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1. Who needs a City Endorsement on their State Business License?

Every person, firm, association, or corporation engaging in business within the City of Bainbridge Island must have a valid City endorsement on their State of Washington business license.   

Engaging in business means commencing, conducting, or continuing in business, and the exercise of corporate or franchise powers and liquidating a business (Ordinance No. 2018-35). For online and cloud-based businesses, engaging in business is defined as the physical address of the business as listed with the Washington State Department of Revenue. Without being all-inclusive, engaging in business includes:

• General Contractors and all Subcontractors
• Home-based Businesses (including online and cloud-based businesses)
• Mobile Retail Food Establishments (i.e., food trucks) and other mobile businesses
• Nonprofit Organizations (although they are exempt from the City fee)
• Real Estate Agents (including those working under a brokerage if the agent is an independent agent and not an employee)
• Rental property owners and property developers (no matter if the property rented or developed is not located on the island)
• Short-term, Long-term Housing or Vacation Rentals (including short-term platforms such as Airbnb or VRBO)
• Vendors at Special Events

A more comprehensive list is available in Chapter 5.05 of the Municipal Code as modified by City Ordinance No. 2018-35. The City definition meets the State of Washington model threshold definition as mandated by RCW 35.90.080.

For means of determining the standard for "within the City," the City has adopted the definition for physical nexus presence, meaning the nexus standard for determining presence within the City need only be demonstrably more than the slightest presence. 

Physical presence nexus creating activities include, but are not limited to:

• having an employee working in the State and, subsequently, in the City
• having property in the State and, subsequently, in the City
• having a stock of goods in the State and, subsequently, in the City, including inventory held by a marketplace facilitator or another third party representative
• renting or leasing tangible personal property in the State and, subsequently, in the City
• having an agent or third-party representative engage in activities significantly associated with establishing or maintaining a market in the State and, subsequently, in the City
• soliciting sales in the State and, subsequently, in the City through employees or other representatives
• installing or assembling goods in the State and, subsequently, in the City, either by employees or other representatives
• constructing, installing, repairing, or maintaining real property or tangible personal property in the State and, subsequently, in the City, either by employees or other representatives
• providing services in the State and, subsequently, in the City, such as accepting returns or providing product training, either by employees or other representatives
• delivering goods into the State and, subsequently, in the City other than by mail or common carrier, including using the seller’s own vehicle
• having an exhibit at a trade show to maintain or establish a market for in the State and, subsequently in the City, except for as provided in our Special Notice titled Trade Convention Exception from Nexus for Retail Sales
• soliciting sales in the State and, subsequently, in the City through employees or other representatives
• installing or assembling goods in the State and, subsequently, in the City, either by employees or other representatives
• constructing, installing, repairing, or maintaining real property or tangible personal property in the State and, subsequently, in the City, either by employees or other representatives
• providing services in the State and, subsequently, in the City, such as accepting returns or providing product training, either by employees or other representatives
• delivering goods into the State and, subsequently, in the City, other than by mail or common carrier (USPS, FedEx, etc.), including using the seller's own vehicle
• having an exhibit at a trade show to maintain or establish a market for in the State and, subsequently in the City, except for as provided in our Special Notice titled Trade Convention Exception from Nexus for Retail Sales

Important note: If a business has more than one location in the City, a separate endorsement is required for each location.

Business Endorsement Exemptions

Fee-Exempt Business (license endorsement required BUT no fee due)

Is your business exempt from the endorsement requirement but you still need an endorsement? Or, are you operating a non-profit (endorsement required but fee-exempt)?

A Fee-Exempt Business Endorsement allows businesses to register with the City and obtain a City Business Endorsement without paying the fee. To apply for a Fee-Exempt Endorsement:

• Complete the City of Bainbridge Island Business License Application.
• Choose the Fee-Exempt option. 

Business owners will be contacted by the City to ensure their application meets the qualifications for fee exemption. Fee-exempt applications are subject to the same zoning and code compliance review and approval as a general or home occupancy application. Be aware, the City will attempt to reach a business owner twice to discuss fee-exempt qualifications and acquire necessary information for zoning and code compliance review. If no response is received, the application will automatically be denied for failure to provide required information. Applications failing to provide valid contact information (i.e. phone number and /or email address) will also be automatically denied. 

Important note: Fee-exempt endorsements will be audited yearly to ensure a business continues to meet qualifications for exemption. Businesses not meeting qualifications will have their endorsement automatically changed to a fee-based endorsement.

Full Exemption (no license endorsement required AND no fee due)

The following businesses do not require an endorsement and are also exempt from the fee (BIMC 5.04.080 and 5.40.030):

The exercise of governmental functions performed by any instrumentality of the United States, the state of Washington, or any political subdivision thereof.

• Farmers and gardeners selling their own farm products raised and grown exclusively upon lands owned or occupied by them.
• Garage sales conducted on residential premises.
• Coming onto the island for the mere delivery of goods and services where the sale occurred outside the City, and the delivery was the only event occurring within the City (the performance of contracting and subcontracting work is not exempt).
• Any person or business whose annual value of products, gross proceeds of sales, or gross income of the business in the City is equal to or less than $3000.
• Any business activity carried on a the same fixed location for not more than one (1) day per week and not more than four (4) consecutive weeks in one (1) calendar year or any business carried on at the same fixed location in the City for not more than four (4) consecutive days in one (1) calendar year.

2. How do I apply for or renew a City Endorsement on my State Business License?

Apply for or renew your City Business Endorsement via        WA-DOR Business Licensing Service

 Application

In 2018 the City contracted with the State of Washington Business Licensing Service (BLS) to handle the City's business licensing. This gives businesses a "one-stop shopping" portal for obtaining city endorsements throughout the State. The City continues to oversee and regulate business licensing endorsements according to City Code. The City has responsibility for the approval, and denial, of business license endorsements.

If your business is located off the island (non-resident), your business license endorsement will be granted automatically unless the business applies for a fee-exempt endorsement. If a non-resident business applies for a fee-exempt business endorsement, the City will contact you to determine if the business meets qualifications for fee exemption. 

If your business is located on the island, your application will be reviewed by the City for compliance with legal, zoning, and signage requirements. More than likely, business owners will be contacted by the City to provide additional information pertaining to the required City code and zoning compliance review either by (a) email or (b) phone. If the application is approved, a City endorsement will appear on your Washington State Business License. The approval process could take up to four weeks, or longer if compliance questions arise.

Important note: The City will attempt to contact the business twice to secure the additional information.  After the second attempt, the application will be terminated for failure to provide required information. Failure to provide valid contact information (i.e., phone number and/or email) will result in an automatic denial of the application.

Additional Information or Permissions

Certain businesses require additional information or permissions. It is the responsibility of the business owner or primary agent to provide the additional information and/or secure any and all approvals required by the City, County, and State. Common businesses requiring additional information or permissions include but are not limited to:

• Establishments selling or serving alcohol.
• Cannabis Growing, Processing, and/or Retail Establishments.
• Commercial Parking Lots.
• Vineyards, breweries, and distilleries.
• Mobile Retail Food Establishments (PDF) (i.e., food trucks) or other mobile businesses.
• Operation of one or more of the following:
  • Cabarets
  • Games of skill (i.e., video games)
  • Amusement games (e.g., billiard tables, pool tables, foosball tables, etc.)
  • Jukeboxes
  • Veterinary clinics or animal boarding facilities
• Short-Term Vacation Rentals (PDF) (including Airbnb or VRBO on line platforms). (PDF)
• Long-term rentals.

3. Do I need a State of Washington Business License to obtain a City Endorsement?

Yes. The Washington State Department of Revenue issues a "Uniform Business Identification" (UBI) number. The State UBI registers a business entity for state tax purposes and is mandatory prior to obtaining a Bainbridge Island endorsement on your State of Washington business license. Only a City endorsement on a State business license entitles a business to engage in business in the City. Visit the State of Washington Business Licensing Service website (WA-DOR) to obtain your UBI number.

4. How much does a City Endorsement on my State Business License cost?

A City endorsement on your State of Washington business license costs $71 ($74 in 2024). You will pay this fee at the time of application (fee MUST be included for your application to be processed) and the same fee annually to maintain your City endorsement.

Nonprofit Organizations are exempt from the City endorsement fee although they are still required to obtain a State business license and a City endorsement. See this webpage, about half way down, for fee-exempt endorsement.

WA-DOR Business Licensing Service (BLS) may add additional processing fees to cover their processing, postage, and other costs.

5. Where do I post my Washington State Business License that includes my City of Bainbridge Island endorsement?

Your State of Washington Business License that includes a City endorsement must be posted in clear public view in the place of business for which it is issued.

6. How do I renew my City Business License Endorsement?

Approximately six (6) weeks before your State of Washington business license expires, the State Business Licensing Service (BLS) will email you a license renewal notification with instructions to renew through BLS. Payment is accepted online with E-check or credit/debit card. If you prefer to renew your license by mail using the BLS renewal form, the form and a check, made payable to the Washington Department of Revenue, must reach BLS before the license expiration date. The Sate will assess a late filing fee for renewals received after the expiration date.

Nonprofit organizations are exempt from the City's Business License Renewal Fee but are still required to obtain a license and pay applicable State fees.

7. Are there City Business and Occupation Taxes?

As an incorporated city, one way Bainbridge Island raises revenue is through its Business & Occupation (B&O) Tax levied on businesses doing business on the island. Businesses with gross receipts of more than $150,000 earned on Bainbridge Island are subject to the City’s B&O Tax set at 1/10 of 1%. The tax is filed annually reporting gross revenue for the prior calendar year. This B&O Tax is separate from and in addition to the Washington State B&O Tax. 

The City mails a personalized B&O Tax Report to our businesses in January each year. B&O Tax Returns and tax payments are due by April 15th. If the 15th falls on a weekend the return, and any applicable payment is due on the next business day. Full instructions for completing the City's B&O Tax Return and information on penalties are available on the B&O Tax webpage.

Important note: Nonprofit organizations are only subject to Business and Occupation Taxes when undertaking for-profit activities.

If you have questions about the City’s B&O Tax, please contact the Finance Department at (206)780-8591 or taxes@bainbridgewa.gov.

_____________________________

• 2020 B&O Tax Return (RY2019)

• 2021 B&O Tax Return (RY2020)

• 2022 B&O Tax Return (RY2021)

• 2023 B&O Tax Return (RY2022)

8. What if my business moves to a new location and/or the mailing address changes?

You are required to notify the State of Washington Business Licensing Services (BLS) Please notify: 

WA-DOR Business Licensing Service https://dor.wa.gov/ (360) 705-6741

When your request for a physical address change is received, and the business is physically located on Bainbridge Island, the change will be reviewed by the City for compliance with legal, zoning, and signage requirements. If there is a compliance-related question or problem, or if further information is required, the business will be contacted. This process could take up to four weeks, or longer. Owners will be notified of the outcome. Approved changes will appear on your Washington State Business License.

9. How do I cancel or close my State Business License with a City Endorsement?

To cancel or close your City Business Endorsement contact: 

WA-DOR Business Licensing Service https://dor.wa.gov/ (360) 705-6741

10. What if I sell my business?

The City endorsement on your State Business License is personal and non-transferable. No endorsement allows another person to operate a business under the seller's endorsement. The new owner must apply for a new State of Washington business license and City endorsement. To notify the State of the sale of a business, contact:

WA-DOR Business License https://dor.wa.gov/ (360) 705-6741