Title
Approval of an Ordinance Amending Olympia Municipal Code Section 5.04.040 Relating to Business & Occupations Tax Definitions
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve on first reading, and forward to second reading, an Ordinance amending Olympia Municipal Code Section 5.04.040 relating to Business and Occupations Tax definitions as required by the passage of Senate Bill 5814.
Report
Issue:
Whether to approve on first reading, and forward to second reading, an Ordinance amending Olympia Municipal Code Section 5.04.040 relating to Business and Occupations Tax definitions as required by the passage of Senate Bill 5814.
Staff Contact:
Mike Githens, Finance Director, 360.753.8465
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
The City is authorized through RCW 35.23.440 to have a B&O tax program for those engaging in business in Olympia.
RCW 35.102 requires the cities, working through the Association of Washington Cities (AWC), to establish a Model B&P Tax Code. RCW 35.102 also allows periodic updates to the code. The City adopted the first B&O model code in 2004, through passage of Ordinance No. 6328.
In 2025, the legislature passed SB 5814 which, among other things, changed definitions for advertising, live presentations, information technology, custom website development, investigation, security, armored car, temporary staffing services and sales/customization of custom/prewritten software.
The model B&O Tax code contains definitions that were changed by SB 5814. During 2025, the AWC convened a working group of B&O cities to draft updates to the B&O model code that keep it aligned with the updated RCWs. The changes to OMC 5.04.040 are as follows:
• Definition of “sale at retail”
o adds new subsection (3) to incorporate changes to professional services.
o (6) updates language related to custom software and customization of prewritten software.
o (12) updates language related to digital goods and digital automated services.
• Definition of “sale at wholesale”: adds language to parallel updates to software in retail sales (6).
• Technical change in definition of “sale at retail”: (1)(e) moves misplaced language to correct typo created when extended warranties were added to the model.
Climate Analysis:
This agenda item is expected to result in no impact to greenhouse gas emissions.
Equity Analysis:
There are no known equity impacts related to this item.
Neighborhood/Community Interests (if known):
There are no known community interests related to this item.
Financial Impact:
There is no measurable financial impact of, or obligation associated with, this update.
Options:
1. Move to approve on first reading and forward to second reading the Ordinance Amending Olympia Municipal Code Section 5.04.040 relating to Business & Occupations Tax Definitions.
2. Direct staff to make changes to the Ordinance for second reading.
3. Take other action.
Attachments:
Ordinance
AWC Brochure