Zoey M. Backley

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Levy to be assessed on all businesses that gross more than $500,000 each year.


EXETER &ndash; Borough council Tuesday night adopted a $500 business privilege and mercantile tax to be assessed on all businesses within the borough that gross more than $500,000 each year.
The vote was unanimous. The borough will also advertise for collection agencies to determine what businesses are at or over the $500,000 threshold.
That agency can then go about collecting the tax for the borough.
Any taxes collected during 2012 will be held in escrow until a state court can determine the legality of the tax. Borough officials expressed confidence the measure will be upheld, but they are remaining cautious.
Resident and business owner Lindo Sabatini, of Sabatini&rsquo;s Pizza, was skeptical as to how effectively the tax will be collected. He cited two existing ordinances, one governing the collection of taxes on amusement machines and another that governs taxes on amusement facilities, as examples of where such enforcement is lax.
His comments prompted Councilman Larry Dellegrotto, who sits on the newly formed finance committee, to pledge to investigate the matter further.
Initially, the mercantile and business privilege tax was planned to be $12,500 on any business earning above $500,000. Councilman Joseph Esposito explained, however, that complications and gray areas in that ordinance prompted the borough to reconsider and lower the amount.
Esposito added that other cost-saving measures are being considered, but he refrained from going into specifics after the meeting.
Dellegrotto pointed out council will now be heavily scrutinizing detailed information collected from frequent department line item budgets, but that a great deal of &ldquo;belt tightening&rdquo; will be needed in order for Exeter&rsquo;s financial prospects to turn around.
He anticipates that, by the end of 2012, the borough could be between $150,000 and $200,000 in debt.
That figure could fluctuate depending on tax payments received from 2011 and profits from the possible sales of land owned by the municipality.
When questioned by resident Joe McCabe on how such a debt could have accumulated, Councilman John Morgan pointed to flooding problems from sewer main breaks, excessive rains pouring into the Hick&rsquo;s Creek Watershed and the difficulties experienced by the borough during the September flooding from Tropical Storm Lee.

$500 Business-related Tax Is Adopted