AGENDA REPORT
DATE: May 28, 2024
TO: City Commission
FROM: Bill McDaniel, City Manager
SUBJECT: Public hearing on an amendment to Article IV of Chapter 66, Plant City Code regarding business taxes
EXECUTIVE SUMMARY:
Article IV of Chapter 66 of the Plant City Code provides for an annual business tax for businesses that engage in or manage and operate within the City. There are 314 categories and a business can fall into more than one category. During review and comparison to other agencies, staff found the merchant category to be out of line with other categories. When a business classified as a merchant sells goods, either wholesale or retail, the fee is based upon the value of stock carried, a methodology established in 1998. The value of stock carried by local businesses continues to rise, thus causing an undue financial burden to the business community. These businesses produce revenue, hire employees, sell taxable goods, and provide other positive financial impacts to the community.
Although a distribution center or a manufacturer could also provide services as a wholesale merchant, the code was not clear whether these businesses could be considered a merchant when carrying inventory for distribution solely to their business.
The ordinance revises the following Sections:
• Updates Section 66-121 to clarify that a distribution center or manufacturing business, which holds its inventory for distribution solely to the same business shall not be considered a wholesale merchant.
• Updates terminology language in Section 66-136 regarding replacing lost receipts.
• Revises Section 66-140 (181) to provide that merchants to be taxed up to a maximum value of inventory of $385,000.
Below is a comparison of tax imposed on three different merchant business in the surrounding jurisdictions:
Business tax revenue would decline $442,000 annually, which would be offset by other taxes generated by a thriving business community.
RECOMMENDATION:
That the City Commission adopt an ordinance amending Article IV of Chapter 66, Plant City Code regarding business taxes.
FISCAL IMPACT:
Although there would be a revenue reduction in the General Fund budget for this line item, there would be other economic benefits to the community resulting in an increase in revenues for other line items, such as, utility fees, franchise fees, sales tax, and property tax.
Prepared by: Diane Reichard, Chief Financial Officer