Late Payment Penalties Mulled For Business License Renewals

BERLIN – Town officials introduced an ordinance this week to increase penalties for merchants who don’t purchase business licenses on time.

On Monday, the council introduced an ordinance to strengthen the late penalties for business licenses.

“We’re recommending a change to the late penalty schedule to assist in more prompt payments,” Town Administrator Laura Allen said. “Currently we believe they’re not set high enough to motivate businesses to pay on time.”

According to Allen, a staff committee was developed last year to review fees and streamline the business license process. The committee determined that the town’s finance department spent a significant amount of time sending out multiple invoices and making phone calls to businesses that didn’t purchase their annual licenses on time.

“While the majority of businesses do pay on time, staff is spending time and energy and money on submitting additional invoices and follow-up phone calls to get folks to pay,” she said.

The town’s business license fee is $75 for all businesses except banks, which are charged $150. Allen said the town’s finance department billed each of the town’s 235 businesses each year and that more than 20% of businesses typically paid late.

As of March 1, 2019, 28 of the town’s businesses had not paid the license fees that were due July 1, 2018.

The ordinance introduced this week will allow the town to increase the business license fee 5% if it’s not paid within 30 days of the date it’s due. The names of the businesses that haven’t paid will also be published at that point.

No payment within 60 days will result in a 12% increase in the fee while no payment within 90 days will result in a 24% increase in the fee. The ordinance also makes nonpayment of the fee punishable as a misdemeanor and reserves the town’s right to transfer the fee and penalties to the business’s water bill if applicable.

“Transferring the late penalties to water bills ensures those penalties will be paid or the property is subject to disconnection for water services,” Allen said. “This approach would only work in cases where the business and property owner are the same.”

A public hearing on the ordinance will be held during the council’s May 13 meeting.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.