Under an agreement recently finalized by city officials, a firm called Public Resource Management Alliance Corp., or PREMA, in January will begin its pursuit of individuals and groups who have failed to pay occupational taxes, the charge required to hold a business tax certificate.
Commissioner Jerry Brigham, who leaves office at year’s end, said he pushed to hire the collections company to be fair to the majority of businesses that pay their occupational taxes.
“Why should they be exempt from having to pay?” he asked. “I’m certainly not exempt. Why do they get a freebie and other people are paying taxes?”
No one knows exactly how much uncollected occupational tax revenue is out there. The city collected $2.5 million this year. Brigham said the firm’s ability to collect in other cities and its willingness to work mainly on a contingency basis indicate the uncollected revenue exists in Augusta.
According to its proposal, PREMA identified 412 unlicensed businesses in Homewood, Ala., $2.5 million in uncollected business tax revenue in Gwinnett County, Ga., and $3.5 million in occupational taxes in Sandy Springs, Ga.
Under the agreement with Augusta, the firm would keep half of what it collects, including interest and penalties. The city also will pay $62,400 annually for data entry.
The company identifies the revenue by comparing Augusta’s business license database with other available databases and by using a “boots on the ground” approach, according to its proposal.
Rob Sherman, the director of licensing for the city’s Planning and Development department, said he doesn’t expect individuals who perform occasional housework, for instance, to be a high priority, while a yard service that advertises would be fair game.
Also potentially targeted will be individuals or groups working under larger institutions such as colleges and hospitals that should have individual business licenses but do not, according to an earlier report from Planning and Development Director George Patty. Researchers, individuals providing support services as independent contractors and even doctors working independently within hospitals might receive a bill, it said.
“If there’s a 1099 employee, there’s a good chance they will be required to have a business license,” Sherman said, of individuals who file a 1099 income tax form for miscellaneous income.
The tax is based on a business’ gross revenue. A business in the lowest bracket – revenues up to $30,000 – pays $89 for a license. Companies in the highest bracket – with gross revenues of $30 million – pay $12,509.