Occupational Tax Amendments

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.

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.

The differences are: • NAICS has broader classifications resulting in fewer class codes – a reduction of one-half the SIC codes•Tax Class Rates – From flat/structured rates to percentage rates

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.

GROUP PM

Tax Class I 3.65% or lessTax 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

• Gross Revenue• Profit Margin• Tax Class Rate* This Methodology will not change

EXAMPLES: SIC NAICSProfit Margin 2008 2009

Type of Business Gross Revenue Tax Class Tax Tax Proposal

Grocery Store 100,000.00$ 1 $64.28 $50.00

Admin Fee 35.00$ 50.00$

Total Occupational and Admin Fee 99.28$ 100.00$



Fast Food/ Restaurants 100,000.00$ 2 67.32$ 60.00$

Admin Fee 35.00$ 50.00$




Retail - Beauty 500,000.00$ 2 205.88$ 300.00$

Admin Fee 35.00$ 50.00$




Driver's Education School 800,000.00$ 3 355.38$ 560.00$

Admin Fee 35.00$ 50.00$




Advertising Specialities 400,000.00$ 4 213.48$ 320.00$

Admin Fee 35.00$ 50.00$




Insurance Agency 100,000.00$ 5 76.44$ 90.00$

Admin Fee 35.00$ 50.00$




Real Estate Holding Co 100,000.00$ 6 79.47$ 100.00$

Admin Fee 35.00$ 50.00$




Wholesale Trade 62,992,206.00$ 1 621.26$ 31,496.10$

Admin Fee 35.00$ 50.00$

Total Occupational and Admin Fee 656.26$ 31,546.10$ *If approved, this business would be one of two that would qualify if a Cap is put in place.

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.

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.

• For existing businesses, the NAICS Tax Classifications would be effective beginning January 1, 2009.

• For new businesses as of July 1, 2008, the new rate structure would apply.

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.

• Approve the ordinance as presented.• Approve the ordinance with changes.• Postpone• Deny

To assist in the transition, staff is prepared to provide specific

information for business owners by contacting us at

[email protected] or 770.476.3434 ext. 1224.

mailto:[email protected]

Occupational Tax Amendments

Economy & Finance

Transcript of Occupational Tax Amendments