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Gainesville considers business tax increase
Officials blame states immigration law for higher administrative costs
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Gainesville City Council meeting

When: 5:30 p.m. Tuesday
Where: Public Safety Complex (Gainesville Justice Center), Municipal Court Room, 701 Queen City Parkway
More info: More information online

Taxes are poised to go up on local businesses in the city of Gainesville by $10 to $50 a year, and city officials are blaming the Illegal Immigration Reform and Enforcement Act of 2011 for the potential increase.

Gainesville City Council will vote on the proposed tax increase for the city’s annual occupation tax at Tuesday’s council meeting. The increase would amount to an average of $20 for each business, according to city estimates.

The increase would serve to cover the extra administrative costs that officials say are incurred from paperwork required by the controversial House Bill 87.

Melody Marlowe, director of the Gainesville Administrative Services Department, said compliance with HB 87 is increasing the workload on her department in verifying proper immigration paperwork for city businesses and for companies the city does business with.

“While the intent of that bill may have been good, it has created an administrative nightmare for state departments, state agencies and all local government throughout the state of Georgia,” Marlowe said at a City Council work session Thursday.

Mayor Danny Dunagan said of the law, “It’s not just costing us. It’s costing others we are doing business with.”

The city’s occupation tax is an annual fee charged to businesses within the city limits. Marlowe said it is similar to a business license fee.

Current rates run $125 per year for businesses with only a single employee to $9,990 for companies with 1,000 employees or more.

The proposed ordinance would increase the tax for that single-employee business to $135 and the 1,000-plus company to $9,950.

The city estimates the increase would generate about $40,000 in additional revenue, which officials say is needed to make up for staff time spent dealing with the extra red tape handed down from the state legislature with the new law.

City Council Member George Wangemann called the bill “totally unfair” because it pushes the cost burden onto local governments.

“It’s an unfunded mandate,” he said.

Marlowe said compliance with new immigration laws is causing an increase in 610 hours a year on verifying state requirements for business licenses and 680 hours on checking credentials on city vendors.

As part of the new law, the city is required to process local business affidavits swearing compliance with the immigration law. Similar paperwork for federal law also is taxing city staff.

Much of that time is spent when businesses send in incomplete applications, Marlowe notes.

The city also has to verify that any money it spends on goods or services with businesses inside or outside city limits is not going to any that violate immigration law. The city uses about 2,300 such vendors.

The paperwork that vendors have to fill out before the city can do business with them is 15 pages long. Before federal and state immigration regulations tightened, Marlowe said the form was only four pages.

If passed, city officials may seek an additional staff position for the administrative services department.

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