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Flowery Branch considers business tax revision

City Council approves 1st reading of plan; vote due May 22

POSTED: May 1, 2014 8:28 p.m.

Flowery Branch City Council approved the first reading of its proposal to revise the city’s occupational tax structure at its Thursday night meeting.

The move is designed to bring business license fees more in line with Hall County and surrounding cities. Rates for small businesses are now much lower than other municipalities, but larger businesses carry a higher rate.

City officials are seeking greater parity to maintain tax receipts and provide greater incentive for larger business to relocate or annex into the city.

Last month, Finance Director Jeremy Perry outlined three options for council to consider, expressing rates in various ways to maintain returns.

Council members weighed in on the benefits of attracting a larger employee base, but also expressed commitment to their current largest demographic — small business owners with fewer than 10 employees.

Agreeing that a middle ground should be established, city officials said there may be an initial slight shortfall in tax revenue, but agreed the benefit ultimately outweighed any loss.

The rate structure has not been revised in nine years, according to Perry. City Manager Bill Andrew earlier said that with at least one area business considering annexation, it was time to act.

“We felt it was time to look at an update, whether it will lead them to annexing in, or not,” he said.

Forty-four percent of businesses within the Flowery Branch city limits have one employee; 75 percent include 10 or fewer, Perry said.

A revision in the rates will mean a modest increase for smaller businesses.

A second reading will be held during the council’s next meeting, rescheduled to May 22, with time for public comment. A final vote is expected then.

In other council business, City Planner John McHenry reviewed the increase in building permit returns over initial projections. “We only, actually, budgeted $50,000 for fiscal ’14,” McHenry said.

Returns are well over $30,000 beyond that figure, at $86,000. The fiscal year ends June 30.

“We’re basically doing what the housing market did before the recession,” said McHenry who noted continued brisk movement in the Sterling on the Lake community, as well as the Clarkestone Village subdivision.


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