CLAYTON — Clayton council implemented new provisions to its codified ordinances pertaining to the levying and collection of its municipal income tax as required House Bill 5.
Every municipality must rewrite its tax ordinance before the end of the year. The tax credit portion does not have to change due to House Bill 5, but the city has opted to change its tax credit as part of its revision in order to fund road improvements.
In short, the city will decrease the amount of the tax credit from 100 percent to 50 percent of funds generated in order to fund extensive road improvements and maintenance.
For instance if a resident 18 and older works in a municipality that collects an income tax higher than what Clayton collects, they would be responsible to pay at least .75 percent of the difference to Clayton. If a resident works in a municipality where no income tax is collected, that person currently pays Clayton 1.5 percent in Income tax. The city’s tax rate remains the same. The revision will not take affect until January 2016.
“The tax collection will go toward funding a three year, $6 million road improvement fund and will continue to provide additional revenue sources for a long-term road resurfacing program,” said City Manager Rick Rose.
The city has 215 lane miles of road to resurface and maintain and this revision will help the city accomplish that goal.