Minutes 04/23/1968 - Laserfiche WebLink

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~!n/J' kJ >-J \.. TUESDAY APRIL 23, 1968 monthly tax of $2.50 on each electric bill, which is the equivalent of a 10% tax on a bill of $25.00 per month; on all bills which exceed $25.00 per month there should be established and charged a 10% tax on all of the first $3,000 per month (in lieu of the $2.50 minimum) plus 1% of that portion of the bill which exceeds $3,000 per month. Such a rate structure would product about $254,500 per year, or about $73,300 more than is produced by the eKisting electric tax. 3. Suggested 10% Tax on Telephone Bills 0I11y the base amount of a telephone bill is taxable on the local level, meaning that toll charges could not be taxed. A suggested 10% tax on each telephone bill in the City would produce about $51,400 annually. If the State permits a rate increase the amount of the local tax would be correspondingly increased. 4. Suggested Tax on In-City Customers of the Gas Company A 5% tax on gas bills would produce about $21,000 of revenue annually, but because of an unusual load situation as it pertains to at least one industry already, it appears to be important and is therefore recommended that the ordinance provide for the 5% tax to apply against only the first $2,000 of any monthly bill, with an additional t of 1% to apply against the balance of any monthly bill. 5. In General If Council were to establish the utility tax structure as suggested, it would mean a net of about $165,000 of additional annual revenue. By comparison with an alternate source, the raising of the rate on Real Estate and Public Service Corporations from the present $2.00 to $2.25 per hundred, the limit set in the City Charter, would produce only $142,500 of annual revenue. If it should be Council's decision to revise the utility tax structure, the securing of maximum benefit during the next fiscal year would involve adoption of an ordinance at the first meeting in ~y, if at all possible, in order to afford time to establish office p~ocedures necessary before the City and the private utilities could actually levy and collect the tax. Based on its present understanding of anticipated revenues and probable appropriations for the next fiscal year, the Committee recommends no change in the gross receipts ordinance, other than the previous recommendation as to contractors. Representatives of both Lee Telephone Company and Southwestern Virginia Gas Company spoke in opposition to the utility tax rates suggested in the Committee report, advocating a lesser rate if such a tax is imposed. Council also