 Thu, Aug 28, 2008 07:50 PM
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2008-06-06  Duluth | Change in taxes for Duluth businesses
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| | by Scott Sowers | |  |
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| Mundrick (click for larger version) |
June 12, 2008 | 10:13 AM
www.gwinnettherald.com
DULUTH – In a move to make the city more in-line with other surrounding communities, the Duluth City Council voted to approve changing the Occupational Tax Structure for the city. This move will affect how much in taxes each business will pay annually. The motion was approved 3-0 with councilmembers Jim Dugan and Jim Hall not present.
Currently Duluth operates under the Standard Industry Code (SIC), a code created in 1987 and adopted by the city in 1992. It will now move to the more modern North American Industry Classification System Code (NAICS), which was first introduced in 1997. It determines a business' tax rate by using a percentage rate opposed to the former flat or structured fee utilizing six groups which take into account gross revenue, profit margin and a tax class rate.
The new NAICS will raise the taxes for 69 percent of businesses in Duluth, lower taxes for 30 percent and the remaining 1 percent will continue with their current rate. Two businesses in the city will have a drastic increase in taxes: Kroger and Associated Hygiene Products. The percentage rate given for one of these showed an increase from $652 to $31,546 for a business making $62.9 million in revenue. But a cap of $12,500 will prevent this.
"The original proposal by staff was a $10,500 cap, but because Gwinnett County's is $15,000 I recommend that we change it to $12,500," said councilmember Doug Mundrick. "This will still be much less than they would pay if they were in unincorporated Gwinnett County."
For existing businesses this will take effect Jan. 1 while it will be July 1 for new businesses.
In other business City Administrator Phil McLemore presented the $38,570,741 FY09 budget to members of council and the public during a public hearing. He outlined the raw numbers in the budget as well as the revenues the city will take in for the fiscal year starting July 1. Council will have the opportunity to vote on the budget at the June 30 meeting, meaning it will go into effect the following morning.
Taxes make up 50 percent of this year's revenues, while 25 percent come from police fines and the other quarter from various fees. This year's budget will utilize approximately $21 million for operations while the other $17.5 million will go to capital improvements.
"A capital project is defined as costing at least $5,000, the purchase does not recur annually, the life of the project will be at least three years and the item will become a part of the city's fixed asset inventory," McLemore said.
Some capital projects slated for this year include $350,000 for a new city-wide software package, $300,000 for new vehicles, $2.3 million for the master sidewalk plan, $1.5 million for the Ga. 120 realignment and $2.3 million for the Hospital Connector road, among others.
Several capital projects were carried over from the FY08 budget because they could not be completed or started in time.
The funds for these will also carry over from last year.
For a full list of the capital projects, as well as a breakdown of the city's operations costs, view the full presentation at www.duluth-ga.com.
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