When Ringgold business owners pay taxes next year, they should expect a different formula to calculate how much is owed.
Following preliminary discussions about changing how taxes are collected from businesses within Ringgold city limits, the city council introduced a formal motion to simplify and update the city's occupational tax system during its May 8 meeting. The council has been working with local business owners to ensure the updated system has a minimal impact, especially on local small-business owners, said Mayor Nick Millwood.
Rather than basing taxes on a business's ever-shifting profit margins through a complex formula, the new system will simplify the tax by shifting to a flat fee based on the number of employees, Millwood explained. Smaller businesses would fall into a low tax bracket, while those with more employees would pay more.
"We're looking to get away from [the current system] because it is complicated and we don't want to create an undue burden on our local businesses," Millwood said, adding that this new system will allow business owners to know with greater certainty what to budget for taxes.
"It isn't that big of an increase [for bigger businesses]; just a little bit more equitable as you move up into large-scale businesses."
The new system is similar to Dalton's system, which Millwood said Ringgold has studied and wants to mirror. The new tax requires a flat fee of $100, then additional charges based on the number of employees, and includes manufacturing operations, which did not fall under the occupational tax bracket under the former setup.
"We wanted to introduce a tax system that was fair to our business owners, but also fair to the city of Ringgold," said Councilman Larry Black, chair of an exploratory committee which began meeting with local business owners in December. " About five months later, we are discussing this issue for a first reading [of the proposed ordinance]."
The first reading of the ordinance was approved, and a second reading is expected at the next meeting, prior to the changes going into effect.
Ringgold City Council meets the second and fourth Monday of each month at 7 p.m. at 150 Tennessee St. To watch a video of the May 8 meeting or to see the agenda for the upcoming meeting, visit cityofringgold.com.
Anyone interested in learning more about the occupational tax changes under consideration, or the committee of officials and business owners involved in proposing the new system, can call city hall at 706-935-3061.