Ordinance No. 2023-01 Relating to Business Licenses Amending Chapter 5.04 BIMC (Adopted 011023)Page 1 of 6
ORDINANCE NO. 2023-01
AN ORDINANCE of the City of Bainbridge Island, Washington, relating to
business licenses and amending Sections 5.04.020, 5.04.030, 5.04.080, and
5.04.090 of the Bainbridge Island Municipal Code to eliminate the requirement for
a business license unless the annual de minimis gross income threshold is met.
WHEREAS, the City of Bainbridge Island requires certain businesses to obtain business
licenses; and
WHEREAS, the City of Bainbridge Island administers its business licensing through the
state’s business license system (“BLS”); and
WHEREAS, the state’s gross income requirement threshold to register with the
Washington State Department of Revenue and obtain a business license is $12,000; and
WHEREAS, the City of Bainbridge Island previously has had no broadly applicable de
minimis gross income activity threshold for obtaining a business license; and
WHEREAS, the City desires to decrease the administrative burden for both business
license applicants and City staff by establishing a de minimis gross income activity threshold for
obtaining a business license.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE
ISLAND, WASHINGTON, DOES ORDAIN AS FOLLOWS:
Section 1. Section 5.04.020 of the Bainbridge Island Municipal Code is hereby amended
to read as follows:
5.04.020 Definitions and presumption.
A. This chapter incorporates by reference all definitions set forth in Chapter 82.04 RCW,
hereafter amended, except where a conflicting definition is stated in this chapter.
B. “Director” means the director of finance and administrative services for the city.
C. “Business Licensing Service” or “BLS” is the office within the Washington State Department
of Revenue providing business licensing services to the city.
D. “Engaging in business” is defined as follows:
1. The term “engaging in business” means commencing, conducting, or continuing in
business, and also the exercise of corporate or franchise powers, as well as liquidating a
business when the liquidators thereof hold themselves out to the public as conducting such
business.
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2. This section sets forth examples of activities that constitute engaging in business in the
city and establishes safe harbors for certain of those activities so that a person who meets
the criteria may engage in de minimis business activities in the city without having to pay a
business license fee obtain a business license from the city. The activities listed in this
section are illustrative only and are not intended to narrow the definition of “engaging in
business” in subsection D.1 of this section. If an activity is not listed, whether it constitutes
engaging in business in the city shall be determined by considering all the facts and
circumstances and applicable law.
3. Without being all-inclusive, any one of the following activities conducted within the city
by a person, or its employee, agent, representative, independent contractor, broker or
another acting on its behalf constitutes engaging in business and requires a person to
register and obtain a business license.
a. Owning, renting, leasing, maintaining, or having the right to use, or using, tangible
personal property, intangible personal property, or real property permanently or
temporarily located in the city.
b. Owning, renting, leasing, using, or maintaining an office, place of business, or other
establishment in the city.
c. Soliciting sales.
d. Making repairs or providing maintenance or service to real or tangible personal
property, including warranty work and property maintenance.
e. Providing technical assistance or service, including quality control, product
inspections, warranty work, or similar services on or in connection with tangible
personal property sold by the person or on its behalf.
f. Installing, constructing, or supervising installation or construction of real or tangible
personal property.
g. Soliciting, negotiating, or approving franchise, license, or other similar agreements.
h. Collecting current or delinquent accounts.
i. Picking up and transporting tangible personal property, solid waste, construction
debris, or excavated materials.
j. Providing disinfecting and pest control services, employment and labor pool
services, home nursing care, janitorial services, appraising, landscape architectural
services, security system services, surveying, and real estate services, including the
listing of homes and managing real property.
k. Rendering professional services such as those provided by accountants, architects,
attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball
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clubs and other sports organizations, chemists, consultants, psychologists, court
reporters, dentists, doctors, detectives, laboratory operators, teachers, veterinarians.
l. Meeting with customers or potential customers, even when no sales or orders are
solicited at the meetings.
m. Training or recruiting agents, representatives, independent contractors, brokers or
others, domiciled or operating on a job in the city, acting on its behalf or for
customers or potential customers.
n. Investigating, resolving, or otherwise assisting in resolving customer complaints.
o. In-store stocking or manipulating products or goods, sold to and owned by a
customer, regardless of where sale and delivery of the goods took place.
p. Delivering goods in vehicles owned, rented, leased, used, or maintained by the
person or another acting on its behalf.
4. If a person, or its employee, agent, representative, independent contractor, broker or
another acting on the person’s behalf, engages in no other activities in or with the city but
the following, it need not register and obtain a business license.
a. Meeting with suppliers of goods and services as a customer.
b. Meeting with government representatives in their official capacity, other than those
performing contracting or purchasing functions.
c. Attending meetings, such as board meetings, retreats, seminars, and conferences, or
other meetings wherein the person does not provide training in connection with
tangible personal property sold by the person or on its behalf. This provision does not
apply to any board of director member or attendee engaging in business such as a
member of a board of directors who attends a board meeting.
d. Renting tangible or intangible property as a customer when the property is not used
in the city.
e. Attending, but not participating in a trade show or multiple vendor events. Persons
participating at a trade show shall review the city’s trade show or multiple vendor
event ordinances.
f. Conducting advertising through the mail.
g. Soliciting sales by phone from a location outside the city.
5. A seller located outside the city merely delivering goods into the city by means of
common carrier is not required to register and obtain a business license; provided, that it
engages in no other business activities in the city. Such activities do not include those in
subsection D.4 of this section.
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The city expressly intends that engaging in business include any activity sufficient to establish
nexus for purposes of applying the license fee under the law and the Constitutions of the United
States and the state of Washington. Nexus is presumed to continue as long as the taxpayer
benefits from the activity that constituted the original nexus-generating contact or subsequent
contacts.
Section 2. Section 5.04.030 of the Bainbridge Island Municipal Code is hereby amended to
read as follows:
5.04.030 License required.
Every person who engages in business activities within the city must obtain a city business
license for the privilege of engaging in business within the city. The fee for the business license
shall be in the amount established by resolution of the city council. No person shall engage in
any business for which a business license is required under this chapter without being so
licensed, regardless of the amount of income received, except as otherwise provided in this title.
Section 3. Section 5.04.080 Exempt Activities.
5.04.080 Exempt activities.
The following activities shall be exempt from the licensing provisions of this chapter:
A. The exercise of governmental functions performed by any instrumentality of the United
States, the state of Washington, or any political subdivision thereof;
B. Farmers or gardeners selling their own farm products raised and grown exclusively upon
lands owned or occupied by them;
C. Garage sales conducted on residential premises in compliance with this code;
D. The mere delivery of goods or services to the customer or client by businesses where the sale
occurred on business premises outside of the city, and was the only event occurring within the
city except that the performance of contracting or subcontracting services is not an exempt
activity; or
E. Any business activity which is owned and operated solely by a person under the age of 18,
and which does not generate a gross income of more than $2,500 per year. by any person or
business whose annual value of products, gross proceeds of sales, or gross annual income of the
business within the city is $3,000 or less.
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Section 4. Section 5.04.090 of the Bainbridge Island Municipal Code is hereby amended
to read as follows:
5.04.090 Payment of license fees.
A.There shall be a license fee imposed for the privilege of doing business as set by resolution of
the city council.
B.Payment of the fee imposed by this chapter shall be due on or before the commencement of
business and for renewal of the license on or before the expiration date of the license.
C.On or before the due date, every person required to pay a license fee or a tax as set forth by
this chapter shall file a license renewal with the Business Licensing Service, or, for taxes, a
written return with the city upon such form and including such information as the director shall
require, together with the payment of the amount of the tax.
D.Nonprofit activities carried on by religious, charitable, educational, benevolent, fraternal or
social organizations which have been determined by the Internal Revenue Service of the United
States to be exempt from the payment of income tax shall be exempt from the license fee.
E.Any person or business 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 shall be exempt from the license
fee.
Section 5. Should any section, paragraph, sentence, clause, or phrase of this ordinance
conflict with the terms of any prior ordinance or resolution, including terms related to fee or
charge adjustments, the terms of this ordinance shall control.
Section 6. Severability. Should any section, paragraph, sentence, clause, or phrase of
this ordinance, or its application to any person or circumstance, be declared unconstitutional or
otherwise invalid for any reason, or should any portion of this ordinance be preempted by state
or federal law or regulation, such decision or preemption shall not affect the validity of the
remaining portions of this ordinance or its application to other persons or circumstances.
Section 7. This ordinance shall take effect and be in force five (5) days from its passage
and publication as required by law.
PASSED by the City Council this 10th day of January 2023.
APPROVED by the Mayor this 10th day of January 2023.
Brenda Fantroy-Johnson, Mayor
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ATTEST/AUTHENTICATE:
Christine Brown, MMC, City Clerk
FILED WITH THE CITY CLERK January 5, 2023
PASSED BY THE CITY COUNCIL January 10, 2023
PUBLISHED: January 20, 2023
EFFECTIVE DATE: January 25, 2023
ORDINANCE NO: 2023-01