City updates business-license language to tie fee-free threshold to inflation

The City Council on Sept. 4 adopted an ordinance amending Mountlake Terrace Municipal Code language to comply with recent changes to Washington state model business-license provisions (RCW 35.90-specified model). The amendment requires the city to adjust the municipal fee-free gross-income threshold for nonresident contractors for inflation on a four-year schedule beginning Jan. 1, 2026.

City planning and licensing staff explained the state’s model ordinance lowered a previously referenced minimum exemption from $12,000 to $4,000 in state guidance and that state law also requires periodic adjustments tied to the consumer price index (CPI). Mountlake Terrace’s existing local fee-free threshold for contractors and nonresident businesses remains $12,000; the adopted ordinance adds the required CPI-adjustment language so the $12,000 threshold will be updated automatically every four years, starting Jan. 1, 2026.

Christy Osborne, staff responsible for the city’s business-license program, told council the change is administrative: it harmonizes local code with the state model and avoids unintentionally falling out of compliance. Council members asked whether the $12,000 local threshold is consistent with neighboring jurisdictions and whether increasing costs in construction might affect small contractors’ willingness to bid on local work. Staff said the city can revisit thresholds based on local feedback but that the immediate change simply implements the state-required inflation adjustment.

The council adopted the ordinance by voice vote. The ordinance does not change the local $12,000 fee-free registration threshold; it only adds automatic CPI-based indexing to comply with the state timetable and will take effect Jan. 1, 2026.