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Projections from Municipal Revenue Solutions show as much as $119,000 coming to Wilmore from its tax amnesty program that it has been working on since the city hired the service in May.

According to Lisle Cheatham, the principal partner of MRS who made the presentation to the Wilmore City Council Monday, the company has identified 308 licensed businesses operating within the city limits that could be subject the 2 percent net profit payroll tax.

MRS is requesting 1099 vendor information from 40 more.

“We have reasonable belief (the 308 businesses) are subject to your tax and for whatever reason have not been compliant,” he said. “It is an ongoing process, but we are ready to do that first mailing to those 308 businesses, and we’re ready to send out to those 40 businesses we’ve identified requesting their 1099.”

The city hired MRS after the company came to it in January offering its services to locate and notify businesses that either have not been paying the city’s payroll tax or have been paying to the wrong entity, such as Nicholasville or Lexington. The idea was to bring in revenue through an amnesty program where the businesses could pay back up to three years of back taxes owed without penalty, and those businesses would be added to the city’s database so it can continue to collect from them in the future. Wilmore’s current database has 475 businesses, and Cheatham said he projects it to be at 729 by August 2010.

He said in his work with other communities, he has been collecting an average of $234.60 per new account, however most of those counties have either a 1 percent tax or a sliding-scale tax. He gave a range of revenue from $59,588.44 on the low side to $119,176.88 on the high side.

“Quite honestly it’s always a shot in the dark because the types of businesses in one community don’t necessarily match up with the types of businesses that are in and out of another community,” he said. “In my mind, I’m shooting for somewhere around that $80,000 mark. If we get that I’m going to be happy.

In addition to the licensed businesses, MRS found 498 insurance companies that are possibly offering policies to Wilmore residents — including even Mayor Harold Rainwater

“Today I got another notice, and my municipal tax is still being paid to Nicholasville on my car insurance,” Rainwater said. “This is the second time that I have looked at it and noticed that. I wonder how often that’s done.”

The next step in MRS’s process will be to send out a mailing that will notify the businesses of the situation and will have them gather documentation to see how much they owe to Wilmore. If the businesses don’t reply, it gives two more contacts before confronting them personally.

Wilmore paid $2,500 up front and will pay another $2,500 at the first mailing of notices to businesses and vendors. After that, the first $10,000 in taxes collected goes in full to the city. For amounts collected between $10,000 and $150,000, the city gets 65 percent, and MRS gets 35 percent. After $150,000, the percentages go to 75 percent and 25 percent.

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