PROPOSED ORDINANCE NO. 16-016 - SECOND READING -  PUBLIC HEARING Approve amendment to  Code of Ordinances, Chapter 13, Local Business Tax Receipts, Section 13-4, Classification and Fee Schedule to provide for a five percent (5%) increase in Local Business Tax Fees.

The Local Business Tax fees for the City of Boynton Beach were most recently modified on July 2, 2013, by Ordinance 13-022.  Pursuant to Florida State Statute 205.0535 (4), the governing body of a municipality may increase by ordinance the rates of Local Business Tax receipts by up to five percent (5%) every other year.  Prior to the last increase in 2013 for FY 13/14, staff proposed increases in 2008, and 2009, and by the Financial Advisory Committee in 2010, 2011, and 2012, but those recommended increases were not approved by the Commission due to the state of the economy.

As the economy continues to recover, staff is again recommending Business Tax fees be increased as allowed by State Statute.

An increase in Local Business Tax revenue contributes to the general fund balance, hereby, allowing for a pass-through to the city’s Economic Development Fund as incentives for the business community to ensure retention, growth, and new business.  The increase will also help offset additional administrative expenditures as it relates to renewals, inspections, public services and other administrative duties funded by the general fund.

Should this request be approved, a typical Local Business’s Tax fees would increase $1 to $15 per receipt annually.  For example, a rental would increase $1.76; administrative office, $4.63; contractor, $12.84; professionals, $10.31; retail not exceeding $5,000, $5.13; retail more than $5,000, for each additional $1,000 or fraction thereof $.27.  The cumulative increase of business tax revenue is estimated to be $77,378.

For comparison purposes, our neighboring municipalities Greenacres and Delray Beach is currently seeking approval by its Commission for a 5% increase that would affect FY 16/17 Local Business Tax fees.  The City of Boca Raton, adopted their last 5% Local Business Tax increase FY 00/01. The City of Lantana adopted their 5% Local Business Tax increase FY 15/16.  The City of Lake Worth, adopted their 5% Local Business Tax increase FY 15/16.

FY 15/16 projected Local Business Tax revenues are estimated at $1,547,558.47.  A five percent (5%) increase in Local Business Tax would result in an estimated $77,378 in additional revenue to the general fund bringing the total estimated Local Business Tax revenue to $1,624,936.47.