ACC 3.53.020 (K) “Engaging in business”:

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.

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 register and obtain a business license or pay City business and occupation taxes. The activities listed in this section are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection 1. 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 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 person 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 and pay tax:

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 ACC Chapter 2.23 Special Event Permits.
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 4.

6.  The City expressly intends that engaging in business include any activity sufficient to establish nexus for purposes of applying the tax 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.

All businesses are subject to the business and occupation (B&O) tax unless specifically exempted by Auburn City Code (ACC). A City’s tax return must be filed if a business is below Auburn’s tax exemption levels, but there will be no tax due. Tax is due to the businesses who exceed the exemption levels & thresholds.
First, you would need to determine if your annual gross companywide income will be equal or more of the City’s $500,000 threshold and/or equal or exceed the Square Footage Tax Thresholds: Business Warehouse Floor Space - 4,000 taxable square feet & Outdoor Warehouse Space -261,360 taxable square feet.

In general, most businesses will report in the gross receipts business tax category. A number of businesses will report in the square footage tax category. A limited number of businesses will report in both categories; however, the tax will be due on only one of those two B&O categories – whichever is higher!

Chapter 3.53.020 (O) Auburn City Code (ACC) “Gross income of the business” means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.

When you concluded that your business would owe B&O tax to the city, next step is to determine under what tax classification to file your city taxable revenue. Refer to ACC 3.53.040 (A) Auburn City Code.

Lastly, you may estimate your tax owed by multiplying the city taxable revenue (gross income minus applicable deductions and credits) by the tax rate (or rates, if filing under multiple tax categories) by using the tax rate table on the B&O Tax page.

Example: A small retail business operating in Auburn that collects $750,000 in gross receipts annually, with 100% of its sales occurring in Auburn, and has no qualifying tax exemptions and deductions, would compute their annual tax liability as follows:
$750,000 X .0005 = $375. This businesses annual B&O tax liability will total $375.

ACC 3.53.020 (J) “Eligible gross receipts tax”

The term “eligible gross receipts tax” means a tax which:

1. Is imposed on the act or privilege of engaging in business activities within section ACC 3.53.040; and
2. Is measured by the gross volume of business, in terms of gross receipts and is not an income tax or value added tax; and
3. Is not, pursuant to law or custom, separately stated from the sales price; and
4. Is not a sales or use tax, business license fee, franchise fee, royalty or severance tax measured by volume or weight, or concession charge, or payment for the use and enjoyment of property, property right or a privilege; and
5. Is a tax imposed by a local jurisdiction, whether within or without the State of Washington, and not by a country, state, province, or any other non-local jurisdiction above the county level.

ACC 3.53.110 Deductions.

This is a list of deduction only. For details about each deduction refer to the ACC 3.53.110.

A. Membership Fees and Certain Service Fees By Non-Profit Youth Organization. 
B. Fees, Dues, and Charges Received by Non-Profit Organizations. In computing tax, a non-profit organization may deduct from the measure of tax amounts derived from bona fide:

1. Initiation fees;
2. Dues;
3. Contributions;
4. Donations;
5. Tuition fees;
6. Charges made for operation of privately operated kindergartens;
7. Charges made by a non-profit trade or professional organization for attending or occupying space at a trade show, convention, or educational seminar sponsored by the non-profit trade or professional organization, which trade show, convention, or educational seminar is not open to the general public; and
8. Endowment funds.

C. Artistic and Cultural Organizations - Income From Business Activities. 
D. Artistic or Cultural Organization - Deduction For Tax Under the Manufacturing Classification - Value of Articles For Use In Displaying Art Objects or Presenting Artistic or Cultural Exhibitions, Performances, or Programs. 
E. Day Care Activities. 
F. Compensation from public entities for health or social welfare services – exception. 
G. Interest on Investments or Loans Secured By Mortgages or Deeds of Trust. 
H. Interest on Obligations of the State, its Political Subdivisions, and Municipal Corporations. 
I. Interest on Loans to Farmers and Ranchers, Producers or Harvesters of Aquatic Products, or Their Cooperatives. 
J. Receipts From Tangible Personal Property Delivered Outside the State. 
K. Cash Discount Taken by Purchaser. 
L. Credit Losses of Accrual Basis Taxpayers. 
M. Repair, Maintenance, Replacement, etc., of Residential Structures and Commonly Held Property - Eligible Organizations.
N. Radio and Television Broadcasting - Advertising Agency Fees - National, Regional, and Network Advertising - Interstate Allocations. 
O. Constitutional Prohibitions. 
P. Receipts from the Sale of Tangible Personal Property and Retail Services Delivered Outside the City but Within Washington.
Q. Professional Employer Services. 
R. Amounts Derived from the Sale or Lease of Clean Alternative Fuel and Plug-in Hybrid Vehicle Sales.  

If the gross receipts are derived from long term (30 days or longer) rental income, you are exempt. However, if you have any income that does not fall into that category, like management fees, maintenance & repair services, etc. you would need to submit the city B&O tax return and pay tax on non-exempt revenue, only if your companywide gross receipts exceed the filing threshold of $500,000. If you determine that you are exempt, there is no further action needed from you at this time and you will not be required to report, file, or pay B&O tax in Auburn.

If your business meets the $500,000 annual gross companywide revenue threshold, you are responsible for reporting, filing or paying Gross Receipts B&O tax in Auburn on the taxable revenue generated within the city limits. If your business occupies more than 4,000 square feet of warehouse space, and/or 261,360 square feet of outdoor warehouse space, you will be a subject to a Square Footage B&O tax. However, you will not be subject to both the gross receipts tax and the square foot tax, only the greater of the two.

No. If your companywide gross receipts exceed $500,000 you will need to report, file and pay. However, any receipts collected outside of Auburn will be deducted from calculating your tax liability in Auburn:

City of Auburn Multipurpose Tax return - Column 2 companywide revenue – (minus) Column 3 deductions (P.S. to deduct the revenue generated outside of the Auburn city limits, use Sales Delivered Outside of Auburn deduction) = Column 4 taxable revenue x Column 5 tax rate = Column 6 tax due).

For example:
Companywide Retailing gross receipts = $700,000
Gross receipts outside of Auburn = $400,000
Tax will be calculated on the $300,000 in gross receipts generated in Auburn
Tax due $300,000 x 0.0005 = $150

Yes. There are areas of incorporated Auburn that fall within both Pierce and King Counties. The City of Auburn B&O tax is applicable in all of incorporated City of Auburn, in both counties for all 3 city location codes:

• 1702 for Auburn / King County
• 2724 Auburn / Pierce County
• 4002 Auburn/King Non-RTA

B&O is due for the businesses located and/or conducting the business activities within the city limits. To verify if your business within the city limits, you may use this City Limit Tool.