Dewey raises business license fees
Dewey Beach Town Council narrowly approved a 9 percent, across-the-board increase in business license fees for hotels, restaurants, retail shops and renters. According to Budget and Finance Committee Chairman David King, the increase will raise $25,000. The vote met with resistance at a Dec. 10 town council meeting.
Commissioners Joy Howell and Anna Legates voted against the increase. “I see this as a Band-Aid approach,” Legates said. “We’re not fixing what’s broken in our town.”
Commissioner Marty Seitz, who voted for the fee, said the increase is not a Band-Aid; it is a fee that has been overlooked for the past several years.
Attorney Stephen Spence, who represents businesses owned by Highway One Partnership, including Northbeach, Rusty Rudder, Bottle and Cork and Dewey Beach Liquors, said the fee discriminates against businesses that sell alcohol. “It’s really a tax, not a license fee,” he said.
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New business license rates Property rentals: $142, plus an additional $11 for each bedroom over two Motels and hotels: $382, plus $22 per room Real estate brokers: $382 Real estate agents: $109 Businesses that hold a liquor license: $1,090, plus $6 per person based on occupancy Eateries: $273, plus $6 per person based on occupancy Package stores: $2,180 Bay Center: $2,180 Small retail stores: $273 Large retail stores: $382 Service businesses: $109 One-time business license: 28 Vending machines: $27 Large out-of-town businesses: $382
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Spence said the town should implement a real estate tax to create a steady source of revenue. “I can think of no other town in the United States that doesn’t have a real estate tax,” he said. “If you had a real estate tax, my client would be the single largest taxpayer in Dewey Beach. We’re not afraid to pay our taxes.”
Commissioner Jim Laird, who voted for the increase, said Spence should consider the effect of Highway One’s bar patrons on the town. Dewey Beach has an operating budget of about $2.4 million; more than $1 million is spent on police.
“I understand 9 percent is significant. But in this case it’s digestible I think,” said Laird, who recently built a new house in Dewey Beach. “I probably paid twice what you paid last year to the town, and I didn’t have the police to my house once,” he said.
Mayor Diane Hanson also voted for the fee increase. “What you’re promoting is the concept of equity, and I agree with that,” Hanson said.
“You say you don’t want to divulge how much money your business makes,” she said. “But yet as a person who pays accommodations tax on my rentals, I have to divulge every penny that I make on paper in town hall.”
Hanson suggested a 3 percent across-the-board gross receipts tax on every business in town, including rentals. “Is that not any more fair or less fair than a property tax?” she said.
“You would unfortunately find yourself in court,” Spence said. He said a gross receipts tax also would not provide a stable source of income.
Legates said the town has tried in the past to establish a property tax by referendum, but residents consistently vote against the idea.
“You may have a referendum problem to start with, I get that,” Spence said. But the town cannot continue to operate on an uncertain revenue base, he said.
After the meeting, Rehoboth Beach-Dewey Beach Chamber of Commerce President Carol Everhart said the amount of the fee increase is irrelevant. “They keep going to the same well,” she said. “It’s fines and business fees.” Everhart said the town needs a dependable source of revenue.
