City finance staff briefed the Greenville City Council on required changes to business license classifications tied to the North American Industry Classification System (NAICS) update and South Carolina Act 176 of 2020, and council members signaled support for pursuing options that hold the city’s business-license revenue neutral.

Patricia (CFO) presented the required updates, saying, “under South Carolina act 176 of 2020, the standardization act, municipalities are required to update their business license classifications every odd year,” and that the NAICS changes apply to license years starting May 2026. She told council the staff analysis shows approximately 100 businesses in transportation and warehousing would move to a higher class (resulting in increased rates for those firms) while roughly 3,500 businesses across four NAICS codes would move down a class, producing an estimated net revenue decrease of about $250,000 if the city’s rate structure is left unchanged.

Patricia described two broad policy options: accept the revenue decrease and maintain the current rate schedule, or adjust rates across classes to maintain a neutral revenue impact. She explained that class changes cascade (class 1 through 7) and that altering one class affects adjacent classes, requiring a comprehensive recalibration rather than a single-line tweak.

Staff also proposed procedural changes for improved administration: (1) convert the current one-time exempt/nonprofit registration to an annual registration with a nominal fee (proposal example: keep initial registration at $50 and consider a $25 annual fee) so the city can better track nonprofit locations for fire, codes and GIS purposes; (2) eliminate the declining scale for nonresident contractors taxed on outside-city gross receipts and instead adopt a flat-fee approach to simplify manual calculations and reduce errors; and (3) require background checks for certain personal-service businesses (for example, massage establishments), a proposal brought forward by the police department.

Council members asked for more detailed revenue scenarios but expressed general support for pursuing options that maintain revenue neutrality rather than accepting the projected $250,000 decline. Several members also supported the proposed nonprofit registration as a process improvement to keep the city’s database current. No ordinance or rate change was adopted at the work session; staff will prepare revenue-neutral scenarios and present detailed rate-adjustment options for future council consideration.

There was a motion to go into executive session after the discussion; the executive session agenda included several items unrelated to the NAICS update.