Business licenses should help nurture, not punish merchants
Everyone likes to pay homage to cottage industries (homemade is always preferable to mass-produced) but, this month, it appears lip service is all small business owners are likely to get from Summit County business license fee collectors.
In order to comply with state law, the Summit County Commission recently adopted a new fee structure that calls for a flat business license fee rather than a graduated fee scale based on the perceived impact of a particular business.
The uniform cost of a 2006 county business license is now $175, whether you knit hats in the laundry room or run the local Wal-Mart. That is a big hit for many in-home small business owners who previously paid about $40 for a license. And, as if residents weren’t already reeling from their winter heating bills and buying Christmas presents, the fees were technically due Dec. 31.
The commissioners say they empathize with their constituents who may believe the increase is unfair, but they justify the decision saying that the Utah State Legislate requires that the fee accurately represent the cost of issuing the license. The only way to come into compliance, they say, was to set a uniform fee instead of charging big businesses, like giant retailers and resorts more.
To abide by state law, the county decided to set that rate by dividing the county’s cost of issuing the licenses (which includes various inspections) by the number of businesses applying for them. So now, the mom who adds an extra $50 a month to the family budget by cleaning houses will be working about three months just to pay for her business license (and that’s before the county assessor gets a piece of the action).
Of course, that is assuming that she chooses to apply for a license at all.
Running a small business is a fragile affair. Most cottage industry owners constantly teeter on the brink of giving up. Nevertheless, many add an irreplaceable flavor to their community, offering indigenous products that cannot be found anywhere else and therefore help to define the local culture.
Jacking up their business license fee may be just the blow to put them under or to drive them underground where they will not receive the benefit of an inspector’s safety advice.
Neither benefits the county.
In their effort to comply with a senseless state rule, the commissioners may, in the process, damage a valued part of the local economy. We would encourage the commission to confront the legislature this January about this counterproductive policy.
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