Key West businesses to pay five percent tax hike

BY PRU SOWERS

KONK LIFE STAFF WRITER

The cost of doing business in Key West is going up five percent.

Key West City Commissioners unanimously approved a five percent hike in the annual commercial tax charged to local businesses at their June 2 meeting. The move will raise just over $64,300 in new taxes in the upcoming fiscal year, which begins Oct. 1. Currently the business tax contributes approximately $1.3 million to the general fund.

 

“The local business tax represents the fees charged and the method by which a local government grants the privilege of engaging in or managing any business, profession, and occupation within its jurisdiction,” Assistant City Manager Sarah Hannah-Spurlock wrote in a memo to City Manager Jim Scholl.

Florida municipalities were first allowed to levy a separate tax – in addition to property taxes – on local businesses in 1997 and can raise it a maximum of five percent once every two years. Key West officials boosted the local levy in 1997, 2001, 2003, 2005, 2007 and 2009. Since it has been six years since the last business tax increase, Scholl and city staff recommended the five percent increase be imposed in the tax year ending Sept. 30. Payment would be due on or before that date.

City commissioners passed the resolution on second reading without any discussion. Several of the commissioners own businesses in Key West and will be affected by the increase.

The five percent tax hike is based on business tax receipts and the amount of the increase will differ depending on the specific type of local commercial venture. For example, the annual fee for a bar with entertainment will increase from $194.25 to $203. The fee on a “six pack” charter fishing boat will increase from $79.80 to $83. And the fee on a commercial laundry machine will rise from $6.56 to $6.89, while the tax on individual motel rooms will increase from $15.75 to $16 per unit.

“If we don’t do it this year, we would have to wait two years until we have another opportunity,” Scholl told commissioners in April when they discussed the proposed resolution on first reading.

[livemarket market_name="KONK Life LiveMarket" limit=3 category=“” show_signup=0 show_more=0]