FENWICK ISLAND – Officials in Fenwick Island last week approved on first reading an ordinance change that would increase gross rental receipts.
Last Friday, the Fenwick Island Town Council voted unanimously to the first reading of an ordinance change that would increase taxes for rentals in both the commercial and residential zones.
The ordinance change includes a .5 percent tax increase for the rental of rooms or suites in any motel or hotel in the commercial zone, a .5 percent tax increase for the rental of single-family dwelling units and nonconforming dwellings in the commercial and residential zones, and a 1 percent tax increase for the rental of any other property in the commercial zone.
While the council noted the issue was discussed at several Finance Committee meetings over the past year, Tim Collins, chair of the town’s Business Development Committee, argued many business owners were blindsided by the proposed changes.
“I don’t think any business people know that this was in the works,” he said.
Collins explained a 1-percent tax increase would hurt small businesses in Fenwick Island.
“That goes directly to the small businesses that are in Fenwick Island, the people that have the 1,200- to 1,500-square-foot stores,” he said. “Most of the landlords have leases where it passes straight through.”
Councilman Richard Mais, who chairs the town’s Finance Committee, justified the increases.
“We wanted to look at all of the fees across the board,” he said, “what we were charging, what neighboring towns were charging, and we tried to tweak them and come up with reasonable adjustments.”
Finance Committee member Richard Benn added that tax rates were lower for rental properties in the commercial zone.
“Residential is 8 percent and commercial is 4 percent,” he said. “It was 7.5 percent and 3 percent.”
While she admitted the town may have failed to keep the business community informed, Councilwoman Julie Lee argued for the increases.
“Our fees have not been increased since 2002,” she said. “For 15 years these fees have not been raised.”
Town Manager Terry Tieman said she would share any updates that would affect business owners at future Business Development Committee meetings.
“We’ll pledge to do a better job of communicating,” she said.
The council voted 7-0 to approve the first reading.
