Altoona may adjust business privilege tax ordinance
The city plans to amend an ordinance that authorizes it to collect business privilege tax, so that it’s clear the tax only requires payment related to revenues connected with a company’s Altoona operations.
In practice, that is how the ordinance already works, but the language is ambiguous enough that it seems to have deterred firms from locating here, for fear the tax could apply to all operations of a company, including those that have nothing to do with Altoona.
Solicitor Tom Finn intends to make it explicit in the ordinance that only revenues with a “nexus” to Altoona would be subject to the tax, he said at a recent meeting.
“I think the issue is the wording,” said Mayor Matt Pacifico. “Can we amend the ordinance to plainly state (the real intention)?”
The tax is 1 mill on gross receipts — which means businesses pay $1 for every $1,000 in total revenue.
An additional 2 mills goes to the Altoona Area School District.
A clause in the city ordinance’s definition of “gross receipts” may be responsible for the mistaken impression that operations unconnected with Altoona would be subject to the tax: “GROSS RECEIPTS … shall also include receipts from services rendered within the city of Altoona regardless of whether or not the business is conducted from a place or office or establishment within the city.”
The current language in the ordinance has acted as a “discouragement” to some potential businesses, as he understands it, said Councilman Jesse Ickes. It can be “a minus mark,” not only to the businesses themselves, but to consultants hired to investigate potential new sites for them, Ickes added.
The fears are clearly unfounded, or Sheetz would be paying Altoona business privilege taxes on all 600 stores, which is not the case, Pacifico said.
“(Still), the language in there needs clarified,” said City Manager Omar Strohm.
Before taking up an ordinance amendment there should be “a detailed discussion” with tax collector H.A. Berkheimer, Finn said.