JACKSON TWP — Some business owners in Jackson Township will be exempt from the once-controversial business privilege tax.

Township supervisors Thursday approved an amendment to the $800 tax which will exempt from the fee businesses making less than $300,000 in gross receipts per year. Previously, the tax was applied to all business with gross receipts in excess of $150,000.

Township manager Chris Rearick said Jackson does not know exactly how many additional businesses will be exempt from the tax following the amendment.

The proposed 2022 budget, however, projects $80,000 in revenue from the tax, equivalent to 100 businesses paying the fee. In its 2020 budget, the township projected $93,000 in revenue, or roughly 116 businesses paying the full $800 tax.

Jackson supervisors suspended collection of the fee in both 2020 and 2021, citing the effects of the COVID-19 pandemic on businesses.

Rearick said the $300,000 gross receipts figure was somewhat “random,” adding the increase with the exemption is aimed at easing the burden on smaller businesses.

“Looking at small businesses and what we typically know ... $300,000 seemed reasonable,” Rearick said.

As he noted when the tax was first collected in 2019, Rearick said the township is unable, under state law, to tax either a percentage of revenue or to tax businesses based on profits.

Municipalities which had a business privilege, or mercantile tax based on a percentage, prior to a 1988 change in state law, which limited the ability to collect such a tax, were grandfathered in. Jackson, however, only passed its tax in 2018 and can only collect a flat fee.

“We were counseled that we couldn’t push the (tax threshold) too high because there have been cases where larger businesses banded together and then sued a municipality, saying they were being targeted,” Rearick said. “So we’re just trying to balance that.”