City to go after business tax evaders

Local News

July 27, 2012

City to go after business tax evaders

By Bill Robinson Register Editor The Richmond Register Fri Jul 27, 2012, 12:15 AM EDT

RICHMOND — The city is gearing up to go after businesses that operate in Richmond without buying a license and paying the associated 2-percent tax.

Already, the city has hired an audit clerk to review business tax forms and payments to ensure they are being filed properly.

This past Sunday, the city began advertising for a business license associate who will search for individuals and entities operating in the city without paying required fees and taxes.

Tuesday night, the city commission heard first reading of an 18-page ordinance designed to more clearly define who is required to buy a business license and pay the associated fees and taxes.

Among other new provisions, the ordinance specifically requires those who rent two or more residential units, including houses and apartments, to buy a business license and pay the 2-percent net profit tax.

Every business operating in the city, including those here only temporarily, are required to not only obtain a business license and pay fees, but to collect the 2-percent occupational license fee from each employee performing work in Richmond.

Employees of businesses not based here must keep a copy of their license and show it when asked to do so by a city employee.

The initial cost of a business license also would rise from $25 to $50, but annual renewals will cost only $25, if the ordinance is adopted on second reading.

City officials have long suspected many businesses are “operating under the radar” and avoiding their tax obligations, said City Manager Jimmy Howard.

Asked how much revenue the city expects its stepped-up collection efforts to produce, Howard said he was unsure.

“I expect it to be quite a bit,” he said. “At least I hope so.”

He and the city commission have been planning these recent moves for months, Howard said.

Howard and Mayor Jim Barnes traveled to Bowling Green to study that city’s procedures and have patterned the revised ordinance and job descriptions of collection personnel on what they observed there, he said.

Previously, Howard and the commission have concentrated on cutting expenses to balance the city budget. That effort should result in a better-than-expected year-end surplus of almost $3 million, Finance Director Sharon Cain reported July 10.

Although they want to avoid raising taxes, the commission want to ensure that all rightfully owed taxes are being paid, Barnes and Howard have said.

Not to seek tax payments from all businesses would be unfair to those who voluntarily fulfill their obligations to the city, Barnes has said repeatedly in recent months.

Bill Robinson can be reached at brobinson@richmondregister.com or at 624-6622.

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