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Ludlow Grocery Store Owner Complains About Business Tax Hike

Vick Dawn, owner of the Riverside Marketplace in Ludlow, complained to the Ludlow City Council at its regular caucus meeting on Thursday that he felt it was unfair that he should have to pay upwards of $4,000 in gross receipts tax.
The City adopted a tax of .075 percent on all gross receipts from its businesses which, according to city staff, remains at or lower than other comparable cities in Northern Kentucky. Dawn argued that the reason he put his grocery store in Ludlow was due to the previous situation of not having a gross receipts tax but rather a flat $100 annual tax. 

Dawn and the previous city council had a similar disagreement in December 2013.

Dawn would like to see a cap on the tax at $2,000 a year for those Ludlow businesses that generate enough revenue to push the gross receipts tax over that number. City Councilman Tom Amann said that while the gross receipts tax currently in place cannot be changed for this tax year, he and the council would examine the numbers to see if capping the tax would still keep the city afloat.

“If it's minimal tax that we generated from the other good businesses and the City of Ludlow that we would not otherwise have with a cap, then I can tell you that we could suggest consideration at a city council meeting of a cap” Amann said.

Dawn doesn't think the ordinance was drafted fairly because he says he thinks that while his grocery store sells a lot of goods, it doesn't make the same kind of profit margin that other local businesses enjoy. Therefore, he would like to see a tax on net profit rather than gross receipts.

“It should be on net profits, it should not be on net sales,” he said.

He also suggested that the city overpaid for its new Public Works building and is raising various taxes to help pay for it.

“You raise my taxes but boy that's a nice building we have for our public works, a really nice one, and if I look at what my tax bill does, and I look at how I am amortized $8,000 in a year, it pays for a big part of that building and I don't know that we needed that building to be anywhere near as nice as it is,” he said. “Somewhere along the line, the people, and the businesses and myself trust that when you raise my taxes, that you're going to do so on an as-needed basis, not on an as-wanted basis.”

Tom Amann emphasized the necessity of the tax in order for the city to continue operating its services by pointing out how for many years, the businesses of Ludlow avoided paying their fair share of taxes when the City had only a flat $100 business tax.

“You could make a billion dollars and still only pay that $100 tax and that was not sustainable,” Amann said. “It's not something that we didn't take a lot of time to consider. We don't like raising taxes, we don't like putting taxes on the gas and electric bill, we don't like that, but if we didn't do that, the City of Ludlow would be out of business and we would not be doing what we should be doing as a Council for the citizens of Ludlow."

“I'm not trying to get out of paying my fair share,” Dawn said. “But I would challenge you to look at it and see if anyone else is as impacted by the raise in taxes in the last six months as I am and I assure you that they probably are not.”

Other notes:

Since receiving the bid package with the other four cities that Ludlow combined with in a joint-bid for waste-hauling services, the City is now discussing how to implement the upcoming new service. City Administrator Elishia Chamberlain has recommended using Rumpke who was the lowest bidder. Rumpke would provide each resident with a wheeled recycling and garbage receptacle. The decision now comes down to if the trash will be picked up twice a week or only once a week. Recycling will be picked up once a week in both scenarios.

If it is once a week, the City will pay $0.26 less than what each resident pays now; if it is twice, the cost will be a little over $41 per year for each resident. Mayor Wynn asked each member of city council to review the information and vote on a once-a-week or twice-a-week service so that staff can begin drafting language for the new deal in July.

City Attorney Jeff Otis informed the council of the amended text to the City Ordinance concerning the collection of fees for rental licenses in the City of Ludlow. The new language eases the ability for the City to collect fees from property owners who rent to tenants which requires a license. In a meeting on March 12, Ludlow Code Enforcement Officer Tom Garner told Council that there were 60 illegal landlords in the City that had not paid their license fees.

The City also returned the sign regulations back to 25 square feet down from the 60 square feet that Council voted on to allow Ludlow Pharmacy to put up its sign that was larger than the old ordinance.

The Ludlow Historical Society will have their annual Tidy Up Ludlow Day on Saturday at 4 p.m. Ruth Bamberger said at the meeting that the group intends to focus on the alleys, city parks and wherever else people see trash. More information can be found on the group's Facebook page.

Written by Bryan Burke, associate editor