ELKINS — Elkins City Council has approved the first reading of an ordinance that would incorporate a “de minimis” exemption for certain small businesses and independent contractors, a change now required by state law with West Virginia House Bill (HB) 2451.

The nine members of council in attendance approved the first reading of Ordinance 344 during the June 12 meeting. Ordinance 344, in compliance with HB 2451, will amend §110.055 of the Elkins City Code to allow certain exemptions for “independent contractors and sole proprietors from business licenses under certain requirements.”

“During the regular session that ended April 12, the legislature passed House Bill 2451,” Elkins City Attorney Geraldine Roberts told the council during the June 12 meeting. “I’m not sure what exactly prompted these changes, but in light of the fact that you need to make the changes in your city code to comply with this bill, which will be effective July 11, we have put together, as you can see, just the sections that are going to be changed.”

The purpose of HB 2451 is to facilitate the creation of home-based businesses, with certain conditions. According to Chapter 8, Article 13 of the bill, “a municipality shall not impose its business and occupation or privilege tax (B&O Tax) on any business with a gross revenue below $2,500 annually.” This became a topic of discussion during the council’s meeting.

Roberts explained to the council she was told by a source that this provision in HB 2451 came about for those who are paid to officiate sporting events, such as high school games, and who “didn’t like the idea of having to pay that amount of tax.” While Roberts admitted she wasn’t sure how accurate that was, Mayor Jerry Marco remarked that it was accurate.

“As I said, there have been a lot of anecdotal bills passed this last time,” Roberts said. “I believe this might be one of them. So, I think we’ve done our best. Most of the municipal attorneys have worked hard to figure out how to make sure their codes match what’s going on.”

Roberts also stated that people who fit in the $2,500 threshold and wish to be exempt from the B&O Tax will have to provide evidence to Elkins City Treasurer Tracy Judy. It will be at Judy’s discretion as to what is needed to prove the exemption, Roberts explained.

“If you want to say, ‘I don’t have to pay B&O Tax,’ you’re going to have to prove it,” Roberts said. “I mean, the burden should be on the person to be exempted. It’s not up to Tracy to go track him down.”

When questioned by Fourth Ward Council Member Andrew Carroll as to how the exemption would impact the staff work hours at the Treasury Office, Judy admitted that it was going to add extra time to an already busy workload.

Before the council approved the first reading, Marco added that the $2,500 threshold in HB 2451 is “a blessing” because the state legislature originally had the threshold at $25,000.

Roberts said the West Virginia Municipal League believed that tweaks will eventually have to be made to HB 2451 during the next legislative session, as some of the bill “doesn’t make sense.”

If the second reading of Ordinance 344 is passed during City Council’s June 26 meeting, the new ordinance will go into effect on July 1. HB 2451 requires compliance from the state municipalities by July 11.