County may subsidize some business owners
March 15, 2006
The cost to silence a small number of business owners, who suffered sticker shock in Summit County last year when asked to renew their business licenses, is expected to fall on taxpayers.
When those who operate businesses out of their homes were told their fee increased from $40 to $175, some refused to pay.
The backlash from business owners has Summit County commissioners rethinking whether those who work in their homes should be required to pay as much for a business license as a ski resort or grocery store. Officials recently hired a consultant to study the issue. Based on the analysis, commissioners say they changed the fee to comply with a state law enacted in 1997.
"I think I was wrong," Summit County Commissioner Sally Elliott said recently. "I don’t think we really explored some of the possible outcomes of what we were doing."
The Legislature’s intent was to prevent counties from gouging larger businesses to gain revenue, Summit County Clerk Sue Follett said.
"Counties could charge whatever they chose and I don’t think that’s right," Follett said.
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She claims fees must be based on the county’s "administrative costs" of issuing business licenses. Officials in six departments must sign off on licenses before they are approved, Follett added.
"It’s really hard for people to believe that the steps are the same for an eight-by-10 room in someone’s home compared to the Wal-Mart or The Canyons," Follett said. "The size of the business does not matter."
In 2005, The Canyons paid nearly $40,000 for business licenses. Other businesses paid around $5,000, the clerk said, adding that all companies in the county should now be charged the same $175 fee.
However, after not anticipating the outcome of the controversial decision, the Summit County Commission this week is expected to begin subsidizing license fees for home-based businesses.
But deputy Summit County attorney Jami Brackin cautioned commissioners about treating one class of business owners different than others.
"As long as you can articulate, legally, why you’re treating one class different than the other, fine, do what you want to do," Brackin said.
According to Follett, a business owner can’t be charged more than $175, but county officials could charge less.
But County Commissioner Bob Richer questioned whether officials have interpreted the law correctly.
"We certainly do seem to be kind of out there on a limb by ourselves other jurisdictions aren’t revamping their business licensing fees, aren’t as costly as we are," Richer said. "We may know that we have the correct legal position but somehow it doesn’t feel right to people maybe we’re not right."
Commissioners discussed subsidizing license fees by charging in-home business owners $67.36, which could cost taxpayers $50,000. The board is scheduled Wednesday to make a decision.
"I think people will live with that," Summit County Commissioner Ken Woolstenhulme said. "I wish we hadn’t even messed with it to begin with. Other jurisdictions around the state are not doing anything about it."
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