Street and safety committee chair Adam Wilkin, second from left, reads a statement from city income tax commissioner Sherry Davis as (l-r) Hillsboro mayor Justin Harsha and committee members Brandon Leeth and Patty Day look on. (HCP Photo/Caitlin Forsha)
Street and safety committee chair Adam Wilkin, second from left, reads a statement from city income tax commissioner Sherry Davis as (l-r) Hillsboro mayor Justin Harsha and committee members Brandon Leeth and Patty Day look on. (HCP Photo/Caitlin Forsha)
The Hillsboro street and safety committee verified that local mobile food vendors are required to pay income taxes during a committee meeting held Monday evening at the Paint Creek Joint EMS/Fire station.

In their fourth and what is expected to be final meeting to discuss proposed changes to the city’s ordinance on mobile food vendors, committee chair Adam Wilkin read a statement from tax commissioner Sherry Davis of the city’s income tax office. At their most recent meeting, held July 29, the committee said they wanted to clarify a disagreement between city officials and some mobile food vendors over the assessment of taxes.

“Mobile food operations must file taxes on income earned in the city, as do all other businesses, and withhold tax for their employees,” Davis wrote.

The Hillsboro income tax office website says that “The City of Hillsboro has a 1.5-percent income tax on qualifying wages, bonuses, commissions, tips, deferred compensation, etc. and also on the net profits of businesses, rental properties and farm income. This applies to all who live, work, own property or operate a business in the City of Hillsboro.”

Davis wrote that she had also spoken with city law director Fred Beery, Hillsboro deputy tax commissioner Bob Brown and Wilmington tax commissioner Marque Jones, all of whom agreed with her.

At the committee’s third meeting, safety and service director Brianne Abbott suggested that vendors should be required to “show proof that they’ve registered with our income tax office” when applying for a permit.

In her guidance to the committee, Davis agreed that the city should include the tax office’s business questionnaire and form when they apply for a permit. She also offered to “provide a pre-addressed envelope addressed to the tax office to maintain the confidential information listed in the questionnaire.”

After reading the information, Wilkin asked if any of the several food truck vendors in attendance had any questions for the committee. He and
committee member Brandon Leeth both suggested that the vendors contact Davis with tax-related questions.

One food vendor said that she questioned how the income tax could be enforced and assessed, considering they set up in other communities, not just within the city limits.

“I brought that up in the first meeting,” committee member Patty Day said. “Some examples of how other cities have done it is on a monthly basis, you turn in your sales receipts to whatever city you’re in, and that’s how it’s calculated, based on that. That’s an option that you could do, but I’m not saying that’s how it’s going to be. I’m just saying it’s one example.”

Under the current ordinance, the food trucks are required to have a permit, fill out the city application and pay the $200 fee, which is valid for a calendar year. One food truck vendor said that he thought the $200 permit fee was “so high because you couldn’t take taxes from us.”

“That being said, why’s that so high, then?” he asked.

Day reminded the vendors that at their first meeting, she had discussed “other cities that were doing either monthly or quarterly receipts being turned in were doing like a $50 application fee, just to be sure that you’re filed with them.”

“It was a lower application fee, but they were tracking your income more consistently,” she said. “That was their decision.”

Several people argued that other area towns “don’t charge anything.”

“That’s not entirely true,” Wilkin said. “There are towns that charge up to $500, and some are free.

“At any rate, the set $200 is not to cover your taxes, as it’s written right now.”

Council president Tom Eichinger told the vendors that the committee is still looking at how fees “should be set up for people who are here often versus people that are here just one time.”

Abbott said that under the city’s tax code, the vendors have to do business in the city for at least 20 days in a calendar year to be required to pay income taxes.

“We’re not going to track your income,” she told the vendors. “All you have to do is file with the tax office to obtain a permit. We’re not going to actually go through and track your revenue. That’s up to you and to your tax preparer.

“It’s fair across the board because it’s the same way with someone who starts a business within the city. We’re going to require that they register with the tax office, too. That’s an equal playing field. We’re not trying to tax you like crazy, it’s just a typical requirement of doing business within the city.”

A vendor said that someone at the city building told her last year that permits were only necessary for setting up on public streets and were not required for setting up on private property.

“I just don’t understand how nobody said anything last year, but now all of a sudden it’s a big deal,” she said.

Day and Abbott both pointed out that the city administration changed in January.

“We’re just following the ordinances as they’re written,” Abbott said. “They’ve been written this way for a long time. That’s why we’re looking into changing it.”

Following feedback from the vendors, the committee voted 3-0 to bring their suggested changes to council. Wilkin said that he hoped to bring proposed legislation to council’s September meeting.

For more on the changes outlined at the committee’s previous meetings, click the links below.