Archived Story

Kay shares proposal with ED board

Published 8:49pm Monday, April 15, 2013

City Manager Josh Kay introduced Washington’s proposed privilege license fees to the Beaufort County Economic Development Board at its monthly meeting.
Kay started his review of the proposal by saying it was an effort to improve what has long been a problem.
“The privilege license in North Carolina is a convoluted mess,” Kay said. “I say this because we’re already starting with a game that is rigged.”
The proposed schedule is Washington’s attempt to make the fees fairer to small businesses.
“All we’re trying to do here is take an inequitable game and make it more equitable,” Kay said. “And help our small businesses.”
Under the proposed fee schedule, service establishments, retail merchants and wholesale merchants would pay $50 for up to $80,000 in annual sales. For a business that has $80,001 to $1 million in annual sales, the fee would be 35 cents for each $1,000 in sales. For a business that has $1,000,001 to $15 million in annual sales, the fee would be 70 cents for each $1,000 in sales. A business that has more than $15 million in annual sales would pay $1 for each $1,000 in sales.
The maximum any business would pay would be $20,000.
For a manufacturer, the fees for the other categories would apply, but with a maximum fee of $10,000. The fee for each Internet sweepstakes machine is $1,000.
EDC director Bob Heuts asked Kay to consider revising the proposal to decrease the fees paid by manufacturers because it would detract manufacturers from relocating or opening a business in Washington.
Kay said Washington has 455 businesses that are required to pay for a privilege license. Thirty-two of the businesses would see an increase under the proposal.
City Councilman Doug Mercer, a member of the EDC advisory board, also addressed Heuts’ concern.
“When you look at what we’re doing, in the communities across the state, we’re in line with those communities,” he said.
Heuts said that was the problem.
“It’s the competitive edge that I’m looking for,” he said. “The profit margins with which some of these people are working, is unbelievable. A fee like this could be the deciding factor.”
Mark Hamblin, who sits on the state economic board, took issue with the location of the business park.
“The fact that this park is within the city limits is crazy,” he said. “It seems to me that this is a double-whammy for folks.”
If the proposal is approved, Kay said there were still creative ways that the city council could help attract new businesses. Hamblin said there were no guarantees of that if the faces on the council changed.
Mercer said he likes to look at the communities that would be affected by the proposal. In this case, the numbers were clear.
“Ninety-five (percent) are going to be happy, five are going to be unhappy,” Mercer said. “Lets go with 95.”

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