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Time is running out for Fresno tax amnesty: Program that forgives fines on unlicensed firms ends June 30.
[April 18, 2010]

Time is running out for Fresno tax amnesty: Program that forgives fines on unlicensed firms ends June 30.


Apr 18, 2010 (The Fresno Bee - McClatchy-Tribune Information Services via COMTEX) -- Dozens of businesses a day are coming forward as part of an amnesty program encouraging them to pay their share of taxes and level the playing field for law-abiding companies in Fresno.



The program, which runs until June 30, offers a break on penalties that unlicensed businesses normally would face. When the amnesty program ends, the city will begin seeking out unlicensed businesses to fine them.

Despite the 20 to 30 phone calls a day from unlicensed businesses, it's too soon to tell just how many businesses will sign up and how much money it will pump into the city, said city revenue manager Brian Reams.


Fresno has about 26,000 licensed businesses paying about $14 million in taxes a year.

It's unknown how many companies are unlicensed. Almost every business is required to have a license, with the exception of nonprofit organizations. Businesses that are based outside Fresno but do business in the city are also required to have a license.

The city spent about $2,000 on inserts in utility bills publicizing the amnesty program.

The licenses are used as a way to collect taxes from business.

Companies pay quarterly taxes based on their gross sales for services like police and fire. The amount is based on a sliding scale. Businesses making less than $1,250 in a three-month period don't pay taxes, but a business making $100,000 in that time period would pay $116, Reams said.

Businesses based outside Fresno are taxed on sales made within the city.

There is also a $10 application fee.

Under the amnesty program, businesses must pay the application fee, back taxes and interest on the amount owed going back three years. But penalties for not paying, which vary by business, will be waived.

"You could be saving up to hundreds of dollars," Reams said, adding that the business making $100,000 in a quarter would save $278 under the program.

The amnesty program should bring an infusion of cash into the city, which is struggling with a nearly $27 million general fund budget gap over the next 15 months and has already had layoffs and furloughs.

But it's also a matter of fairness, Reams said.

"We have legitimate businesses that have been paying this for years. We also have a lot of businesses that haven't been," he said. "It's an equity issue." Magda Guzman, owner of MG Automobile Car Detail in Fresno, said it's only fair that other businesses pay taxes, too. She recently got a business license through traditional channels.

"They should pay their taxes, because what's the point of us paying taxes if somebody else isn't?" she asked.

Once the amnesty period is over, the city will use $300,000 software it bought last year to track down unlicensed businesses. The software allows Fresno officials access to information at other agencies, including business names and phone numbers.

The city can track unlicensed Fresno-based businesses that are paying sales tax to the state Board of Equalization, for instance, because it has access to the agency's records.

The software has other capabilities, including tracking dog licenses.

There's also a side benefit of the businesses registering for licenses.

The downtown and community revitalization department plans to create a printed directory of local businesses for consumer use and a Web site geared toward companies wanting to do business locally.

Only businesses that are up to date on their licenses will be included, said local business initiatives manager Amy Huerta.

"If we're looking to promote and support locally owned businesses in Fresno, we need to make sure that they're paying their business tax," she said.

The reporter can be reached at [email protected] or (559) 441-6431.

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