County looks at implementing business license requirement
In order to make sure local businesses are paying their occupational and net profit taxes, the Boyle County Fiscal Court plans on requiring them to obtain a county business license. Businesses have been required to pay these taxes even though the county hasn’t had a business license requirement but the city does.
County Administrator Julie Wagner said, “We have no way to capture past due or unfiled businesses who are either withholding and not turning over the taxes, or they aren’t taking the required taxes out of the checks. This (county business license) is just one new way we are attempting to get all businesses and sole proprietors paying their required withholdings.”
The county’s new business license ordinance will probably have its first reading during the next fiscal court meeting, Wagner said.
Her proposal is to require all businesses and contractors to annually purchase a $100 business license from the county for the first two years. The license fee for home-based businesses and net profit organizations will be $50 annually.
The city business license is a one-time $25 fee.
Wagner said, “Once we get accounts in good standing, we will charge $100, but rebate $50 off their tax bill annually if the account is not in arrears. I’m writing the ordinance to state on year three onward, we will offer a $50 rebate on each account.”
The county can collect unpaid taxes for the past five years. “The KRS says we can only collect back taxes owed for five years. We are taking a much stronger stand against those accounts who are in arrears. There is now a strict 30-, 60-, and 90-day system. No response from our attempts we will immediately turn them over to the county attorney for prosecution.
She added that the annual license requirement will start sometime between July and October.
Wagner said, “Everyone in the county who conducts business must register and pay the occupational and license fees. If the account is not current, they will not be issued a business license on year two.” During the second year, if the business is delinquent in paying taxes within 90 days, the business will be turned over to the Boyle County Attorney for prosecution. “It is unfair to the businesses that are current if we allow anyone not paying to slide,” Wager said.
She explained, “I had a lengthy conversation with City Manager Earl Coffey on our collections and leakage. The city was correct — there is a problem. Antiquated software limits how we go after past dues and unregistered businesses.” However, the job of finding the businesses that haven’t paid taxes can be difficult, but “is not impossible,” Wagner added.
“With the judge executive and fiscal court’s approval, we have restructured how we manage collections and the results speak for themselves. I have identified 165-plus businesses who are either behind or never registered. We have already collected nearly $375,000, much of which was City of Danville revenue,” Wagner said.
“We have approached collections two ways. One is I asked the City of Danville for their business license list. The list has over 7,000 businesses, current and closed. I’ve slowly been going through the list looking for leakage (uncollected revenue), removing any closed businesses from our database and contacted those who are in arrears,” Wagner said.
“The other is by identifying businesses by simply driving the county and logging every business. We are slowly entering them and identifying those who aren’t paying.”
Wagner added, “The business license program will fund enough to add a staff person who will manage both business and contractor licenses and collections. By adding another staff person, we will free our tax administrator, Susanna Ryan, to work on the bigger problems and let our new person work on the smaller accounts and those who have never registered with our office.”
It’s important to collect the taxes owed because, “The county is facing serious infrastructure needs in the near future. We rely on our occupational and net profit revenues to fund these,” Wagner said. “Our EMS desperately needs a new space as does environment services and the county road department. The jail is overcrowded and must be expanded. Roads in the county need addressed as does broadband and water and sewer. The county courthouse is busting at the seams. We need an expansion plan for this too. The court systems are all operating in small spaces – with increased staffing to handle their surges.”