"We were looking at the possibility of a $21,000 deficit and the tax should cover that and get us on track for the future," Followell said.
Followell said that number could be less this year because of the timing of the ordinances ratification, but that actual revenue could be higher in the future when taxes from self-employed people are factored in.
Councilman Jimmie Cocanougher said that the tax was an absolute necessity.
"We had to do something," Cocanougher said. "It was either do that or look at cutting a service like trash pick-up."
The ordinance makes businesses responsible for withholding the tax if they are not legally exempt from doing so and paying it on a quarterly basis. Self-employed individuals are responsible for paying the tax themselves.
There is a $25.00 penalty for failure to pay the tax and past due taxes will have a 12 percent interest rate yearly until they are paid.
In other business, the city approved real property taxes at 27 cents per $100 dollars of valuation, personal property taxes at 29 cents per $100 of valuation and motor vehicle and watercraft taxes at 40 cents per $100 of valuation. The taxes were held at the same rate as last year.
The council also opened bids for the city's old dump truck and fire truck and accepted the highest bid for each. Kenneth Thomas bid $2,250 and it was accepted for the dump truck. David Farrell's $816 bid was accepted for the fire truck.