FAYETTEVILLE — Fayetteville Town Council heard a proposal last Thursday night for a Business & Occupation (B&O) tax credit for new businesses or expansion of existing businesses. No action was taken on the matter pending further study.
At the council’s regular January meeting, led by Recorder Zenda Carte Vance in the absence of Mayor Sharon Cruikshank, Bill Wells, co-owner of Cascade Properties, made a presentation on his proposal for a B&O tax break for new or existing businesses.
“This proposal would not in any way reduce the amount of taxes coming into the town,” Wells stressed as he spoke on the proposal.
“I think it’s wise for the town to encourage expansion of businesses by this tax credit plan. It could help businesses be successful; it is an incentive and it helps businesses out,” he said.
In a handout on the proposal, Wells pointed out that the B&O tax “acts as a barrier to the renovation and expansion of existing structures for business and the construction of new businesses.”
His handout also addressed the number of empty store fronts and historic buildings “that are in need of renovation to support new businesses in town,” adding “The decline of the coal industry will bring about a decline in business activity in town. Although Fayetteville will be hurt less than other Southern West Virginia communities due to the tourism associated with the New River Gorge, B&O taxes will decline due to the loss of coal jobs and support jobs in the region.
“The construction of new businesses and the expansion of existing businesses in town would generate more business activity and more B&O taxes to offset this decline. It is in the town’s best interest to encourage new business activity in town by offering a tax credit for B&O taxes paid on construction activity that will result in increased taxes collected in the future.”
Wells broke his proposal down for council members and listed the benefits in the handout.
Under the proposal business owners who plan to start a construction project would submit to the town an application describing the project, its estimated cost and the estimated B&O tax that would be paid once the construction was completed. Under the proposal, projects must have a $20,000 minimum cost to be eligible for the tax break. Upon approval of the tax break, the business owner would be required to document the B&O taxes paid by the business either directly or indirectly through contractors, subcontractors and material suppliers.
Once the project was completed, the business owner must submit documentation of the total B&O tax paid to the town on the project. Upon approval of the submission, the town would grant the B&O tax credit against 50 percent of future B&O taxes due the municipality.
Questioned by a member of council about the use of the tax break by other municipalities, Wells said, “It’s my understanding that Oak Hill has it.”
“Some municipalities already use it,” town attorney Carl Harris confirmed, adding “Hopefully, businesses would thrive and more B&O taxes would be collected in the future.”
The benefits referred to in Wells’ proposal do include more B&O taxes collected from increased construction and business activity expected to be spurred by the tax break. “There is an immediate benefit from new business activity since the credit only applies to 50 percent of the B&O tax due,” Wells wrote. “Once the credit is used, the town receives 100 percent of the increased taxes.”
Council members expressed interest in the proposal, but voted to table any action or further discussion until the February council meeting on Feb. 6 in order to allow time to study the proposal’s use and success or lack of such in other municipalities.
Councilman Stanley Boyd made the motion to table action on the proposal. After a second by Councilman Okey Skidmore, council voted unanimously to address the tax credit matter at the February meeting.
Email firstname.lastname@example.org; follow on Twitter @Fayette_Cheryl