copies of its L&I reports. The businesses that did not file the report may be required to file an affidavit with the city reporting hours worked or the equivalent number of employees.
H. New Businesses. The employee business license fee surcharge for a business that did not submit reports for each of the last four quarters to L&I shall be based on the estimated number of employees of that business. The business shall provide its estimate of the average number of employees for the upcoming four quarters. The city will determine the number of employees that will be used in calculating the amount of the employee business license fee surcharge. If, during the license year, the city determines that the actual number of employees is more than 20 percent different than estimated, then the amount of the employee business license surcharge will be recalculated for the new business. If the revised employee business license fee surcharge is higher, the business shall pay the difference within 30 days after notification. If the revised surcharge is lower, then the difference will be refunded.
I. Overreporting Number of Employees. A licensee may request that the city refund a portion of the employee business license fee surcharge overpaid on the basis that the business miscalculated the number of employees by more than 20 percent, resulting in payment of an excess surcharge. The request must be in writing and the city must receive the request and all supporting documentation no later than 60 days after the end of the licensee’s business license year in which the error was made. If the city is satisfied that the licensee paid an excess surcharge, then the city will refund the excess surcharge paid by the licensee for the immediately preceding license year.
J. Underreporting of Employees. If the city determines that the number of employees was underreported by more than 20 percent at the time of application or renewal, the business shall pay the balance of the applicable employee business license fee surcharge together with a penalty of 20 percent of such balance due. The business shall also reimburse the city for any accounting, legal, or administrative expenses incurred by the city in determining the underreporting or in collecting the additional amounts. The director of financial and management services shall mail written notice of the amount to be paid and the business shall pay said amount to the city within 30 days.
K. Waiver of Employee Surcharge. To promote business development, the city manager may grant a waiver of the business license fee surcharge provided for herein for businesses which meet the following requirements:
1. The business license fee surcharge may be waived for an initial five-year period from the date of the company’s move or the date of expansion of an existing business if a business relocates 200 or more full-time employees that are earning at least 125 percent of the median individual income to the incorporated area of Vancouver. For purposes of this subsection, median individual income shall be the median individual income in the Portland-Vancouver Metropolitan Statistical Area. The business owner shall commit, through a development agreement approved by city council, to locate a minimum number of new employees in conformance with the business license fee surcharge incentive. The development agreement shall provide that, in the event employment declines below the numbers specified, the fee waiver shall be reimbursed to the city.
Each business that meets this waiver will be required to apply for, or annually renew their existing business license with the State of Washington Business Licensing Service (BLS), pay their business license fee plus pay for one employee surcharge fee at the then-current rate. Separately, the business must provide an annual report to the city of Vancouver with backup documentation demonstrating how the business met the requirements of the surcharge waiver. If the business meets the waiver requirements, the surcharge fee paid at the time of initial application or annual renewal will be refunded. (Ord. M-4390 § 4, 2022; Ord. M-4239 § 5, 2018; Ord. M-4192 § 4, 2017; Ord. M-4140 § 2, 2015; Ord. M-4109 § 1, 2014; Ord. M-3774 § 2, 2006)