Largo steps up efforts to collect business taxes

City commissioners urged staff to move forward with a plan that utilizes both education and — if necessary — enforcement to help staff collect business taxes.

LARGO — Collecting business taxes in a city the size of Largo is not an easy job for members of the Community Development department.

Especially since all 3,000-plus businesses that operate in the city are required to pay the fees, which vary depending on the type of business, square footage and number of employees.

The city’s building official, Robert Hatton, who is in charge of collecting those business tax receipts, added that a lack of knowledge and, in some cases, compliance makes that job even more difficult.

Those challenges end up costing the city money, he told city commissioners Aug. 13 during a work session at City Hall. 

“Over the past five years, there’s been a steady decrease in revenue collected and a decrease in the number of registered businesses,” he said, noting that the fees generate between $600,000 and $700,000 for the general fund each year.

For those reasons, commissioners urged staff to move forward with a plan that utilizes both education and — if necessary — enforcement that could include a $250 fine to collect the revenue.

Collecting money and information

Because of the decline from fiscal years 2015-2018, which dipped nearly $24,000 in revenue and 900 registrations, several departments and Largo Fire Rescue increased their efforts in FY 2019 to educate new and existing businesses about the importance of paying. 

Besides being an important source of revenue, Hatton said the data collected during the process improves public safety.

“That information provides critical information to police, fire rescue, emergency medical services so they can render assistance in the event of an emergency,” he said. “It also protects these first responders because they know where they’re going.”

Hatton said the city’s efforts in FY 2019 paid off in an extra $80,000, which was in part due to a few apartment complexes and larger businesses paying back taxes and late fees.

The collection process for FY 2020 began in the last week of July, when Hatton said the city mailed out about 4,400 tax receipt renewals.

For those who don’t pay, Hatton said education will be the first step.

“When I look back at my 11 years here … once people know there’s a tax and they’re required to pay for it, they typically have done that,” he said.

The Community Standards division, formerly known as Code Enforcement, would step in when education isn’t enough.

Community Standards Manager Tracey Schofield said he doesn’t anticipate the division getting involved until mid-January or February, at which point the Building Division will give him a list of businesses code officers need to visit.

“We’re hoping, obviously, that it’s not a thousand businesses,” he said. “Because, as you can imagine, that’s a very daunting task for the Community Standards Division with four or five investigators to try to go out and handle a thousand businesses on one day.”

What would follow would be a combination of education, verbal warnings and, ultimately, a notice of violation that could lead to a hearing with the city’s special magistrate.

Schofield said the goal is compliance, so his division will work to be patient and understanding of any extenuating circumstances.

“Some of these businesses might be waiting for documents from the state, documents from some certain corporate holdings, whatever they need to finish their process,” he said. “If they have that issue, then we’ll give them extensions. There’s not going to be a drop-dead date.”

After five notices, however, businesses will be subject to a one-time $250 fine, which is the most the state allows.

Since business taxes are not uniform and can differ from one municipality to the next, commissioners also approved Hatton’s recommendation of instituting a limited amnesty program to assist established businesses that have never had a business tax receipt.

Mayor Woody Brown, who owns Main Street Chiropractic, added that he would like to make it easier for businesses to find out online how much their taxes will be.

“I think it would be good to have that list more accessible,” he said. “Some people are afraid of paying their business tax, I would suspect, because they think it’s going to be thousands of dollars when it’s really a hundred bucks.”

Hatton said the changes will require a resolution and amendments to the city’s Code of Ordinances that will be reviewed by the city attorney and Planning Board before returning to the commission for a final vote.