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Follansbee to accept comment on tax

FOLLANSBEE — Follansbee Council will accept comment on a planned 1 percent sales tax at a public hearing to be held at 6:45 pm. Monday prior to its next regular meeting.

Slated to go into effect July 1, the tax will apply to various goods sold in the city at brick and mortar establishments and through the Internet.

Exempt are many materials used in manufacturing, supply of prescription drugs and the services provided by doctors, dentists, lawyers, accountants, barbers, beauticians and contractors involved with improvements to real property.

The tax is permitted through the city’s participation in the state’s Home Rule program, which allows municipalities to veer from state code set for them, pending approval by the state Home Rule board.

City officials have cited declining revenue from its business and occupation tax as the reason for the tax.

City Manager John DeStefano said the tax is expected to generate about $238,000 per year, of which $150,000 will be used for street paving, $50,000 for the city’s fire station and $38,000 for general use.

In order to implement the tax, the city must reduce its B&O tax, which currently generates $1.5 million for the city.

To comply, city officials have proposed a yearly tax credit of $1,000 for about 14 restaurants and other businesses that sell prepared foods and to reduce the B&O rate for auto dealers from 0.204 percent per $1,000 to 0.11 percent of $1,000 for gross proceeds of sales.

(Scott can be contacted at wscott@heraldstaronline.com.)

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