#Section 280 of the public utilities code code#
326 (2014) that code cities may impose taxes on other municipalities providing utility services within their boundaries, on revenues derived from their proprietary activities.
City of Federal Way (2020) – Affirms lower court case City of Wenatchee v. Lakehaven Water & Sewer District et al.City of Seattle, 161 Wn.2d 129 (2007) – States that “the Cities could have generated revenue for their general funds through the imposition of a utility tax on their own municipal utilities” Vancouver, 113 Wn.2d 800 (1989) – Court upheld utility tax imposed by city on its water and sewer utility where the measure of the tax was gross revenues derived by the utility from providing service to both resident and nonresident customers. RCW 82.14.230 – Brokered natural gas use tax.RCW 54.28.070 – Cities and towns may tax public utility districts (PUDs) that operate works, plants, or facilities within the city/town for the sale of electricity.RCW 35.21.870 – Establishes 6% maximum utility tax rate for electricity, natural gas, steam, and telephone utilities, unless higher rate is approved by voters.The authority of cities and towns to impose a utility tax derives from their general authority to impose excise taxes on businesses operating within their boundaries, with some statutes and court decisions providing additional authority and clarification. Cities must be mindful of this subtle but important difference.įor more details, see our blog post Are You Calculating Your City Utility Tax Correctly? City-owned/operated utilities will often break out the amount of the utility tax on a customer’s bill, which frequently creates confusion about who is being taxed and can cause miscalculation of the utility tax. Practice Tip: Utility taxes, like other business & occupation taxes, are imposed upon the utility business itself, and not upon the individual utility customers.
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