Occupational Tax Amendments


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  • I would like to begin by explaining the two Classification System (the SIC and the NAICS), explain their differences , show examples of selected businesses and the affect on their taxes.
  • Occupational Tax Amendments

    1. 2. The Standard Industrial Classification (SIC) Code is a system for classifying establishments by type of economic activity. The SIC was first adopted by Council in 1992 when the current rate structure was established. It has not been increased or changed since.
    2. 3. The North American Industry Classification System is a new economic classification system that replaces the 1987 SIC system for statistical purposes. In 1997 many state and local governments began updating to the NAICS code.
    3. 4. <ul><li>The differences are: </li></ul><ul><li>NAICS has broader classifications resulting in fewer class codes – a reduction of one-half the SIC codes </li></ul><ul><li>Tax Class Rates – From flat/structured rates to percentage rates </li></ul>
    4. 5. The Tax Classification was created by the US Government, Office of Management and Budget, for statistical purposes and to group businesses by their profit margins. Both the NAICS and SIC use this.
    5. 6. GROUP PM Tax Class I 3.65% or less Tax Class II 3.66% - 5.85% Tax Class III 5.86% - 6.84% Tax Class IV 6.85% - 9.57% Tax Class V 9.58% - 16.41% Tax Class VI 16.42% and Above * These Tax Classes will not change
    6. 7. <ul><ul><ul><li>Gross Revenue </li></ul></ul></ul><ul><ul><ul><li>Profit Margin </li></ul></ul></ul><ul><ul><ul><li>Tax Class Rate </li></ul></ul></ul><ul><ul><ul><li>* This Methodology will not change </li></ul></ul></ul>
    7. 16. Georgia has mandated that “Professionals” (as classified by state law) can either be classified under a coding structure, or they are eligible to use the flat rate of $400 per Professional.
    8. 17. State Legislation mandates regulatory fees be charged for Pawn Shops, Billiard Rooms, Masseurs, Taxis, Ice Cream Trucks and Hand Pushed Carts. Rates for these types of businesses will not be increased.
    9. 18. <ul><li>For existing businesses, the NAICS Tax </li></ul><ul><li>Classifications would be effective </li></ul><ul><li>beginning January 1, 2009. </li></ul><ul><li>For new businesses as of July 1, 2008, </li></ul><ul><li>the new rate structure would apply. </li></ul>
    10. 19. <ul><li>Approve the ordinance to amend Chapter 7 of the Duluth Code as presented, which will adopt the NAICS tax classification code, incorporate a cap of $10,500 and change the administration fee to $50. </li></ul>
    11. 20. <ul><li>Approve the ordinance as presented. </li></ul><ul><li>Approve the ordinance with changes. </li></ul><ul><li>Postpone </li></ul><ul><li>Deny </li></ul>
    12. 21. To assist in the transition, staff is prepared to provide specific information for business owners by contacting us at [email_address] or 770.476.3434 ext. 1224.