1. The following purchasers in the eligible target business class who have paid the tax imposed by this chapter on construction materials, fixed equipment, or machinery installation, or on sales of or charges made for labor and services rendered in respect to such construction or installation of such machinery or equipment, are eligible for an exemption as provided for in this section: for property zoned downtown urban center (DUC), C-3 (heavy commercial district), and C-4 (mixed-use commercial), purchases directly related to the construction of new commercial buildings or redevelopment of existing vacant buildings 25,000 square feet or greater or expansion of existing commercial buildings that creates new or expanded building floor area that generates sales tax revenue.
2. For property zoned downtown urban center (DUC), purchases directly related to the construction of new commercial buildings less than 25,000 square feet, or redevelopment of existing buildings less than 25,000 square feet, where the cost of the improvement is at least 25 percent of the current assessed value of the improvements on the property pursuant to the assessment records of King or Pierce County, as applicable.
3. For property zoned M-1 (light industrial district) and M-2 (heavy industrial district), purchases directly related to the construction of new commercial buildings, redevelopment of existing buildings that result in a change of occupancy from warehouse use to manufacturing use, or redevelopment of existing buildings where the cost of the improvement is at least 25 percent of the current assessed value of the improvements on the property pursuant to the assessment records of King or Pierce County, as applicable.
B. A purchaser is eligible for an exemption specified under this section from the local sales and use tax paid under this chapter, as authorized under RCW 82.14.030(2), up to a maximum of 20 percent of taxes imposed and paid to the city of Auburn, not to exceed $100,000. The purchaser is eligible for an exemption under this section in the form of a refund.
C. For purposes of this section, the following definitions apply:
1. “Change of occupancy” means a change of the purpose for which a building is used or intended to be used. The term shall also include the building or portion thereof in which such change of occupancy is made. “Change of occupancy” is not intended to include change of tenants or proprietors.
2. “Commercial building” means a structure that has, as its primary purpose, a commercial use as that term is defined in ACC 18.04.240.
3. “Expansion” means to add to the floor area of a building.
4. “Purchaser” means a person or entity that is the recipient of a good or service.
D. Eligible Target Business Classes.
1. The construction sales tax exemption specified in subsection (A)(1) of this section shall only apply to those businesses engaged in normal business activities under the following classifications of businesses occurring within the specified zoning designations:
a. General merchandise, warehouse club, supercenter – Sales tax classification code 45291;
b. Building materials and garden home center – Sales tax classification code 44411;
c. Electronics and appliances – Sales tax classification code 44311;
d. Full-service restaurants – Sales tax classification code 722110;
e. New and used automobile and light utility truck dealers – Sales tax classification code 44110;
f. Bowling centers – Sales tax classification code 713950;
g. Motion picture theaters (excluding drive-in theaters) – Sales tax classification code 512131;
h. Hotels – Sales tax classification code 72110; and
i. Residential buildings and dwellings within the DUC only – North American Industry Classification System code 531110.
2. The construction sales tax exemptions specified in subsections (A)(2) and (3) of this section shall apply to all businesses located in the DUC, M-1, and M-2 zoning districts as set forth in those subsections.
E. Application for Refund.
1. A purchaser claiming an exemption and applying for a refund under this section must pay the tax imposed by ACC 3.60.020. The purchaser may then apply to the city for a refund in a form and manner prescribed by the city and shall submit information that the city deems adequate to justify the exemption, including but not limited to:
a. Identification of the vendor/contractor;
b. North American Industry Classification System (NAICS) code under which the tax was reported;
c. Name and unified business identifier (UBI) number of the vendor/contractor on the combined excise tax return filed with the state of Washington; and
d. Detailed information supporting the amounts reported under the state use and sales tax section of the above report for location codes 1702 and 2724.
2. A purchaser may not apply for a refund under this section more frequently than once per quarter. The purchaser must specify the amount of exempted tax claimed and the qualifying purchases for which the exemption is claimed. The purchaser must retain all records provided to the city in making its claim.
3. The city shall determine eligibility under this section based on the information provided by the purchaser, which is subject to audit verification by the city. If the city verifies eligibility, it shall remit eligible taxes paid to the purchaser.
F. Appeals. Any applicant aggrieved by an action of the city concerning eligibility or computation of remittance under this section may file a written appeal to the city’s hearing examiner in accordance with Chapter 2.46 ACC within 14 calendar days of receipt of the city’s decision. The hearing examiner is specifically authorized to hear and decide such appeals and the decision of the hearing examiner shall be the final action of the city.