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Rockford Council, Utilities Board discuss business license fee
By Christa Jennings
During its meeting last Tuesday evening, the Rockford Town Council and some members of the Rockford Utilities Board discussed and debated the business license fee assessed for the board.
All council members were present for the meeting, as well as Mayor Scott White, Town Clerk Jennifer Tindall and town attorney Derrick Blythe. Others present included Utilities Board Chair Ronnie Brown, Utilities Board members Raymond Abrams and Ronnie Joiner, Utilities Superintendent Wade Brown, and Assistant Superintendent Jason Thornton.
At the appropriate time on the agenda, the floor was turned over to the Utilities Board to address the council. Chair Brown took the floor and explained that the board had received a form from Mayor White last month indicating that the board owed a business license fee to the town for $12,325.21.
Brown proceeded to give attorney Blythe a letter and information packet from Utilities Board attorney Nancy Kirby, stating that the board did not have to pay the business license fee according to her findings. Brown further stated that since the Utilities Board is a non-profit it does not have to pay a business license fee.
During discussion, White read a statement from Alabama League of Municipalities’ Assistant General Counsel Rob Johnson stating, “We, as the Town of Rockford, have a statutory authority to issue you a business license because you do conduct business within our municipality. Your non-profit status is a Department of Revenue classification for tax purposes, but you are in fact conducting business. You pay your employees, and you pay your board members. The council can exempt you, but you are not automatically exempt just because of your non-profit status.”
During the meeting, Blythe reviewed the packet of information Brown provided from Kirby. As discussion went on, he stated that although he had not yet been able to read the entire packet from Kirby, which was 15 pages long, he informed the board that as it stands it did in fact owe a business license fee to the town.
Blythe said he would read the entire packet after the meeting. It included a 3-page letter, as well as four attachments – the Articles of Consolidation and Alabama Code sections 11-50-322, 40-21-82 and 40-21-102.
Ultimately, Kirby’s information argued that the board is “exempt from taxation – imposition of a ‘business license tax’ – by the Town of Rockford under Alabama Code Section 11-50-322, and there are no applicable exceptions,” which was based on the board being classified as a non-profit.
However, White explained that per Alabama Code Section 40-9-12 non-profits are only exempt from paying a business license fee if they are operating as a charity. During discussion, Blythe mentioned that in Alexander City even the Salvation Army pays for a business license.
White further said that per Alabama Code Section 11-51-129 the amount of privilege or license tax a municipality can collect or assess from a utility cannot exceed 3% of the utility’s gross receipts. Using that information, 3% of the Utilities Board’s gross receipts came to $12,235.21.
During discussion, Blythe said that Alabama Power and other utility services and non-profits have been buying business licenses, adding that a utility can be taxed like any other entity.
The board did not pay for a business license in the past because it was under the town and included in its umbrella as part of the government entity. However, since the board voted to separate from the town, it is no longer considered a government entity, which is what initially brought it up to be subject to a business license fee.
In ongoing discussion, Chair Brown appeared adamant that the board would not pay the fee, with him stating the board’s refusal to pay multiple times.
Brown also mentioned the possibility of the board building its office or headquarters outside of the town limits to avoid paying a business license fee.
“We’re not going to pay it,” Brown said. “If we have to, we will move outside the city limits, build us a building and not pay to get this business license.”
However, Blythe explained that even if the board located its headquarters outside of the town limits, it would still be subject to paying a business license fee since it would still be conducting business within the town limits. He stated that instead of 3% of the gross receipts it would then be based on 1.5%, but that the board would still have to get a business license because of having customers in the town limits.
Mayor White mentioned that they had contacted others who charge business license fees and that some of them do offer a discount for utilities for providing a service.
“I’m not saying I’m opposed to that,” White said. “But if I’m going to hold people, and this town’s going to hold people, accountable for doing business – just like y’all conduct business. Y’all charge fees; we have to charge fees.”
Brown and the council further discussed that the Utilities Board services residents outside of the town limits, such as Equality, and questioned whether it should have to pay the business license based on customers outside of the town.
However, at the time of the meeting, the information the town was provided was that the board did have to pay based on total gross receipts, not just those within the town limits.
Town Clerk Tindall explained that per the Alabama Code it is 3% of overall gross receipts for the entire company.
She further explained that Alabama Power had been paying a business license fee for numerous years and that what it paid aligns with the same format the Utilities Board was billed.
Tindall said that if it would help put the board’s mind at ease she would contact Alabama Power’s financial department for documentation on why and how the figures are calculated to have more information to provide everyone.
In ongoing discussion of the fee amount, how it is determined and the town having the option to offer a discounted rate for the board, Blythe said, “This body can do whatever it wants to, but as it stands right now – unless there’s something in here that tells me otherwise – the only thing I can see is that you’re subject to the 3%, at this time.”
Brown stated again that the information from attorney Kirby “says that we don’t have to pay it.”
After discussion, the matter was tabled so that Tindall could gather further information and Blythe could review the packet from Kirby and also gather additional information.
Since last Tuesday’s meeting, Tindall and Blythe have looked into the matter further to help shed some light on the issue.
At the time of the council meeting, information provided to the town was that the board’s fee was based on 3% of gross overall receipts for all customers, not just those within Rockford limits. This information was per legal counsel with the Alabama League of Municipalities and also Avenue, the company the town contracts its business licenses out to, with both specifically stating it was based on overall receipts.
However, Blythe has since spoken with a representative at Alabama Power who reportedly confirmed that it is only 3% of Rockford municipality customers and 1.5% of those within the police jurisdiction of Rockford.
Based on this new information, Utilities Superintendent Wade Brown and Utilities Clerk Kelly Berry are getting those figures together so that the correct 3% and 1.5% can be assessed for the board’s business license fee.
The matter will come up again at next month’s meeting after being tabled last week.
Also during the meeting, Rockford resident Donnie Pemberton, who resides on County Road 129, addressed the council with concerns regarding logging trucks messing up the road and tearing up the pavement on the town’s portion of the paved road.
He further mentioned that the heavy trucks have broken water lines by pulling off on the side of the road and that they have torn up pavement and property next to the storage buildings on U.S. Highway 231.
During ongoing discussion, Pemberton asked if there was anything the town could do to help with this matter, such as adopting an ordinance. Attorney Blythe said the town could possibly draft an ordinance with weight restrictions for the road or require a permit to travel that road.
After further discussion, the council approved tabling the matter until its next meeting so that the issue can be looked into further.
In other business, Mayor White informed the council that he would like to look into having a new website done for the town, to include job roles, various duties and updated contact information. He mentioned the Coosa County Chamber of Commerce website and said that he would like for the town to have a site laid out similarly to that.
To that end, he asked the council to think of which roles they might like to be involved in or in charge of, such as roads and bridges and others. This would allow each council member to have a specific topic so that residents would know who to contact for specific matters.
White asked that the council take it into consideration and be prepared to discuss it further at next month’s meeting. He also hopes to have more information to present to the council regarding the website at that time.
White also mentioned the town’s beautification day in which volunteers planted flowers, a tree, vegetables, and other plants around the old school and town park. He described it as a “very successful event.”
The next regularly scheduled monthly meeting of the Rockford Town Council will be held at 6 p.m. August 17.