Parish initiates crackdown on deliquent occupational license fees
Published 8:32 am Sunday, August 19, 2012
Washington Parish officials are initiating procedures to cut down on the number of businesses that are delinquent in paying their annual occupational license fees, a decision that should help the cash-strapped government retrieve thousands of dollars currently in arrears.
Parish Council members are also discussing potential changes to the way those fees are structured, including establishing a new fee based on a business’s gross revenue.
Although the exact number is yet to be determined, parish officials acknowledge many businesses currently fail to pay the current $25 annual occupational license fee. To date, at least 40 businesses have been identified as delinquent in their fees, and the investigation is continuing, according to parish finance director Donna Alonzo.
“We saw a lot of people not paying,” said Councilman Ken Wheat. “They must be held accountable. This is not something new. It will feel new to those who haven’t been paying.”
Part of the problem, Alonzo acknowledges, is that many business owners are simply forgetting since renewal notices have not been mailed in the past. However, that changed this past week when Alonzo began sending notices to all business owners.
She said all businesses, whether it is retail; services such as a CPA, attorney or consultant; or manufacturer are responsible for ponying up the fee.
“You have to bill people annually,” she said. “If you don’t people won’t remit payment.”
Alonzo is also recommending the parish change to a fee based on gross revenue of sales based on standards set by the state. She said she researched neighboring parishes and discovered St. Helena and St. Tammany parishes are calculating occupational license fees based on gross revenue of sales, as are the city of Bogalusa and the town of Franklinton.
She said Tangipahoa is charging a fee of $50, with the school board serving as the tax collector.
Currently, the Washington Parish Sheriff’s Office is responsible for the collection of those fees.
Alonzo broke down the new fee structure based on gross sales. For example, she said, the cost for a businesses grossing $1.2 million annually would be $1,200; $500 for a company showing $500,000 in annual revenue; and $120 for $150,000 in sales.
Council Chairman Greg Route said the $25 is too low and his preference is use the gross revenue model.
“We do not want to go too high,” said Wheat, adding that the low cost of conducting business in Washington Parish is an asset for economic development.
“We do want to provide a level playing field,” he added. “The gross may be more fair to a lot of businesses.
“If we don’t have people paying, those that are paying it’s unfair to them.”
Parish officials are hoping the crackdown on those not paying the occupational license fee will also establish a checks and balances system for collection of sales tax revenue. Some councilmen suspect not all of the sales tax revenue that should be collected is finding its way to parish coffers.
“If some of these people are not paying their occupational fee they are probably collecting sales tax and not paying it,” Wheat said. “I’m not accusing anybody. In my opinion that problem needs to be stopped.
“There is a direct correlation between occupational license and sales tax. Some people are not being responsible. The sheriff’s office needs to know that. They need to track these people down.”
Councilman Chuck Nassuer said he hopes businesses report legitimate gross revenue, especially since there is no way of checking their numbers at this point.
“Hopefully most people are honest,” he said. “A lot of people collected sales tax and stick the sales tax in their pockets. It will be hard to stop that. If they are collecting, they should be audited.”
Some of those loopholes may soon be closed, however. The parish has recently hired a code enforcement officer, and a critical part of the person’s responsibilities is to randomly check for licenses. Officials have acknowledged that they are not always aware of every business that opens since some do not obtain a license.
Alonzo said she would be obtaining a database from the sheriff’s department of businesses paying sales tax and compare that list to those who have an occupational license.
Officials are also discussing the type of fines to be imposed for delinquent businesses. Alonzo said at least one parish pulls an operator’s license if the delinquency reaches six months.
“We must have something in place to make these people pay,” Route said. “Nobody should be eight months behind. We should have some kind of fine for that. If you don’t pay the fine will be double up.”