Clarification on business licenses

16 May Clarification on business licenses

Last week’s Gazette Packet news report and my own missive about the City’s new business registration requirement and potential fees for non-profits that compete with the private sector may have led to misunderstandings. I would like to clarify.

First and foremost, all not-for-profits will be required,  like other businesses,  to register with the city. However, they will not pay a fee for any activities that generate income within their core mission from which the Internal Revenue Serve has awarded them the tax exemption providing donors the charitable deduction.

Second, it was implied that Beaufort Memorial Hospital was trying to avoid the registration and being accused of dodging fees. This is not the case.  Because Beaufort Memorial is clearly the largest non-profit organization in the county, outside of federal, state and local governments,  city officials met with BMH officials to discuss the proposal and judge the potential impact.  We agreed that only those activities conducted by BMH that are outside of its mission would be considered for business license fees.  The first and most obvious is that private for profit vendors with contracts to provide services to BMH, not the hospital,  would be held accountable to business license requirements as they have all along.  BMH has supplied the city with the vendor lists and volunteered to keep the lists updated. The second issue is that property owned by BMH but leased to private enterprise would, just like other non profits that own and manage rental properties, would pay a fee on the income received from rental property.

As with all other not-for-profit organization any and all income from activities directly associated with their principal mission will not be subject to business license fees.

I am sorry for the misunderstanding.

The revised business registration/license ordinance does not go into effect until the first of the year during the next business license cycle.  Prior to that I will ask the City Council and staff to host workshops explaining the new process prior to that date as we do not want any organization to be caught off guard and subject to misunderstandings and penalties.

As a reminder to those who did not read my initial post on business licenses, when the city moved out of City Hall and leased the former City Hall to a private business, the city was levied property tax on the building, even though it was city owned, and the tenant was subject to and paid all business license fees.