WESTMINSTER : New Business License Formula Considered

In an effort to increase revenue, the City Council today will consider an ordinance that would require business owners to pay a license tax based on gross receipts instead of a flat rate.

City officials estimate that the city could bring in an additional $500,000 a year with a business license tax based on 0.1% of gross sales or a minimum tax of $100 a year--double the current rate.

The city is facing a $1.9-million shortfall for fiscal 1995-96, and the higher income from license fees would help to make up part of the deficit, officials said.

Enterprises with revenue of less than $100,000 a year, which make up about 40% of all city businesses, would still pay a $50 license fee plus $15 to renew the permit next year.

For fiscal 1996-97, the license tax for such businesses would increase to $75 a year and to $100 in fiscal 1997-98, officials said.

The Westminster Chamber of Commerce is supporting the proposed $100 minimum tax but wants the fees evaluated in two years to determine their effects on the business community and whether the city has achieved its revenue goal.

“We generally agree it is time to consider a new fee schedule in support of all the services the business community utilizes,” Chamber President David DiProfio wrote in a letter to City Manager Bill Smith.

However, the Vietnamese Chamber of Commerce is opposing the proposal because members say city officials might have to examine businesses’ books to determine accurate reporting of gross sales, which would violate companies’ privacy.

Businesses will be provided with forms to report sales and determine the taxes due, officials said.