Minutes 04/15/1958 - Laserfiche WebLink

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City of Martinsville, Virginia Report to the Committee to Study Business and Occupational License Taxes April, 1955 Introduction To avoid being led dOYnl blind alleys, it is necessary to state brief~ what this report deals with and what it does not deal with. First j_t should be made very plain that it does not deal with the question of whether Martinsville business and occupational license taxes are too high or too low. Tax rates depend primari~ upon what revenue sources are legally available to the taxing authority and how much money it needs. This report ta~:es as an established fact that the City of Martinsville plans to raise from business and occupational license taxes in the future at least as much as it raised from this source in 1954. Another question with which this report does not deal is the question of hardship. It is wholly beyond the scope of this study to investigate the impact of occupational license taxes upon the competitive position of each business subject to the tax or to assess individual complaints in this regard. 0rnat this report does attempt to do is to provide the committee with a plan for distributing the burden of occupational license taxes across the business community on the basis of a principle of equity already determined upon by the l.1artinsville city council. This principle of equity may be stated briefly. All business and occupational licensees should be taxed at the same rate per dollar of business done. If this is thoroughly understood, a great deal of very unproductive argument can be avoided. ( The measure of business done. All business and occupational units are essential~ selling some sort of service to consumers. Some, as the professional, deal in services large~ unconnected with goods. Others, like manufacturers, by the application of productive labor to raw materials, change the form of goods so that they are more valuable to the consumer. Merchants change the time and place at which goods are available. Since goods here and now are worth more than goods somewhere else and sometin1e in the future, the merchant, too, adds to the value of the goods he hancaes. For this addition to the value of stock and trade, the businessman malces a charge which is computed by subtracting from his selling price the cost of the goods to him. This difference betl'leen gross receipts and cost of goods, called value added by handling, is taken as the true measure of the ~nount of business done. (1)