Lynchburg City Council cuts business tax for some

The Lynchburg City Council on Tuesday night approved a measure that eliminates the city’s business tax for businesses that operate with less than $150,000 in gross annual revenue.

The resolution passed 5-1, showing Ward III councilor Jeff Helgeson that the city is “business-friendly”. Mayor MaryJane Dolan was absent and Vice Mayor Beau Wright opposed the measure.

Wright said during the meeting that he fully supported the resolution, but voted against because Dolan had asked city manager Wynter Benda to be present for the vote, which Benda said didn’t happen until the council’s regular December 13 meeting would .

The measure, which goes into effect with the 2023 business license tax laws, will eliminate the tax for 1,033 Hill City businesses.

Treasury Commissioner Mitch Nuckles, citing 2022 royalty tax statistics, said removing that tax means the city will lose $135,418 in each future fiscal year it is implemented. This number could fluctuate depending on how many companies fall into these tax brackets in a given year.

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For businesses with gross income of $10,001 to $50,000, the tax was $30 per year. Businesses with gross revenues between $50,001 and $100,000 paid a $50 royalty, while businesses with $100,001 to $150,000 paid a $160 royalty.

While there was consensus in the council that the city should abolish the tax up to a point, the debate ultimately boiled down to what the limit for abolishing the tax would be, with councilors eventually agreeing on the high end of US$150,000.

At a previous meeting, council members flirted with the idea of ​​removing the tax only for companies with less than $50,000 in revenue. That move would have meant the city would lose an estimated $35,250 each fiscal year.

At one point during Tuesday’s discussion, a substitute motion was on the table to waive the tax on corporations doing business with less than $100,000 in gross revenue, tabled by District II Councilman Sterling Wilder and supported by At- Large Councilor Treney Tweedy was brought up for discussion.

Wilder said this would give the city more time to see the impact in fiscal 2023 and then decide to ramp up to $150,000.

The replacement motion failed by a vote of 3-3, with Helgeson and Faraldi opposed, opting for the higher tax bracket, and Wright opposed for reasons similar to his other vote.

Helgeson was the main voice pushing for the tax to be scrapped for 2023 rather than wait another year.

“This is for 2023; let that begin now,” said Helgeson. “We have a surplus of $43 million. We now have an opportunity to take action after the government has shut down many of these businesses that are shutting down and shutting down everywhere. Let’s do something to put things right.”

Benda, citing his obligation as city manager to protect revenues and ensure the city has the resources to meet its expenses to carry out day-to-day tasks, warned city councilors could commit to eliminating up to $150,000 in dollars to decide.

During the council discussion, Helgeson pointed out that total revenue from losses accounts for only about 0.3% of the city’s $43 million in excess revenue from fiscal 2022.

While Benda recognized that some might consider the roughly $135,000 a “de minimis” amount, he said those totals ultimately add up to a number that matters over the long term.

With the resolution passed, affected companies can expect to no longer have to pay this trade tax from the 2023 draft legislation. To learn more about local business tax, visit the City of Lynchburg’s local business tax page on its website at www.lynchburgva.gov.

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