County rethinks business-license fee Patrick Parkinson Of the Record staff
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.
Phones have been ringing at the Summit County Clerk’s Office since the county adopted a plan in December to charge some of the county’s smallest entrepreneurs $175 for a business license. Officials recently studied the issue and changed the fee to comply with a state law enacted in 1997. "I’m thinking maybe there are some unclear questions," Summit County Clerk Sue Follett said. "The in-home businesses were concerned." The Legislature’s intent was to prevent counties from gouging larger businesses to gain revenue, Follett said. "Counties could charge whatever they chose and I don’t think that’s right," she said.
But South Summit resident Paul Brown says home-based business owners shouldn’t be charged as much as the area’s retail behemoths. Other opponents have written letters to The Park Record and a recent newspaper editorial, encouraged commissioners to revisit the issue.
But Follett 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, she 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 are now charged the same $175 fee. "We knew it was going to be a shock it’s hard to have an increase," Follett said. "It’s a shame that nobody paid attention."
But Summit County Commissioner Sally Elliott says she didn’t realize the impact the new fee would have on small business when she voted for the plan last year. "I think I was wrong," Elliott said Friday. "I don’t think we really explored some of the possible outcomes of what we were doing perhaps I wasn’t asking the right questions."
The County Commission intends to discuss the license fee this month and Elliott hopes costs for home-based businesses can be reduced.
"We will find out what we can legally do and then we will talk about what the moral thing to do is and then we will make a decision," she said.
According to Follett, a business owner can’t be charged more than $175 but county officials could choose to charge some people less. "Instead of putting the costs on the businesses, you can put it on the county taxpayers and subsidize the businesses," she added. Follett hopes the County Commission has the political fortitude to stand by the controversial decision. "I want to stay with it and go forward," she said. Past license fees, for example, could be based on the number of customers the establishment served or how many units a lodge had to rent. "It was really a convoluted, unequal way of doing business," Follett said. Summit County Commissioner Bob Richer says he isn’t comfortable charging small companies $175 to do business in the county.
"Our desire has always been to comply with Utah law and at the same time we have no desire to create a fee that is onerous to the small business owners," he said, adding that the adjusted fee will result in the county losing roughly $50,000 in revenue each year. "This was a revenue-negative move." Meanwhile, Follett claims the fee is based on what the county pays its employees to process documents and inspect businesses. Fees for fire inspections not required for home-based businesses are paid separately to fire departments, she added.
Commissioners have extended the deadline for in-home business owners to pay their license fees from Dec. 31, 2005, to March 1.
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