Isle of Wight may ease business license burden

Published 12:21 pm Wednesday, May 3, 2017

By Diana McFarland

Managing editor

In an attempt to assist small businesses, the Isle of Wight County Board of Supervisors is considering a change to the business license tax structure.

Currently, businesses with gross receipts of less than $50,000 pay a flat yearly fee of $50. Beyond that level, the fee is based on the type of business and the amount of gross receipts.

Subscribe to our free email newsletter

Get the latest news sent to your inbox

For example, retail businesses pay 20 cents per $100 for gross receipts of $50,000 and over.

The Board is considering raising the threshold for the flat fee from $50,000 to $100,000. In addition, taxes would only be accrued on the amount over $100,000, not up to that amount — in addition to the $50 — as it is currently structured. {mprestriction ids=”1,2,3,4,5,6″}

There is no fee for receipts of $4,000 or less.

Currently there are 689 businesses that have less than $100,000 in gross receipts, said Isle of Wight Assistant County Administrator Don Robertson at Monday’s budget work session.

Of those, 59 percent pay the minimum $50, he said.

Robertson said the $100,000 threshold would be easier to understand than a graduated tax structure based on gross receipts.

“The main plan is to be fair to all businesses,” said Board Chairman Rex Alphin who had initiated the look into changing the tax structure.

Smithfield Supervisor Dick Grice wanted to add a tiered program, with businesses having gross receipts of $1,000 to $4,000 to pay $25 for a business license and on up.

Those businesses “need skin in the game,” and need to know there’s a process to starting a business, he said.

Isle of Wight County Administrator Randy Keaton said businesses making $4,000 or less is almost a hobby.

That comment gave Windsor Supervisor Joel Acree pause.

“Somebody knitting something right now is going to be offended,” he joked.

Keaton said someone could make $4,000 at a garage sale.

Grice persisted.

“I want to identify companies in our county. I want to know who they are,” Grice said.

Those with $1,000 and up should get a business license, he said.

Keaton said if it were to change to $1,000 there would need to be a large educational effort.

Robertson said it would also raise the specter of needing the proper zoning.

It could cause a ripple effect, he said.

The business license fee was changed in fiscal 2016 to make it similar to neighboring localities. Prior to that, the last change was in 1988.

The change included increasing the minimum rate from $30 to $50, and also increased the tax rates by 35 percent for gross receipts of more than $50,000 for the different business categories — and which was the maximum allowed by the state, said Isle of Wight Commissioner of Revenue Gerald Gwaltney.  {/mprestriction}