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<DIV>I agree with this with one exception. I believe only the Supreme
Court can license attorneys and as a result I have always thought that a city
could not demand a license of a law firm. 3rd branch of government
violation?</DIV>
<DIV> </DIV>
<DIV>Josh</DIV>
<DIV> </DIV>
<DIV style="FONT-SIZE: 12pt; FONT-FAMILY: 'Calibri'; COLOR: #000000">Joshua F.
Grant, PS<BR>Attorney at Law<BR>P. O. Box 619<BR>Wilbur, WA 99185<BR>tel 509 647
5578<BR>fax 509 647 2734<BR></DIV>
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<DIV style="font-color: black"><B>From:</B> <A title=scott@scottgthomaslaw.com
href="mailto:scott@scottgthomaslaw.com">scott scottgthomaslaw.com</A> </DIV>
<DIV><B>Sent:</B> Monday, July 18, 2016 9:10 PM</DIV>
<DIV><B>To:</B> <A title=wsbarp@lists.wsbarppt.com
href="mailto:wsbarp@lists.wsbarppt.com">WSBA Real Property Listserv</A> </DIV>
<DIV><B>Subject:</B> Re: [WSBARP] City tax on real estate
sales</DIV></DIV></DIV>
<DIV> </DIV></DIV>
<DIV
style='FONT-SIZE: small; TEXT-DECORATION: none; FONT-FAMILY: "Calibri"; FONT-WEIGHT: normal; COLOR: #000000; FONT-STYLE: normal; DISPLAY: inline'>
<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> </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: 11pt; FONT-FAMILY: 'Calibri','sans-serif'"
sans-serif="sans-serif" calibri="Calibri">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: 11pt; FONT-FAMILY: 'Calibri','sans-serif'"
sans-serif="sans-serif" calibri="Calibri"></SPAN> </P>
<DIV>
<P class=ox-aa0683f59f-MsoNormal><SPAN
style="FONT-SIZE: 11pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">Douglas W. Scott</SPAN></P>
<P class=ox-aa0683f59f-MsoNormal><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">Law Offices of Douglas W.
Scott</SPAN></P>
<P class=ox-aa0683f59f-MsoNormal><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">Windermere Building</SPAN></P>
<P class=ox-aa0683f59f-MsoNormal><SPAN
style="FONT-SIZE: 11pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">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: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial"><A
href="http://www.davisscottlaw.com/">www.davisscottlaw.com</A></SPAN></P></DIV>
<P class=ox-aa0683f59f-MsoNormal><SPAN
style="FONT-SIZE: 11pt; FONT-FAMILY: 'Calibri','sans-serif'"
sans-serif="sans-serif" calibri="Calibri"></SPAN> </P>
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<P class=ox-aa0683f59f-MsoNormal><STRONG><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Tahoma','sans-serif'"
sans-serif="sans-serif" tahoma="Tahoma">From:</SPAN></STRONG><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Tahoma','sans-serif'"
sans-serif="sans-serif" tahoma="Tahoma"> 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: 12pt">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'" sans-serif="sans-serif"
arial="Arial">Douglas W. Scott</SPAN></P>
<P class=ox-aa0683f59f-ox-5f5835670a-msonormal><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">Law Offices of Douglas W.
Scott</SPAN></P>
<P class=ox-aa0683f59f-ox-5f5835670a-msonormal><SPAN
style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial">Windermere Building</SPAN></P>
<P class=ox-aa0683f59f-ox-5f5835670a-msonormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'" sans-serif="sans-serif"
arial="Arial">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: 10pt; FONT-FAMILY: 'Arial','sans-serif'"
sans-serif="sans-serif" arial="Arial"><A
href="http://www.davisscottlaw.com/">www.davisscottlaw.com</A></SPAN></P>
<P class=ox-aa0683f59f-ox-5f5835670a-msonormal> </P></DIV></BLOCKQUOTE>
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