Clarifying the meaning of ‘gross income’

By: By Charles Warner - [email protected]

UNION — Additions and deletions both big and small and clarifications are the order of the day in the new City of Union Business License Ordinance that moved one step closer to becoming law this past Tuesday.

During its January meeting Tuesday evening, Union City Council voted unanimously to approve first reading of the ordinance based on a recommendation by Planning and Zoning Coordinator Kathy A. Teague.

In recommending passage of the ordinance, Teague pointed out that the ordinance reflects changes that the Municipal Assocatiion of South Carolina (MASC) to its Model Business License Ordinance. Teague also pointed out that the MASC had “recently published an updated business license class schedule based on the most recent IRS data. The business license schedule propertly classifies each business according to current gross profit margin data as available by the Internal Revenue Service.”

Teague told The Union Times Wednesday that this was the first time since 2012 that the MASC has updated its Model Business License Ordinance and the first time since 2016 that it has updated its Business License Class Schedule. She said the changes range from the changing of a word such as, for example, “office” to “officer” in the definition of “Charitable Organization” to much larger changes. The largest of those changes according to Teague are the changes to the definitition of “Gross Income” which she said clarifies what gross income is.

In the 2012 Business License Ordinance, Gross Income means the total revenue of a business received or accrued, for one calendar year collected or to be collected from business done within the Municipality, excepting therefrom income earned outside of the Municipality on which a license tax is paid to some other Municipality or a county and fully reported to the Municipality. Gross income for brokers or agents means gross commissions received or retained, unless otherwise specified. Gross income for insurance companies means gross premiums collected. Gross income for business license tax purposes shall not include property taxes collected for a government entity, escrows funds, or funds which are the property of a third party. The value of bartered goods or trade-in merchandise shall be included in gross income. The gross income for business license purposes may be verified by inspection of returns and reports filed with the Internal Revenue Service, the South Carolina Department of Revenue, the South Carolina Insurance Commission, or other government agency.

In the new Business License Ordinance, Gross Income means the gross receipts or gross revenue of a business, received or accrued, for one calendar or fiscal year collected or to be collected from business done within the Municipality, excepting therefrom income earned outside of the Municipality on which a license tax is paid by the business to some other municipality or a county and fully reported to the Municipality. Gross income for agents means gross commissions received or retained, unless otherwise specified. Gross income for insurance companies means gross premiums written. Gross income for business license tax purposes shall not include taxes collected for a governmental entity, escrow funds, or funds which are the property of a third party. The value of bartered goods or trade-in merchandise shall be included in gross income. The gross receiptes or gross revenues for business license purposes may be verified by inspection of returns and reports filed with the Internal Revenue Service, the South Carolina Department of Revenue, the South Carolina Department of Insurance, or other government agencies.

Another change is the addition of the following sentence to the “Registration Reqired” section. It states that “an annexed business shall be required to have a business license within 30 days of annexation.”

Language is also added to the section dealing with “Denial of License” and concerning the third of six reasons a person may be denied a business license. With the new language, it states:

“The applicant, Licensee or prior Licensee or the person in control of the business has been convicted within the previous 10 years of an offense under law or ordinance regulating business, a crime involving dishonest conduct or moral turpitude related to a business or subject of a business, or an unlawful sale of merchandise or prohibited goods.”

Similar language is also added to the section dealing with “Suspenion or Revocation of License” and concerning the third of six reasons a person my have their business license suspended or revoked. With the new language it states:

“A Licensee has been convicted within the previous 10 years, of an offense under a law or ordinance regulating business, a crime involving dishonest conduct or moral turpitude, or an unlawful sale of merchandise or prohibited goods.“

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City amending Business License Ordinance

By Charles Warner

[email protected]

Charles Warner can be reached at 864-762-4090.

Charles Warner can be reached at 864-762-4090.

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