LAURINBURG — Though their city-issued licenses may have expired on June 30, Laurinburg business owners will not need to renew them for the 2016 year.
Spurred by what some saw as the abuse of the ability to charge business owners for the right to operate, the N.C. General Assembly eliminated municipalities’ authority to levy privilege license taxes effective July 1 of this year.
Until then, Laurinburg charged $25 annually for an ordinary business license, which brought in about $20,000 of revenue each year.
“We had such small fees that it really won’t have any major effect on us,” said City Manger Charles Nichols. “There were municipalities where that was a major hit in their budget.”
Larger cities, which in some cases might charge a single business well into the thousands for an annual privilege license, will more keenly feel the effects of the state restriction. Charlotte collected nearly $17 million in privilege license fees annually. Raleigh collected $7.6 million.
Municipal fee scales for privilege license were also implemented differently throughout the state.
“Some decided, if you were a big box store you created more traffic and more impact on the environment, so they would charge a higher rate to a big box store than they would to a smaller store,” said state Rep. Larry Hall (D-Durham), the House’s Democratic leader.
Hall, who along with Scotland County state Rep. Garland Pierce voted against the bill last year, said that the measure reduces funding options available to local governments.
“It’s a shame that that was taken away, it hurt a lot of local governments and their revenue and we’re not sure how that can be made up in a fair manner,” he said.
Though the city will hold off on issuing any kind of business license for the current year, the statute provides that “the city may, consistent with the general law of the State, require applicants for licenses to be examined and charge a reasonable fee therefore.”
Next year, Laurinburg may reintroduce some form of licensure in order to maintain a record of businesses located within the city limits.
“We were looking at it from the standpoint of public safety, just being aware of where different businesses are located, where fire and police need to respond,” Nichols said. “There’s still some discussion at the state level as to whether municipalities can do this, so we pulled back and we’re going to let everybody else figure it out.”
Mary Katherine Murphy can be reached at 910-506-3169.