Members of Wheeling City Council now will vote in early February on a one-time B&O Tax credit program for small businesses that was approved by the city’s Finance Committee early this evening.
The proposal would allow small businesses with fewer than 25 employees to forgo payment for the first quarter of 2021 if the business owners are current with their BO&O taxes. If a majority of the city’s seven representatives vote in favor during the regular Council meeting scheduled for Feb. 2, the program would cost the city between $116,000-$135,000.
“If approved, these businesses would receive the tax credit for the first quarter of 2021,” said Ward 6 Councilman Dave Palmer, who serves as the chair of the Finance Committee. “Even though it’s not a huge amount, it could still help a business owner to pay another bill they may have so they can keep their head above water.
“This has been a team effort since we started to talk about it after the Thanksgiving break,” he said. “We were thinking of what we could do to help our small businesses, and the city manager (Bob Herron) was the first person we asked if we could do something like this and what would be the financial impact. Of course, the city’s finance director was involved, and then we worked with the state auditor’s office to make sure it was OK under the code.”
Due Diligence
Palmer and the other two members of the Finance Committee, Council representatives Ty Thorngate (Ward 5) and Chad Thalman (Ward 1), then communicated with City Manager Bob Herron and state officials to properly develop the tax credit program.
Since the city implemented the $2-per-week User Free in January 2020, establishing what businesses employed 25 or fewer workers and would qualify for the first-quarter tax credit was completed quickly, and the number of business owners not current with their B&O taxes was calculated, as well.
“It should be around 200 accounts that would be impacted by the tax credit,” Palmer explained. “After that, we took a look to see what they paid last year for the first quarter, and we also looked at the options that we had as far as implementation.
“Once we reached the total number of businesses and the financial impact it would have on the city, we reached the point to where we could introduce it to the members of the Finance Committee,” he said. “I hope people understand that this is a one-time deal in an effort to help the small businesses that have been hit hard during this pandemic.”
Catch Up Time
The first fiscal quarter began on January 1 and extends through April, and with the continuation of occupancy restrictions and mask mandates, small retail shops and restaurants have struggled to survive.
Now that residents in Wheeling are being vaccinated based on age and supply, city leaders hope for a return to some normalcy in the spring. That, however, does not include the first fiscal quarter.
“The amount that the small businesses will save all depends on their sales during the first quarter, and we do expect those numbers to be lower than what they were last year because the pandemic didn’t begin until late-March,” Palmer said. “That’s why we know that for some of them it might be a few hundred dollars or maybe a couple of thousands.
“Now, if a business owner is not current with the amount of B&O taxes owed the city, and if they are lagging behind, they will have the first quarter to make it up so they can qualify for this tax credit,” he explained. “That means they still have a little more than three months to get caught up and go from there.”
