5.04.050 Exemptions.
To the extent set forth in this section, the following persons and businesses shall be exempt from the license fee requirements of this chapter and Chapter 5.06 LMC:
A. 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 $5,000, and who does not maintain a place of business in the city, shall be exempt from paying all city license fees of this chapter and Chapter 5.06 LMC upon completing the in-city income question on the application or annual renewal form. If a business qualifies for this fee exemption, it must enter the gross annual income – in the range of $1.00 to $5,000 – on the application form or, for renewing licensees, on the renewal form. An entry of $0.00 is not acceptable. If the city determines that a business does not meet the requirements for the fee exemption, the city will withdraw the city license registration and require that the business reapply for the city business license and pay the applicable city fees. This exemption does not apply to any regulatory license requirements or activities that require a specialized license or permit under other chapters of the city code.
B. Any business with annual gross income of the business in the city that is equal to or less than $5,000 shall make available to the city upon request an affidavit confirming the income for the prior business year. A copy of the business’s Internal Revenue Service Schedule C, Profit or Loss from Business, or other federal income tax forms shall be submitted as verification. If documentation is not available when business commences, the city will accept an affidavit and will require proper verification when available.
C. For the purposes of this title, the following entities or businesses may claim exemption from the business license fee under this chapter and Chapter 5.06 LMC, but if exempt under this subsection such entities or businesses shall still apply for a business license under this chapter and Chapter 5.06 LMC. For entities or businesses making an initial application to Business Licensing Services for a new business license, the fee shall be paid at the filing of the initial application, and the fee will be refunded by Business Licensing Services or the city if it is determined that the entity or business meets the criteria for exemption:
1. Businesses or activities for which license or franchises are required by any other chapter or section of the Lynnwood Municipal Code.
2. Nonbusiness activities carried on by religious, charitable, benevolent, fraternal or social organization including:
a. Nonprofit, Section 501(c)(3) organizations as designated by the Internal Revenue Service. Organizations must furnish proof to the development and business services department of its nonprofit status. For purposes of this chapter, the activities that are not part of the core religious functions are not exempt.
b. Political, Section 527 organizations as designated by the Internal Revenue Service.
3. Federal, state or local governmental entities.
4. Business operations consisting solely of the delivery of goods to a customer or client.
5. Instructors who provide public education and recreational services on behalf of a government agency.
6. Public schools.
7. Insurance providers as defined by RCW 48.17.010.
8. Condo/homeowner associations.
9. Extra building on same property (i.e., storage or warehouse).
10. A business that can demonstrate to the satisfaction of the director that it is exempt due to preemption by state or federal law. (Ord. 3412 § 2 (Exh. A), 2022; Ord. 3343 § 1 (Exh. A), 2019; Ord. 3323 § 1, 2018)