Pevely’s New Business Tax Proposal

11 Dec

After failing in April to hike license fees for local businesses, it was clear that Pevely was going to try again. Their new proposal is out now. Last time, the city hoped to charge $0.75 per $1,000 gross receipts per year. This time, it will attempt to win approval next April for a $0.50 charge per $1,000 gross receipts for general merchants (minimum $75), and $100 per employee for manufacturers, with a $5,000 cap. Currently, the city charges a flat $40 annual fee. Here’s how the tax proposals compare:

Receipts        Current fee             Failed fee                Proposed fee (for merchants)
$300,000            40                           225                                   150
$500,000            40                           375                                   250
$4,000,000        40                       3000                                2000

So there’s a small reduction in the fee hike versus the last vote. This would still, however, represent a large increase, and the larger your business, the larger the jump. This is definitely a progressive tax. For manufacturers, the addition of a $5,000 cap is a big deal, and it means that businesses will not be penalized any employees above 50 the business has on the payroll. Why a cap for manufacturers, but not for merchants? I don’t know how much money Pevely’s biggest businesses bring in for revenue, so it’s hard to say who will get hit and for how much, but we know that in this day and age, everyone loves manufacturing jobs, because they pay relatively well and offer employment to the unskilled. Pevely hopes that these adjustments are enough to win voter approval; I suspect the city is trying to do the bare minimum in that regard to maximize revenue. Last time, the city lost 65-35%, though, so they have a lot of ground to make up.

Pevely is also hoping to institute a 5% hotel/motel tax, known as a tourism tax. The city expects this tax to bring in $20,000 from the one hotel in town. Pevely is hoping to jump on this popular tax bandwagon. People love taxing outsiders, and this one is sold by saying, “Hey, you don’t have to pay this tax, just those out-of-towners do!” Never mind that people from Pevely will have to pay this to other cities when they travel. Festus recently boosted their tax from 2% to 5%.

On a side note, I love the use of the term “tourism tax.” The thought of people going to these cities for the purpose of tourism is amusing. I can see people with their maps and cameras saying, “Where is that city park?”

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2 Responses to “Pevely’s New Business Tax Proposal”

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  1. Election Slates Set for April « Jefferson County Penknife - January 17, 2013

    […] agreement with business leaders on a business tax proposal. It has been reduced a bit from what was originally planned to be placed on the […]

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  2. Things Heating Up in Pevely | Jefferson County Penknife - February 22, 2013

    […] – he was merely afraid it would doom the April ballot initiative to hike the city’s business license fees. Maybe this subject was the cause of Shelley’s […]

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