Doing Business on Bainbridge Island - City of Bainbridge Island

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4/18/2012 11:27:41 AM
by Kelly Jahraus

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Doing Business on Bainbridge Island

The City of Bainbridge Island requires that all persons doing business on Bainbridge Island be licensed by the city. Businesses with gross earnings of more than $200,000 earned on Bainbridge Island are subject to the City's business & occupation tax. Commercial parking businesses are subject to the commercial parking tax. Read below for more information.

December 2011 - this letter regarding license renewal and business and occupation tax reporting was sent to all licensed businesses with an email address on file.

Business License

Who needs a business license?

Anyone engaged in or soliciting business within the City or using either a business telephone number or business address within the City must have a business license. A new business must apply for a business license before commencing operation.

How do I apply?
A business license application must be completed and returned to the City with the payment ($65 per calendar year). Your application will be reviewed for compliance with legal, zoning and signage requirements. If there is a problem with any one of these, or further information is needed, the applicant will be notified. If approved, the license will be mailed to the applicant. This process may take three weeks.

Do I also need a master business license from the State?
Yes. The State Department of Revenue issues a "Uniform Business Identification" number (UBI) upon receipt of your master business license application.

Do I need to renew my license annually?
Yes. Business licenses expire on December 31 of the year issued and must be renewed by the last day in February of the following year. Renewal forms are mailed in December. You have until the end of February to pay before it is considered late. Penalties start on March 1.

What if my business moves to a new location?
Please send a letter or email confirming your old address and new address and the date that you moved. A new license will be sent without charge once compliance with legal, zoning, and signage requirements has been assured.

What if I sell my business?
The business license issued under this ordinance is personal and non-transferable. No license shall allow another person to operate a business under the license. The new owner must apply for a new license. Please advise us when you sell your business - we cannot license a new owner without first receiving confirmation that the business has sold.

Where do I post my license?
The business license must be posted in clear public view in the place of business for which it is issued.

What are the business license fees?

Initial Application: $65
Renewal: $65
Renewal on or after March: $65 plus a penalty of 10% of fee per month delinquent, but not more than the initial fee for each year owing (Ordinance 99-28)

How do I cancel my business license?
All you have to do is email, mail or fax a letter or a copy of your license requesting that your business license be cancelled. Be sure to sign and date your request and include effective date of cancellation.

What are the special business license categories?

Amusement Game: $25
BIMC 5.12: Billiard, pool and foosball. License expires on February 28 of each year.
Jukebox: $100+$10/jukebox
BIMC 5.28: License expires December 31 of each year.
Games of Skill: $25+$50/game
BIMC 5.24: Includes video games. Expires 12/31 of each year.

Cabaret: $60
BIMC 5.16: Any room, place or space in the city open for service to the public in which the guests, patrons, entertainers or other persons are allowed to dance, sing, or perform music or live entertainment, including comedy in connection with the restaurant business or the business of directly or indirectly selling food or refreshments, including alcoholic beverages.

In addition, there is a penalty for late applications for special businesses of 10% of fee per month delinquent (Ordinance 92-10).

Business & Occupation Tax

Under Washington law (RCW 35.21 as amended by 2003 HB 2030), cities charging a business & occupation tax are required to adopt a model ordinance providing a degree of standardization in the definitions and practices used by Washington cities. On October 27, 2004, the City of Bainbridge Island adopted Ordinance 2004-16 and also Ordinance 2004-17, covering the administrative procedures to be used in matters relating to this tax. The City's business license provisions are contained in its municipal code (BIMC Chapter 5.04).

The City's procedures for charging its business and occupation taxes include the following:

Taxes are collected annually on or before the last day of February for the preceding calendar year.
Tax forms are mailed by the City to all licensed businesses with license renewals in January.
All businesses are charged the same tax rate (currently 0.1%) regardless of the type of business.
Rather than charging a tax on gross receipts, the City of Bainbridge Island allows all the deductions allowed by the State of Washington on its business & occupation tax. In addition, many types of revenue are exempt for taxation (see BIMC 5.05.090).
The City exempts the first $200,000 of taxable revenue annually (the exemption level was $250,000 prior to 2011).
Businesses with less than $100,000 in annual taxable revenue are not required to submit a tax return, but should indicate the amount of revenue on their business license renewal form.
Persons buying businesses on Bainbridge Island are responsible for any unpaid tax of the seller unless the buyer has obtained clearance from the City.

Browse the most current FEE SCHEDULE

The City of Bainbridge Island believes that all of the provisions in its business & occupation tax ordinances are consistent with HB 2030, although the City has taken advantage of some of the optional provisions of that law to make its business & occupation tax more business-friendly.

Other Taxes - Commercial Parking

Anyone engaged in a commercial parking business in the city is required to pay a commercial parking tax per BIMC 5.10. The commercial parking tax rate is 30% and payments - accompanied by the reporting form - are due in quarterly installments.

Please contact the Finance & Administrative Servcies Department with any questions about licensing requirements for doing business on Bainbridge Island (780-8668)

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