Legislature(2007 - 2008)HOUSE FINANCE 519
02/22/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| HB111 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 75 | TELECONFERENCED | |
| + | HB 111 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 111
An Act decreasing the fee for a business license; and
providing for an effective date.
RICK URION, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING,
DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT,
spoke in support of the legislation. HB 111 reduces the
increased license fee of $100 to $25, in an attempt to
attract and retain business. The business license was
created in 1939 as a source of revenue and is currently used
as a means to determine local sales tax. The legislation
would return business license issuance too biannually.
Mr. Urion explained that the fiscal note reflects that it
would take two years to return to the biannual license. He
explained the transitional period and costs associated with
the return to a $25 biannual license. The penalty in
present law is a maximum fine of $2,000 dollars and 6 months
in jail, which has never been implemented. The legislation
reduces that to a $100 fine. He spoke in support of
increasing the fine to $300.
2:50:54 PM
Representative Foster questioned if consideration had been
made to a graduated cost for business licenses reflecting
differences in revenue. Mr. Urion advised that it would be
difficult to manage a graduated program, requiring
examination of tax returns and limit Internet transactions.
2:53:19 PM
Representative Gara reiterated his concerns regarding
discrepancy in business revenues and questioned if such a
program could be implemented. Mr. Urion noted that the
Division serves at the direction of the Legislature;
however, emphasized the need for a simplified operation.
Representative Gara referenced individuals that occasionally
sell handcrafted goods such as beading, and how the
licensing determination is made by the Division. Mr. Urion
clarified that any business making a profit is required to
have a business license.
2:56:12 PM
Representative Gara pointed out that AS 43.70.105 indicates
that licenses are not required unless the person is
"regularly engaged in furnishing goods or services". Mr.
Urion explained that was part of the reason that Governor
Palin decided to decrease the license price.
2:58:26 PM
Vice Chair Stoltze understood that the Governor's intent was
simplicity for the operation of business.
3:00:13 PM
In response to Representative Kelly, Mr. Urion explained
that it would be returned to a two year $50 dollar license.
3:01:03 PM
Co Chair Chenault asked if the $25 fee could cover the costs
for running the Division. Mr. Urion said that it was
sufficient.
Co-Chair Chenault asked if the change to $300 would need to
be accomplished through an amendment. Mr. Urion thought
that would provide more leeway for the investigators and
would rarely be used.
Co-Chair Chenault mentioned individuals with multiple
businesses, suggesting they have a one-fee combination
license.
3:03:03 PM
Representative Joule referenced the federal perception that
Alaska needs to have more "skin in the game" regarding
revenue participation, while seeking federal dollars. He
cautioned reduction of revenue when federal contributions
are also being lowered.
3:05:21 PM
Co-Chair Meyer said the bill would be HELD in Committee as
the legislation reduces State revenue at a time the
Administration is attempting to reduce the budget. He
submitted that it be discussed as a part of the entire
revenue package.
3:05:55 PM
Representative Thomas agreed with comments of Representative
Joule regarding reduction of State expenditures in areas
such as fish and game, at the same time revenues are
reduced.
3:07:05 PM
Representative Gara suggested that consideration be made
only to reducing fees for small business. He asked about a
graduated fee structure. Mr. Urion explained that the
Division does not have information on what a business might
gross or the actual size.
Representative Kelly asked about the purpose of a business
license. Mr. Urion explained that it was established as a
revenue producer and provides some statistical information
to the local governments.
3:09:13 PM
Representative Foster indicated that he supports less
government and prefers to do away with that tax rather than
having it placed on small business people just trying to get
by.
3:10:39 PM
DENNY DEWITT, ALASKA STATE DIRECTOR, NATIONAL FEDERATION OF
INDEPENDENT BUSINESS, testified in support of the
legislation. He maintained that the fee should support the
administrative activity and not be a revenue source. He
spoke in support of a simple process. He acknowledged the
impact of multiple fees for individuals that have multiple
businesses. He noted that the State is investing the cost
of the activity, but should not subsidize other activities.
The reduction could help businesses with increasing the cost
of operations.
In response to a question by Vice Chair Stoltze, Mr. DeWitt
addressed other taxes paid by municipalities such as sales
tax, business property tax and other fees.
3:14:44 PM
Vice Chair Stoltze pointed out that others (such as the
Mayor of Anchorage) use the information for statistical
values.
3:15:33 PM
Representative Gara reiterated his concern that individuals
selling cupcakes should not need a business license.
PUBLIC TESTIMONY WAS CLOSED.
HB 111 was HELD in Committee for further consideration.
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