AUGUSTA — A first reading of amendments to the occupational license ordinance was approved during Augusta City Council meeting on Wednesday.
The recommended changes to the ordinance include eliminating the $75 minimum on net profits for businesses and persons conducting businesses within the city limits, increasing the payroll tax from 1.25 percent to 1.50 percent, remove the cap of $900 on net profits tax of business and persons conducting business and on payroll tax on wages and require those persons and businesses engaging in the business of real property rentals, both residential, commercial, storage unit, short term and long term, shall be subject to the occupational license tax ordinance.
Augusta City Attorney Cynthia Thompson explained some of the clarifications and changes to the council, which including making businesses aware that they have to pay an occupational tax on non-alcohol sales.
“Businesses that also hold ABC licenses are still required to pay an occupational license on the non-alcohol sales,” she said. “I think a lot of businesses don’t understand that and it will be explained in their packets.”
Mayor Michael Taylor said the changes are not being made to hurt anyone.
“We are not doing this to hurt anyone,” he said. “We needed to do this 25 to 30 years ago.”
Council Member Joe Goecke said he had been in favor of raising the payroll tax gradually.
“I wanted to gradually raise the payroll tax, but it was recommended by the others that we go straight for the 1.50,” he said. “I think — the one thing we didn’t talk about — and I think it’s in the ordinance that yard sales are exempt. If they’re having one every weekend, that’s different. And, children are exempt. Those are just some things I wanted to point out.”
Goecke also said he would like to have the money earmarked for infrastructure and upkeep for at least a couple of years.
Augusta West Magistrate Craig Miller asked when the payroll tax was last increased. Thompson said it was raised in 2016 to 1.25 percent.
“The cap of $900 is on the occupational license per business?” he asked.
Thompson said that was on the occupational license and payroll tax.
“There is not a tax on total salary? Is there a cap?” Miller asked. “Your $900 cap would equate to a certain salary?”
According to Thompson, the salary would be $72,000.
“So, you are increasing the tax and taking off the cap on salaries over $72,000. As well as all businesses will pay over $900 — I know we pay $900 every year — so we will have to bring our paperwork in every year?”
He also asked about rental properties.
Thompson said the paragraph about rentals was only added as clarification.
“Landlords were never specifically exempt from the ordinance, but the custom had not to been to enforce it on landlords,” she said. “It doesn’t really need to be there, but it is just to clarify the practice so landlords would know they are being included in the practice.”
According to Thompson, there is no minimum fee now, so if a person makes $3,000 on a rental, they would only pay about $30.75
“They would pay $10.25 times three, so they wouldn’t be paying the $75 minimum,” she said. “It will be more work for the clerks, because some people will be paying the small amounts.”
The amendments were passed with Jim Thornsberry, Goecke and Jay Yingling voting in favor and Matt McCane, Tina Sticklen and Todd Kelsch voting against. The tie had to be broken by Taylor, who voted in favor of the amendments.
Kelsch said he wanted to clarify his “no” vote. He said he was concerned about the amount of money that landlords would suddenly being paying.
Thompson clarified that the amount being paid would be on net profit and not gross. Kelsch said he felt a little better about the ordinance.
Before the ordinance can take effect, it must go through a second reading and be published.
During the meeting, council members also approved allowing Taylor to sign an agreement for $71,682 in funding to repair alleys.
