Merchant license letter generates confusion

Greene County Collector of Revenue Scott Payne said 599 merchant license applications were received in August, many in response to the letter. A typical month, Payne said, yields 50 to 60 applications, he said.

Payne was critical of the mailing, citing the expense versus the benefit received.

Jeffrey Reinold, Greene County budget officer, said, “We sent (the letter) out with the prosecuting attorney’s letterhead saying, ‘Hey, it’s a serious thing.’ We tried to get people’s attention. If I sent out a letter from the budget office and if the prosecutor sends out a letter from his office, which one are you going to open first? It was legitimate to send it out from him because it is a misdemeanor if you do business and don’t have a merchant’s license.”

The mailing list, he said, was compiled by comparing the city of Springfield’s business license list to county records and the Department of Revenue’s records to locate businesses within Greene County that lacked merchant licenses.

“We just started looking at it and it ended up being about 2,600 businesses in Greene County that we sent out letters to,” Reinold said.

In the two weeks following the mailing, Joclynn Brown, financial analyst in the Greene County budget office, spent the majority of her time answering nonstop phone calls regarding the letter. While Payne’s office usually fields calls regarding licensing, he said recent calls have been referred to Brown for consistency in answers. Brown also updates the list based on caller response.

“Some people were very upset and very confused, and other people were more worried about making sure they were within the law,” Brown said. “One or two of (the businesses) that the state had (on their list) had been labeled wrong. For instance, they had a day care labeled as a store.”

For the most part, she said, callers reported that they were no longer in business, and through conversation, Brown was able to determine the nature of their business and confirm whether callers were required to obtain licenses.

Requirements

Greene County merchant licenses are required for all businesses within the county that manufacture or sell tangible goods, whether wholesale or retail.

Reinold said there has been confusion on whether some businesses need the license. “We received a number of phone calls from Ash Grove and … they were telling (business owners) in Ash Grove, ‘If you’ve got ours, you don’t need Greene County’s,’” he said. However, the merchant license is required even if the business also is required to obtain a city business license.

Payne said businesses here that sell goods outside of the area, including online sales, are required to obtain merchant licenses. “It’s not based on where the customer is located. It’s based on where the business is located.”

Income

Merchant license revenue is grouped with other fees under the license category in Greene County’s operating budget. “The way we show it in our budget, we have beverage licenses, the Mediacom franchise tax, the merchant license and we’ve got auctioneer, billiards and pool licenses, and then the marriage license,” Reinold said.

Greene County’s 2004 budget lists revenue from licenses at $649,600, with total receipts for general revenue at $30,286,323.

The cost to obtain a merchant license has been $25 since the mid-1990s, Payne said.

“Right now, the county’s share of that $25 is still $5, and $20 of it goes to the county employees’ retirement fund, which is a statewide retirement fund for county employees throughout the state,” he said.

Reinold said the current push to get merchants licensed isn’t a big revenue producer. “The $13,000 that Greene County could receive out of this if all 2,600 (letters) came in … it’s not going to make a huge difference … but then again, nickels and dimes all add up,” he said. “We look at the revenue numbers as a whole and we try to squeeze every dime we possibly can out that is Greene County’s to be had.”

Considering the postage, stationery and manpower required to conduct the mailing and answer related phone calls, Payne said, “The reason I was critical of sending this letter originally (was) because the county gets $5 of each one of those licenses, which means out of this roughly 600 (merchant licenses issued), the county gets $3,000 and the county employees retirement fund gets $12,000. … If it takes 50 cents to send out each one of those (letters), and I think that’s a conservative estimate, that’s $1,500 right there of expense just to send those letters out. So if the county gets $3,000 out of the 600 licenses and spends $1,500 just to send that original letter out, that cuts down the county’s share to $1,500.”

“And when we send out 600 licenses, that’s another 50 cents a copy. That’s another $300 (in expenses), so the county nets maybe $400 or $500 out of that mailing and the county employee retirement fund gets $12,000,” Payne said.

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