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A. Tax Exemption Thresholds. Any person engaging in any one or more business activities which are otherwise taxable pursuant to BCC 4.09.050(B), whose value of products, gross proceeds of sale, or gross income of business, less applicable deductions and exemptions, is less than or equal to $125,000 for an annual reporting period, regardless of assigned reporting frequency, shall be exempt from taxation under such section. The annual exemption amount may be divided by the assigned filing frequency and applied to each return due and payable during the year. It is the taxpayer’s responsibility to reconcile the exemption taken during the year to the allowable annual deduction. The administrative provisions in BCC 4.03.090 and 4.03.100 apply to any underpayment or overpayment of tax resulting from such reconciliation. In addition, any person whose net taxable income plus receipts from tangible personal property and digital products delivered outside the city is less than or equal to $125,000 shall be exempt from taxation from BCC 4.09.050(A). The exemption level set forth in this subsection shall be administratively adjusted by the director on January 1st of each year, beginning on January 1, 2006, to reflect any change in the cost of living, as defined and calculated pursuant to BCC 4.03.020(B). The amount of the exemption level so calculated shall be rounded to the nearest $5,000.

B. Nonprofit Corporations or Nonprofit Organizations. This chapter shall not apply to nonprofit organizations exempt from federal income tax under Section 501(c)(3), 501(c)(4), or 501(c)(7) of the Internal Revenue Code, as hereafter amended, except with respect to retail sales of such persons.

C. Adult Family Homes. This chapter shall not apply to adult family homes which are licensed as such, or which are specifically exempt from licensing, under rules of the Washington State Department of Social and Health Services.

D. Health Maintenance Organization, Health Care Service Contractor, Certified Health Plan. Beginning on January 1, 2000, this chapter does not apply to any health maintenance organization, health care service contractor, or certified health plan in respect to premiums or prepayments that are taxable under RCW 48.14.0201.

E. Public Utilities. This chapter shall not apply to any person in respect to a business activity with respect to which tax liability is specifically imposed under the provisions of Chapter 4.10 BCC.

F. Gambling Taxes. This chapter shall not apply to any person in respect to a business activity with respect to which tax liability is specifically imposed under the provisions of Chapter 4.14 BCC.

G. Investments – Dividends from Subsidiary Corporations. This chapter shall not apply to amounts derived by persons, other than those engaging in banking, loan, security, or other financial businesses, from investments or the use of money as such, and also amounts derived as dividends by a parent from its subsidiary corporations.

H. International Banking Facilities. This chapter shall not apply to the gross receipts of an international banking facility. As used in this subsection, an “international banking facility” means a facility represented by a set of asset and liability accounts segregated on the books and records of a commercial bank, the principal office of which is located in this state, and which is incorporated and doing business under the laws of the United States or of this state, a United States branch or agency of a foreign bank, an Edge corporation organized under Section 25(a) of the Federal Reserve Act, 12 U.S.C. 611 – 631, or an Agreement corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve System under Section 25 of the Federal Reserve Act, 12 U.S.C. 601 – 604(a), that includes only international banking facility time deposits (as defined in subsection (a)(2) of Section 204.8 of Regulation D (12 CFR Part 204), as promulgated by the Board of Governors of the Federal Reserve System), and international banking facility extensions of credit (as defined in subsection (a)(3) of Section 204.8 of Regulation D).

I. Insurance Business. This chapter shall not apply to amounts received by any person who is an insurer or their appointed insurance producer upon which a tax based on gross premiums is paid to the state pursuant to RCW 48.14.020; and provided further, that the provisions of this subsection shall not exempt any bonding company from tax with respect to gross income derived from the completion of any contract as to which it is a surety, or as to any liability as successor to the liability of the defaulting contractor.

J. Farmers – Agriculture. This chapter shall not apply to any farmer in respect to amounts received from selling fruits, vegetables, berries, butter, eggs, fish, milk, poultry, meats or any other agricultural product that is raised, caught, produced, or manufactured by such persons.

K. Athletic Exhibitions. This chapter shall not apply to any person in respect to the business of conducting boxing contests and sparring or wrestling matches and exhibitions for the conduct of which a license must be secured from the State Boxing Commission.

L. Racing. This chapter shall not apply to any person in respect to the business of conducting race meets for the conduct of which a license must be secured from the Washington State Horse Racing Commission.

M. Real Estate Salesperson and Associate Broker Commissions. Where a real estate brokerage office has paid the gross receipts tax due under this chapter on real estate commissions earned, salespersons or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

N. Ride Sharing. This chapter does not apply to any funds received in the course of commuter ride sharing or ride sharing for persons with special transportation needs in accordance with RCW 46.74.010.

O. Employees.

1. This chapter shall not apply to any person in respect to the person’s employment in the capacity as an employee or servant, as distinguished from that of an independent contractor. For the purposes of this subsection, the definition of “employee” shall include those persons that are defined in the Internal Revenue Code, as hereafter amended.

2. A booth renter is an independent contractor for the purposes of this chapter.

P. Amounts Derived from Sale of Real Estate. This chapter shall not apply to gross proceeds derived from the sale of real estate. This, however, shall not be construed to allow an exemption of amounts received as commissions from the sale of real estate, nor as fees, handling charges, discounts, interest or similar financial charges resulting from, or relating to, real estate transactions.

Q. Mortgage Brokers’ Third-Party Provider Services Trust Accounts. This chapter shall not apply to amounts received from trust accounts to mortgage brokers for the payment of third-party costs if the accounts are operated in a manner consistent with RCW 19.146.050 and any rules adopted by the director of financial institutions.

R. Amounts Derived from Manufacturing, Selling or Distributing Motor Vehicle Fuel. This chapter shall not apply to the manufacturing, selling, or distributing of motor vehicle fuel, as the term “motor vehicle fuel” is defined in RCW 82.36.010 and exempt under RCW 82.36.440; provided, that any fuel not subjected to the state fuel excise tax, or any other applicable deduction or exemption, will be taxable under this chapter.

S. Amounts Derived from Liquor, and the Sale or Distribution of Liquor. This chapter shall not apply to liquor as defined in RCW 66.04.010 and exempt in RCW 66.08.120.

T. Casual and Isolated Sales. This chapter shall not apply to the gross proceeds derived from casual or isolated sales.

U. Accommodation Sales. This chapter shall not apply to sales for resale by persons regularly engaged in the business of making retail sales of the type of property so sold to other persons similarly engaged in the business of selling such property where:

1. The amount paid by the buyer does not exceed the amount paid by the seller to the vendor in the acquisition of the article; and

2. The sale is made as an accommodation to the buyer to enable the buyer to fill a bona fide existing order of a customer or is made within 14 days to reimburse in kind a previous accommodation sale by the buyer to the seller.

V. Taxes Collected as Trust Funds. This chapter shall not apply to amounts collected by the taxpayer from third parties to satisfy third party obligations to pay taxes such as the retail sales tax, use tax, and admission tax.

W. Day Care Homes in Residences. This chapter shall not apply to any “day care homes in residences” as defined in BCC 4.09.030(I).

X. City Exempt from Tax. The city of Bellevue is exempt from the tax levied by this chapter. (Ord. 6604 § 2, 2021; Ord. 6603 § 2, 2021; Ord. 6092 § 12, 2012; Ord. 6091 § 3, 2012; Ord. 5780 § 16, 2007; Ord. 5558 § 14, 2004; Ord. 5436 § 2, 2003.)