Council OK’s business license requirement
Tonganoxie will be required to obtain a business license.
On Monday, city council members unanimously approved the license requirement. Council member Pat Albert was absent from the meeting.
Council members agreed that the license would not cost business owners, but failure to obtain a license does come with a possible fine between $100 and $500.
City Administrator Chris Clark, who proposed the business license, said it should prove to be an effective way of tracking state sales tax collections in the state. Clark said the state is not diligent about determining who has paid sale tax in Tonganoxie, so the burden falls on city officials.
"There are businesses that are operating in the community that are not up to date with their sales tax," Clark said.
He called sales tax collections "critical" for the city, saying they account for about 30 percent of revenue for the city.
He said requiring business licenses is one way for the city to establish a data base to compare with sale tax lists obtained from the state.
Business licenses, required of general businesses, as well as home-based businesses, will be issued annually.
The business license application seeks information about the type of business, as well as information on whom to contact in an emergency.
Originally, council members considered charging a $25 fee for general businesses and a $10 fee for home-based businesses to obtain a license. But after discussion Monday, they rejected the idea of charging a fee.
Council member Kathy Graveman, who made the motion to approve the licenses, said she's concerned that they might not prove effective in helping collect sales tax revenue. And she said she views it as one more hoop for businesses to jump through.
"The people who aren't paying sales taxes aren't going to get a business license either," she said. "It's not the $10, it's not even the $25. It's just that we keep going back to businesses every time we turn around."
Sandy Coffin, Tonganoxie, questioned whether all businesses should be required to obtain a license when the city's goal is to ensure that a few are paying sales tax.
"Are there that many businesses not paying sales tax in the area that would warrant all the businesses being penalized," she asked.
Clark said the city is missing out on $10,000 a month in sales tax.