Wednesday, March 12, 2014
Million-dollar Summerville businesses could be getting discounted business license rates in 12.5 percent increments, the Town Business License Rates Committee discussed at its most recent meeting Monday.
At its February meeting, the committee compared three potential changes that would make the Town’s rates more similar to surrounding municipalities; the third option had the most changes and put Summerville on-par with other municipalities.
However, on Monday, committee member Bill Summers suggested surpassing the local standard by creating a fourth option that would put Summerville even lower.
“If the mayor is trying to put out the message that Summerville is business friendly, let’s give him some ammunition,” said Summers. “Let’s be able to say we are the absolute lowest …[that] we are the most advantageous place, from a tax perspective, to do business.”
The fourth option would add the 12.5 percent decline and add extra discounts to incentivize manufacturing businesses to settle in town.
The committee is tasked with reevaluating the town’s business license rates to make Summerville more business friendly.
Business license costs are determined based on a business’ class, which is nationally standardized, and its gross receipts.
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.
Under the current ordinance, businesses 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.
Most surrounding municipalities use a $1 million threshold and declining rates of 10 percent.
Combining the two ideas, the fourth option would decrease the discount threshold to $1 million, with a declining rate of 12.5 percent per million in gross receipts, with $5 - $10 million maintaining at 60 percent and more than $10 million at 10 percent. Only manufacturers, as defined by those who pay the 10.5% manufacturing property tax, would qualify for the $5 million and above discounts.
To further investigate the new option, Town Finance Director Belinda Harper was charged with estimating the financial affects of the possible changes. She will present her findings at the next committee meeting, on a date that’s to be determined.
The committee said they hope to develop a recommendation for Town Council at the next meeting.