Small Town News

Business license law considered

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The city of Sedona is quickly moving forward with its plan to make business licenses mandatory for all companies doing business in the community.

The Sedona City Council will consider instituting requirements at its Tuesday, Sept. 14, meeting to make mandatory business licenses law.

City Revenue Manager Jodie Filardo said if council approves the business license proposal, it would go into effect the following month in October.

The business license fee would be $25 a year, and other provisions on the licenses have changed over the past few months.

The city decided to move forward with mandatory business licenses for a variety of reasons, including the confusion about who currently is required to be registered, lack of penalties or enforcement language, having no integration with related city processes such as wastewater billing, updating a cumbersome manual process to track businesses, and compliance being less than 50 percent for existing businesses.

Assistant City Manager Alison Zelms said the city has business registrations in place, but instituting licenses and making them

mandatory allows for enforcement.

The changes the city wants include making business licenses mandatory with penalties and enforcement, requiring companies with an Arizona transaction privilege tax number to also have a Sedona business license and putting a process in place where the license can be pulled for nonpayment of city services.

The Arizona transaction privilege tax is commonly referred to as a sales tax, However, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Although the transaction privilege tax is usually passed

City needs to know who owes taxes

an to the consumer, it actually is i tax on the vendor.

Arizona transaction privilege taxes are imposed on persons engaged in certain business classifications, including retail sales, meaning various business activities are subject to a state, county and city transaction privilege tax.

Garage and estate sales will not be forced to obtain business licenses as previously considered, since they now fall under the land development code, Filardo said.

Service industries where no taxable product is sold will riot have to obtain a business license. Businesses like massage therapists and other service industries will be exempt from this proposed law.

"We are trying to mandate licenses for people who owe the city sales tax," she said.

The businesses the city is concentrating on are those that are or should be paying city sales tax.

Filardo said the code should be easy for businesses to understand -- if they charge sales tax, they are required to have a business license.

One reason for the change, she said, is revenues are down and the city needs to know which businesses owe sales tax money.

When asked how the city would be able to find businesses choosing not to comply, Filardo said a listing from the state of Arizona can be obtained for any companies with a tax number.

The city currently wants to educate people how to pay sales tax. Filardo said there seems to be some confusion.

"We are trying to educate the public on how this works," she said. "We are trying to make it pretty straightforward;"

She said the city knows there will be businesses who could be unaware of the new requirement if council approves this next month, and the city wants to work with and help them understand.



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© 2011 Sedona Red Rock News Sedona, Arizona. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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