Friday, December 13, 2013
The newly formed Town Business License Rates Committee met for the first time Tuesday.
Mayor Bill Collins appointed the group to review the Town’s current business license ordinance and make it more business-friendly.
The committee members are Andy Brothers, Bill Summers, Brad Mallett, Charlie Cuzzell, Jim Kersting and Ronnie Givens. Town Councilman Aaron Brown and Finance Director Belinda Harper were also in attendance.
“The mission of the committee is to evaluate the rates. …We want to be business friendly, that’s why we’re here today,” said Harper.
Although the members spent much of the meeting becoming acclimated to the system and its administration, as explained by Harper, they did discuss possibilities for changing business rates.
Specifically, they focused on updating the Town’s policy on rates for multi-million dollar businesses.
The rates are determined by a business’ class, as defined by the North American Industry Classification System (NAICS). For each class, a business is charged a base rate for $0 – $2,000 worth of gross receipts. If the receipts exceed $2,000 they are charged an additional smaller rate per extra thousand.
For example, a class one business license (which involves agriculture businesses, such as farming) has a $30 base rate and $1.10 additional charge. If a farmer collected $5,000 in gross receipts last year, his business license this year would cost $33.30.
Businesses may receive a discount on the rates after reaching $2 million in gross receipts. The declining rates are 95 percent for $2-3 million; 90 percent for $3 – 4 million; 85 percent for $4 – 5 million; and 80 percent for more than $5 million.
The declining rates help persuade larger scale businesses to locate in Summerville, the group discussed, but the Town’s declining scale does not compare favorably to other area municipalities.
Both Mount Pleasant and Goose Creek have declining rates of 10 percent, compared to Summerville’s 5 percent. North Charleston also declines by 10 percent until reaching more than $250,000,000 in gross receipts. Charleston decreases by 5 percent, but continues declining until $10 million of gross receipts.
“Summerville is kind of on the low end of the spectrum,” said committee member Ronnie Givens. “We talked about taking the declining rates and lowering them to start the first million rather than $2 million.”
The committee said they would like to structure Summerville’s licenses similarly to Mount Pleasant, which begins declining rates after $1 million of gross receipts by 10 percent incrementally.
The meeting closed with member Charlie Cuzzell’s request for more information on the number of businesses by class and the percent of funds each class contributed to the total amount collected last year. The group agreed to meet again at a later date to discuss Harper’s findings.
Once the committee reconvenes they may decide to recommend their proposed changes to Town Council for its approval.