Thousands need to register with city; service providers now covered by business license
CHARLESTON, W.Va. -- Upwards of 5,000 doctors, accountants, lobbyists and other service providers will soon be getting letters from Charleston City Collector Tonya Cotton, telling them they need to obtain a city business license for the first time under an ordinance passed last month.
The good news is it won't cost them much -- $20 a year.
That's 20 percent less than originally intended. After council members passed a bill to license service providers on April 15, city leaders learned the $25 fee written into the bill violates state law.
So a week ago, another bill was introduced into council to lower the fee to $20. Council is expected to pass it next Monday.
"This comes out of an initiative from Wheeling, a home rule initiative," City Manager David Molgaard said. "The Legislature then turned around and passed a statute to allow all municipalities to do that. We were aware of that and we took the initiative."
The idea was to streamline the city's complicated business licensing system -- a mishmash of 49 different rates and classifications -- into a single class with a standard fee.
But Charleston officials initially overlooked one of the provisions of HB 2075, passed in 2011, that says cities that adopt a one-size-fits-all business license can charge no more than $20.
"I believe [City Attorney] Paul Ellis picked up on it," said Finance Director Joe Estep. "He sent an email to me."
Working with the city collector's office, Estep was preparing to mail letters to nearly 7,000 Charleston businesses -- renewal notices to those already registered and alerts to service providers covered under the new ordinance. He's changing the dollar amount of the fee and waiting for council's final approval of that change -- just to be sure.
The collector's office typically sends out renewal notices to registered businesses around this time every year, Estep said. To get a new license, businesses must have paid their business and occupation taxes, fees, interest and penalties in full, he said.
"There are about 2,200 [businesses registered] under the old ordinance," Estep said.
"It was anticipated about 4,800 new licenses would be involved -- attorneys, doctors and such, accountants, but there are a whole list of services out there, tow truck drivers. You could make up your own list.
"We've been working on our list already. We examined our B&O tax file and weeded out, using physical location, those not operating in the city. They are ready to go. We want to give people as much time as possible to get used to this in time for July 1. The code says the fee must be paid by June 30."
Last year, the 2,200 licensed businesses paid a total of about $61,300 in fees, Estep said -- an average of less than $28 each.
That could rise to as much as $140,000 this year after adding in all the service providers, even with the fee cut from $25 to $20.
Still, that's just a drop in the bucket of the city's $87.3 million total budget.
"It's not one of our major revenue streams," Estep said.
Reach Jim Balow at email@example.com or 304-348-5102.