Isle of Wight revenue commissioner proposes change to business license fees

Businesses that bring in less than $25,000 would no longer be required to obtain a business license under a proposed change to Isle of Wight County’s ordinances.

Commissioner of the Revenue Gerald Gwaltney briefed county supervisors on his proposal, dubbed “Isle Support Small Businesses,” on Oct. 3. The supervisors say they’re on board with the change.

Currently, businesses with annual gross receipts of less than $4,000 aren’t required to obtain a business license from the county. Those that gross between $4,000 and $50,000 pay a flat $50 license fee at the start of each calendar year. Those that gross over $50,000 pay a fee per $100 in gross receipts based on the type of business.

Contractors pay 16 cents per $100 while retailers pay 20 cents. Financial and real estate firms and service businesses such as lawyers and doctors pay 58 cents and repair-based and other businesses pay 36 cents.

The proposed change would raise the threshold at which a license is required from $4,000 to $25,000.

According to Gwaltney, the change would benefit an estimated 381 small-business owners who paid license fees last year such as dog-walkers, church organists who receive an Internal Revenue Service Form 1099 for their services, deputies who work as private security during their off-hours and drivers for ride-share and delivery services such as Uber and DoorDash. The change would decrease business license fee revenue for 2025 by at most $19,050, Gwaltney estimated.

It would mark the first change in the county’s business license fee brackets since 1996.

“This puts you in a position and an opportunity to do something proactively to say we value the small businesses and we want to do something to help,” Gwaltney said.

Currently, 736 businesses with receipts under $4,000 have voluntarily applied for a business license even though they’re not required to have one. The under-$4,000 bracket brought in $36,850 last year, Gwaltney said.

Reasons business owners voluntarily apply for a business license can include a bank loan that requires they obtain a license, or they want to show prospective customers that they are licensed, Gwaltney said.

Another 381 businesses currently fall into the $4,000-to-$24,999 bracket, which generated the $19,050 this year that would be eliminated from the county’s 2025 revenue, Gwaltney said.

Another 246 earning $25,000 to $50,000 brought in $12,300.

Ninety-four percent of the county’s $1.16 million in business license fees received this year from all brackets came from the $50,001-and-up bracket, which generated $1.09 million. The per $100 rates for each business type are capped by state law and Isle of Wight is already at the maximum, Gwaltney said.

If adopted the new brackets would become effective Jan. 1.

To adopt Gwaltney’s proposal , county supervisors would have to advertise it as an ordinance change, which requires a public hearing. Under state law, which requires a full 14 days elapse between the first advertisement in a newspaper and the date of the hearing, the earliest that hearing could be held is during the supervisors’ Nov. 21 meeting.

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