Owners of single-family homes who rent out any portion of their residence must pay a business license tax to the city, beginning next month.
The new tax requires homeowners to pay $12 for every $1,000 of gross receipts. The annual tax is part of the city’s municipal code but has not been collected from single-family homeowners in the past, said Don Oblander, the city’s finance director.
In the past, duplex owners were required to pay the tax if they rented the other half of their residence, but single-family homeowners were not required to pay. “Taking the step to collect from single-family homeowners will treat all city property owners equally,” Oblander said.
Because the tax is new, the city will give homeowners until Jan. 1 to apply for a business license for the fourth quarter of 1993. But the business license tax for 1994 must be paid by the normal renewal date of Jan. 31 or penalties will apply.
The city expects to bring in about $150,000 from first-year receipts, Oblander said.
The tax is part of the city’s efforts to cut costs and raise new funds to offset the a projected $1-million budget shortfall this year. During budget hearings in June, the City Council implemented new fees and raised others. Since then, the city has also offered some of its employees early retirement incentives, left some vacancies unfilled and laid off 14 people in August to balance the 1993-94 budget.