Aberdeen OKs New Tax Hike on Big Retailers
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Big-box retailers and other high-revenue businesses in Aberdeen could pay significantly more taxes next year.
The town’s Board of Commissioners on Thursday unanimously approved an ordinance that will charge businesses a privilege license tax based on a percentage of all gross receipts over $500,000.
All gross receipts over $500,000 will be taxed at a rate of 50 cents per $1,000. Revenue under $500,000 will be subject to a flat fee only.
For example, a retailer with yearly gross receipts of $45 million would be liable for the flat privilege license tax of $50 on its first $500,000 of gross receipts and a gross privilege license tax of $22,500 on the remaining $44.5 million.
Gross receipts will be the amount the business reports on its state income tax return, or on the federal return filed with the state return if the state return does not separately state gross receipts for the most recently completed tax year, according to the ordinance.
The ordinance also doubles the flat fee for all businesses. The prior fees were between $25 and $100.
Aberdeen Town Manager Bill Zell said the privilege license tax will help the town generate more money without raising residential property taxes.
“Aberdeen has been charging them (businesses) the minimum for years,” he said. “This is a revenue source that we have not yet tapped.”
Zell told the board he thought the change would increase the town revenue significantly. He estimated that revenue from the privilige license would triple to about $120,000 a year.
Zell said he didn’t know how many local businesses have annual gross receipts of more than $500,000, but said he suspected some of the big-box retailers, like Walmart, Harris Teeter, PetSmart and Best Buy, do.
The change is effective July 1.
Zell said the town will send notification letters to all businesses beginning next week.
In other business, the town commissioners voted 4-1 to approve a new ordinance regulating the keeping of chickens and roosters.
Commissioner Alan Parker voted against the ordinance because he said it gives amnesty to rooster owners who are violating the old rules, which allow the male birds if the owners meet other requirements.
The new ordinance makes owning roosters illegal but does allow for any current roosters — whether being kept legally or not — to be legal until the bird dies. Once dead, the rooster cannot be replaced. Roosters can live six to eight years.
The commissioners questioned the ability to enforce that portion of the ordinance.
“How do we know if a rooster dies at night, that it isn’t replaced the next morning,” Commissioner Robbie Farrell asked.
Town attorney T.C. Morphis said the ordinance isn’t perfect.
“There are potential enforcement problems with this ordinance,” Morphis said.
The town will not actively seek out violators, but rather investigate only when complaints are filed.
A vote on the ordinance slated for earlier this month was delayed when Parker expressed similar concerns.
A neighborhood dispute last summer brought to light concerns about the ordinance and how the town regulates fowl.
Contact Tom Embrey at tembrey@thepilot.com.
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Comments
Bflat 1 year, 1 month ago
...AND, consumers can expect higher prices to offset the increase. So, in this economy, just what we don't need.
nchoghunter 1 year, 1 month ago
Duh..., Lets see, where do the big retailers get the money to pay the new tax? Lets not raise residents property tax, that would be obvious. Instead, lets nickel and dime them every time they shop. Another example of gutless politicians kicking the can so they don't have to face voters over raising their property taxes. I am surprised they didn't do a "hotel tax" on outsiders visiting the area, that is the standard favorite. One more reason to drive to Sanford or Fayeteville or anywhere but Aberdeen. Vote with your feet!
CNMT 1 year, 1 month ago
I feel this will cause big box retailers to leave Aberdeen or elect not to come here in the first place. And I do agree with other posts - they will just pass the increase on to the consumer by raising prices on merchandise/services. Not necessarily a good move for Aberdeen given the current state of the economy!
theonewithsense 1 year, 1 month ago
Awesome job "tapping a new revenue source"
LOISJANE29 1 year, 1 month ago
We have a small business in Aberdeen and this will result in our fee being 12 times what it was this past year. Thanks, Aberdeen! A very encouraging thing to do in a bad economy. Maybe you have forgotten that we bring in sales tax and property taxes to our community?
molonlabe 1 year, 1 month ago
"Zell said he didn’t know how many local businesses have annual gross receipts of more than $500,000, but said he suspected some of the big-box retailers, like Walmart, Harris Teeter, PetSmart and Best Buy, do."
So he admits that he doesn't know how many businesses this new tax would affect. So Aberdeen passed a new tax and have no idea who it is going to affect? Did they no look into this? We the consumers are going to pay this new tax. Sounds like Zell needs to take Econ 101 over again.
emb6683 1 year, 1 month ago
At least I can deduct a property tax increase from my federal income tax.
The pass down price increases caused by this action will come right out of my pocket and bottom line.
theonewithsense 1 year, 1 month ago
lol gross receipts of $500,000. He suspects some of the big box stores might have gross receipts of $500,000 a year? Really? Do you think Wally World has gross receipts of $500,000 a year. Heck their rent is more than $500,000 a year. Most every small business has gross receipts of $500,000 a year. A small restaurant or retail shop will have to have more than that to stay in business.
Bflat 1 year, 1 month ago
Along with these increases that affects businesses and the consumer are other "value added taxes" such as the one that Moore County slipped into everyone's cable and cell phone bills. Ever notice the Moore County Telecom tax on your cell phone bills? How about the tax on your cable service? All these increases are coming out of your pockets and mine! When will it ever end on all the taxes?
molonlabe 1 year, 1 month ago
Ultimately, people pay taxes not businesses. Businesses pass costs onto their consumers. The businesses that do not will not be in business very long. I think we are missing the point here. They do not want to openly raise taxes on Aberdeen residents when they can raise taxes on Aberdeen residents and everyone else that shops in their jurisdiction. It won’t chase away the big box stores but any potential new small retail businesses may think twice before setting up shop in Aberdeen in the future.
FightFireWithFire 1 year, 1 month ago
"lol gross receipts of $500,000. He suspects some of the big box stores might have gross receipts of $500,000 a year? Really? Do you think Wally World has gross receipts of $500,000 a year. Heck their rent is more than $500,000 a year. Most every small business has gross receipts of $500,000 a year. A small restaurant or retail shop will have to have more than that to stay in business."
Wal Mart owns the property they are on, you can look it up in Moore County GIS. Now their light bill might be $500,000 a year...
And if there is a small business grossing $500,000 a year, I would think that it wouldn't be classified as a "small business".
molonlabe 1 year, 1 month ago
“And if there is a small business grossing $500,000 a year, I would think that it wouldn't be classified as a "small business". FightFireWithFire
This is gross receipts people not net profits. Small business is a company with less than 50 people. So let’s say a company with 25 employees that has gross profits of $500,000 a year. That is roughly $41666 a month. Say 25 employees make an average of $20,000 a year. That is $2083 a month. So pay role is $500,000 a year. This small company will not stay in business.
fugitiveguy 1 year, 1 month ago
"When will it ever end on all the taxes?"
Government will always spend every penny they collect in taxes and then some. Next years budget will be slightly larger than last, and the next and the next. That way, when it comes time to vote they can say"look what I did for you", I am "for the people". Makes you want to vomit.
Courseaire 1 year, 1 month ago
Did any of you do the math? The $500,000 or less gross rev store will pay a $50 flat tax and the $45,000,000 gross rev store will pay $22,550 tax. Not a lot to them, but when added up, may be meaningful to the Abs.
askthis 1 year, 1 month ago
I'm not the biggest fan of taxes myself but I do understand that in order for things to get done money has to be paid. Cops, firemen, sanitation workers or anyone else that works for the Town or for that matter all the material or equipment necessary to in order for these people to do their job. Oh and if driving to a different city is the way you would like to go I would love to see how much money you will save going to Fayetteville compared to your gas bill.