“This privilege license stuff is ridiculous,” Mayor Clem Seifert said Monday night.
The mayor jumped into the issue after City Manager Eric Williams reported on his attempt to crack down on known businesses that were late with last year’s privilege license payments. Williams sent letters to 15 violators and gave them until last Friday to pay up.
Of the 15, two paid, two have promised imminent payment, and two have not paid. Four have closed down, and five others are suspected of being out of business.
Deryl von Williams, who had refused to pay for the privilege license because of the inconsistencies in the Henderson ordinance, said the city’s problem is that it never talked to small-business people last year when the council was considering an overhaul of the privilege license system.
She called Monday night for a flat per-business fee, and she recommended using the Yellow Pages as a guide to the businesses in town.
Seifert illustrated the problems of taxing businesses based on their merchandise,
Wal-Mart has three pages of categories for which it’s charged under the city’s privilege license ordinance, but Seifert said there could be five pages of additional categories. For example, Wal-Mart isn’t charged for the privilege of selling guns and knifes, for operating vending machines, or for operating a beauty salon.
“I bet there’s a thousand dollars of privilege license fees that they’ve got in their store that we’re not charging them for,” Seifert said.
Seifert said Henderson has several issues with the privilege license.
The first is whether every business that is supposed to pay is paying, and the mayor said he’s sure many are not.
The second is whether businesses are being accurately assessed the fees for their privilege licenses. Seifert said Wal-Mart and inconsistencies among the few florists and gift shops whose records he pulled show that the assessments aren’t accurate.
The third is whether the city is collecting the fees from the businesses it knows. Again, the mayor has his doubts.
“Is it worth it?” Seifert asked.
He said there’s got to be a better way than to have a full-time city staffer go around town to poke into businesses and try to find all of the categories that cover their operations.
Last year the council turned to the privilege fees as a way to increase revenue. After considering a license fee based on a business’s gross revenues — opposed by the Henderson-Vance Chamber of Commerce as too intrusive — the council unanimously voted to seemingly keep things simple and just double the existing fees.
The city budgeted for $88,000 in privilege license revenue this fiscal year. But the renewals aren’t due until May and June, Williams said, so it will difficult to tell before the fiscal year ends how accurate the figure was.
Recent complaints, including the mini-crackdown the city manager tested in the past month, exposed the complexity of privilege licenses in Henderson and the enforcement problems. For example, the city has no master database of local businesses and no way to cross-reference the lists various departments hold.
“It’s a mess,” Seifert said.
“You think it’s a mess. It’s a bigger mess trying to fix it,” council member John Wester said.
Unless the city charges a flat fee for all businesses that aren’t covered by state-set privilege license fees, Seifert said. He mentioned $50 and $100 as possibilities.
But no changes to the system are likely before this year’s privilege license payments are due.
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