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</head><body><p>It's an excellent question. And I am hoping that somebody smarter than I am will be able to answer it. Preferably somebody with a background in taxation. For the time-being, I think the starting point is that local governments may impose regulatory fees under their police powers so long as the subject matter is local. And the scope of police power is broad, so long as the subject of the regulation (and the corresponding fee) bears a "reasonable and substantial relation to promotion of the general welfare of the people." Business license are regulatory by nature - local governments use them as a vehicle to regulate land use, fire code enforcement, and other subjects (think marijuana sales, for example.) On the other hand, local governments may impose a tax only pursuant to specific and explicit legislative or constitutional authority. We know all of this because of Covell v. City of Seattle, 127 Wn.2d 874, 905 P.2d 324 (1995). Covell cites three factors to decide if a charge is a fee or a tax, and its progeny have tried to explain what Covell really meant. But I think it really comes down to location. So if the business activity is predominantly taking place within a local government's boundaries, the activity is subject to local regulation, and may be licensed. In other words, a lawyer or an accountant who has an office within Tacoma City limits will need a business license, while a lawyer or accountant who only has a client - but not an office - will not need a local business license. On the other hand, an electrician who provides services within the city will need a license even though the electrician does not have a shop in town, but the electrician driving into town to pick up electrical supplies will not need a license so long as no physical labor is performed. And I'm not sure how FedEx or UPS fits into the equation, or lawyers who travel to a distant courthouse to argue a case. Or whether independent contractors, such as real estate brokers, should each have an individual business license.</p><p><em><br></em></p><p><em></em></p><p><br></p><p></p><blockquote type="cite"><!-- [if gte mso 9]> --><!-- <![endif] --><!-- [if gte mso 9]> --><!-- <![endif] -->On July 18, 2016 at 5:47 PM "Douglas W. Scott" <doug@davisscottlaw.com> wrote:<br><br><div class="ox-aa0683f59f-WordSection1"><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri','sans-serif';" calibri="Calibri" sans-serif="sans-serif">Thanks for your reply. The excise tax will be levied on the location of the property. As to the need to register to do business in Tacoma, by analogy, if I represent a business in Tacoma and provide legal advice concerning that business, should I have to register to do business in Tacoma? Or if a Puyallup electrician works on a Tacoma home, is he required to register in Tacoma? </span></p><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri','sans-serif';" calibri="Calibri" sans-serif="sans-serif"> </span></p><div><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 11.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Douglas W. Scott</span></p><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Law Offices of Douglas W. Scott</span></p><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Windermere Building</span></p><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 11.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">1810 15th Place NW, Suite 203<br> Issaquah, Washington, 98027<br> V. 425.392.8550<br> F. 425-392-2829 </span></p><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif"><a href="http://www.davisscottlaw.com/">www.davisscottlaw.com</a></span></p></div><p class="ox-aa0683f59f-MsoNormal"><span style="font-size: 11.0pt; font-family: 'Calibri','sans-serif';" calibri="Calibri" sans-serif="sans-serif"> </span></p><div><div style="border: none; border-top: solid #B5C4DF 1.0pt; padding: 3.0pt 0in 0in 0in;"><p class="ox-aa0683f59f-MsoNormal"><strong><span style="font-size: 10.0pt; font-family: 'Tahoma','sans-serif';" tahoma="Tahoma" sans-serif="sans-serif">From:</span></strong><span style="font-size: 10.0pt; font-family: 'Tahoma','sans-serif';" tahoma="Tahoma" sans-serif="sans-serif"> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com] <strong>On Behalf Of </strong>scott scottgthomaslaw.com<br> <strong>Sent:</strong> Monday, July 18, 2016 5:09 PM<br> <strong>To:</strong> WSBA Real Property Listserv<br> <strong>Subject:</strong> Re: [WSBARP] City tax on real estate sales</span></p></div></div><p class="ox-aa0683f59f-MsoNormal"> </p><p>Yes, a city may require a license to conduct business within its jurisdiction. RCW 35.22.280 (32). Tacoma is a first class city. There are two real estate excise taxes that may be levied by local government - REET 1 and REET 2 - pursuant to RCW 82.46.010 and 035. There is no authority to tax real estate commissions, which sounds suspiciously like an income tax.</p><blockquote><p class="ox-aa0683f59f-MsoNormal" style="margin-bottom: 12.0pt;">On July 18, 2016 at 3:58 PM "Douglas W. Scott" <<a href="mailto:doug@davisscottlaw.com">doug@davisscottlaw.com</a>> wrote:</p><div><p class="ox-aa0683f59f-ox-5f5835670a-msonormal">I represent a real estate company outside of Tacoma. Tacoma saw a For Sale sign from my client within their city limits and has said that all persons that engage in business in Tacoma must apply for a city business license. I imagine that in addition to a fee for this license they will want to charge a city tax on whatever commissions are derived from a real estate sale. My client has no office within Tacoma. Can Tacoma do that?</p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"> </p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"><span style="font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Douglas W. Scott</span></p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Law Offices of Douglas W. Scott</span></p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">Windermere Building</span></p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"><span style="font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif">1810 15th Place NW, Suite 203<br> Issaquah, Washington, 98027<br> V. 425.392.8550<br> F. 425-392-2829 </span></p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"><span style="font-size: 10.0pt; font-family: 'Arial','sans-serif';" arial="Arial" sans-serif="sans-serif"><a href="http://www.davisscottlaw.com/">www.davisscottlaw.com</a></span></p><p class="ox-aa0683f59f-ox-5f5835670a-msonormal"> </p></div></blockquote><p><br> </p><blockquote><p class="ox-aa0683f59f-MsoNormal">_______________________________________________<br> WSBARP mailing list<br> <a href="mailto:WSBARP@lists.wsbarppt.com">WSBARP@lists.wsbarppt.com</a><br> <a href="http://mailman.fsr.com/mailman/listinfo/wsbarp">http://mailman.fsr.com/mailman/listinfo/wsbarp</a></p></blockquote></div></blockquote><p><br> </p><blockquote type="cite">_______________________________________________<br>WSBARP mailing list<br>WSBARP@lists.wsbarppt.com<br>http://mailman.fsr.com/mailman/listinfo/wsbarp</blockquote></body></html>