It’s pro-business day at Lacey City Council on Thursday, when the council is set to weigh whether to approve a three-year business and occupation tax exemption for startup businesses in the city.
And in a related move, the council also will consider a $10 annual renewal fee for business licenses to help offset the B&O tax exemption.
If approved, both the city tax exemption and the renewal fee will take effect Jan. 1, 2015.
The B&O tax exemption is designed to give new businesses a helping hand, as well as possibly attract more businesses to the city. It also, if approved, would further promote a business-friendly image of the city, finance director Troy Woo said Wednesday.
The tax exemption applies only to new businesses that gross less than $500,000 yearly. If the business were to exceed that amount during the exempt years, it would have to pay the B&O tax.
Other reasons for the exemption: The B&O tax is widely loathed by business owners because they have to pay it whether they make money or not, and it’s viewed as an administrative burden, Woo said, because business owners have to fill out B&O tax paperwork wherever they do business.
Lacey Chamber of Commerce past president and local business owner Lowell Gordon, who provided input to the city on the tax exemption, echoed Woo’s comments, saying the tax exemption sends the right message.
“I think it’s more of a perception thing than anything,” Gordon said, adding that it shows the city is willing to help the business community.
The exemption, if approved, will cost the city about $30,000 in annual revenue, Woo said, but they plan to make up the difference with the $10 annual business license renewal fee.
The city currently charges a one-time business license fee of $25 for those businesses in the city and a one-time $10 business license fee for those outside the city limits. But the city is proposing a more uniform approach: a $25 business license fee for businesses inside and outside the city limits and a $10 annual renewal fee for both..
Thursday’s council meeting is set for 7 p.m. at Lacey City Hall, 420 College St., Lacey.Rolf Boone: 360-754-5403 firstname.lastname@example.org