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1. Who needs a City Business License?

Every person, firm, association, or corporation that engages in business within the jurisdiction of the City of Bainbridge Island must have a valid City business license in good standing.  

The Bainbridge Island Municipal Code states "every person who engages in business activities within the City shall apply for and obtain from the director a license for the privilege of engaging in business within the City for each calendar year or portion thereof." Engaging in business means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers and liquidating a business (Ord. 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 yet bringing specific awareness to the public, 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)
• Nonprofit Organizations
• 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 AirBNBs and VRBOs)
• Vendors at Special Events

A more comprehensive list encompassing the definition is available within 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 that 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 that are 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

 

Please Note: If a business has more than one location in the City, a separate license is required for each location.

ATTENTION:  All businesses and organizations directly engaging in business with the City of Bainbridge Island, for profit or nonprofit purposes, must have a valid City business license in good standing.

Business Licensing Exemptions

The City recognizes the following exemptions related to business licensing:

Fee-Exempt Business License.  The City recognizes two types of businesses as eligible for a Fee-Exempt License.  A Fee-Exempt Business License allows businesses to register with the City and obtain a City Business License; however, the business is exempt from paying the general business license fee of $71. To apply for a Fee-Exempt license:

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

Please note: Fee-exempt licenses will be audited yearly to ensure a business continues to meet qualifications for exemption.  Businesses not meeting qualifications will have their license automatically changed to a fee-based license. The annual business license fee is $71.

Business owners will be contacted by the City to ensure the 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 license 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 be automatically denied.

The two types of businesses eligible for fee exemption are:

• Temporary Stationary Businesses. Any business activity carried on at 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 is exempt from the licensing fee per Chapter 5.40 of the Municipal Code.  NOTE: A business physically located on the island does not  typically qualify for this exemption. 
• Minimum Threshold. 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 $3,000 shall be exempt from the license fee per Chapter 5.04 of the Municipal Code revised under Ordinance No. 2023-01.

Full License Exemption. The following businesses do not require a business license and are exempt from licensing per BIMC 5.04.080:

• Farmers and gardeners selling their products on their own land
• Garage sales
• Coming onto the island for the mere delivery of goods and services

2. How do I apply for or renew a City Business License?

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

Following Application

The City's contract with the State of Washington Business Licensing Service (BLS) ensures businesses a "one-stop shopping" portal for obtaining individual city licenses throughout the State. The City continues to oversee, regulate, and maintain its business licensing according to City Code. The City maintains the responsibility for the approval, denial, and payment collection for business licenses.

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

If your business is located on the island, your license 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 the required City code and zoning compliance review either by (a) email containing a link to complete an online webform survey, or (b) phone .  If the application is approved, an endorsement will appear on your Washington State Business License. (NOTE: The City no longer provides Business License Certificates.) The approval process could take up to two weeks, or longer should compliance questions arise.

Important Note: The City will attempt to contact the business twice to secure the additional information.  After the second attempt, the license 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 license 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
• Mobile Retail Food Establishments (PDF) (i.e., food trucks)
• 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
• Temporary Housing or Vacation Rentals (PDF) (including AirBNBs)

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

Yes. The Washington State Department of Revenue issues a "Uniform Business Identification" (UBI) number. The State UBI registers a business entity for tax purposes and is mandatory to obtain a a Bainbridge Island Business License. Only a City Business License entities a business entity to engage in business. Visit the State of Washington Business Licensing Service website to obtain your UBI number.

4. How much does a City Business License cost?

A City Business License costs $71. You will pay an initial $71 at the time of your application (the fee must be included with your application for your application to be processed) and $71 each anniversary year to maintain your license.

Nonprofit Organizations are exempt from the cost of a Business License.

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

5. Where do I post my Business License?

Your City Business License must be posted in clear public view in the place of business for which it is issued.

6. How do I renew my Business License?

Approximately six (6) weeks before your current City business license expires, BLS will send you a license renewal letter with instructions to renew through BLS. Payment is easily accepted online with E-check or credit 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. A late filing fee will be assessed for renewals received after the expiration date.

Nonprofit organizations are exempt from the Business License Renewal Fee.

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 Business and Occupation 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 the first week of January of each year. B&O Tax Returns and tax payments are due by April 15th each calendar year.  Full instructions on completing the City's B&O Tax Return and information on penalties are available on the B&O Tax webpage.

Please Note: Nonprofit organizations are only subject to Business and Occupation Taxes as a result of 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) - Under Development

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

You are required to notify the City of changes in the business physical and/or mailing address. 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 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 outcome. Approved changes will appear on your Washington State Business License.

9. How do I cancel or close my Business License?

To cancel or close your City Business License contact: 

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

10. What if I sell my business?

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

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