RICHMOND —
A new draft of a proposed revision to the city’s business tax ordinance would not include an annual license renewal fee of $25 for permanent businesses. The cost of a permanent license would rise from $25 to $50, but no annual renewal would be charged if the ordinance is adopted in its current form.
Also, the license fee for transient businesses would be dropped to $100 from the previously proposed $250. However, the license requirement would still apply to festival vendors, including vendors at the city’s Great American Festival next month.
Currently, a license for transient businesses, those that operate only temporarily in the city, is $500. However, in practice, festival vendors have not been forced to buy business licenses, said City Attorney Garrett Fowles.
A license for a transient, or itinerant, business would be good for three days with additional days costing $50 until a maximum of $500 was paid.
Changes in the ordinance draft, which the commission heard on first reading July 28, were announced Tuesday during a commission work session conducted at Irvinton. Coincidentally, the previously scheduled meeting location houses the city’s tourism department.
The city has hired an audit clerk, advertised for an investigator and is revising the business-license ordinance to ensure that all businesses operating in Richmond obtain a license and pay the 2-percent net-profits tax. Their employees also are subject to the 2-percent occupational tax, which employers are required to withhold.
Requests for changes in the revision were made by craft vendors as well the tourism department, who feared that requiring festival vendors to buy a $250 business license would curtail participation.
Some vendors may realize far less than $250 in profit by participating in local festivals, according to local vendors, several of whom attended Tuesday’s meeting.
Previously, craft vendors were charged only a $50 booth rental to participate, said Lori Murphy-Tatum, the city’s tourism director. Food vendors have been charged $200, she said.
Businesses with no permanent location in the city but occasionally operate here are defined as itinerant by the ordinance. That includes vendors who sell produce at the farmers’ market, officials said in response to a question from the audience.
The reason for charging a higher license fee for transient businesses is to collect the city’s net-profits tax in advance, Barnes said. A transient business may never return to the city and never pay the tax.
When some in the audience asked if the city could make an exception of vendors at its own festivals, Barnes said he was opposed because others would then request exceptions.
Because proceeds from the Great American Festival go to the city and not the tourism department, the $200 booth rental for food vendors could be reduced to $100, the mayor suggested. Food vendors would still pay, he said, with the same net effect on both vendors and the city’s coffers. However, he did not address the impact on craft vendors who have been charged $50 for booth rental.
The ordinance revision also includes additional business definitions, some patterned after a Bowling Green ordinance, to clarify who is required to buy a business license, Fowles said. However, that does not mean those businesses, including the leasing of real estate, were not covered by the current ordinance, he said.
That was one incorrect conclusion some had drawn after reading a newspaper report of the proposed ordinance changes, the city attorney said.
The news report also did not make clear the cost of a transient business would have been halved by the previous proposal, he said.
Local News
Renewal fee dropped from business license proposal
Transient license charge reduced
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