In-home business owners may suffer sticker shock
Some small business owners in Summit County suffered from sticker shock when they received their bill recently for next year’s business license renewals.
The price for home-based operations more than quadrupled in 2006 and some of the area’s smallest entrepreneurs are now paying as much as Wal-Mart, The Canyons and other commercial behemoths that do business along the Wasatch Back. Though most businesses are required to submit renewal payments by Dec. 31, to provide time to adjust to the drastic increase, county officials extended the payment deadline for in-home business owners to March 1, 2006. The county recently studied how licensing fees could be changed in order to comply with a state law that requires governments charge for only the costs associated with issuing business licenses. In 1997, the Utah Legislature became concerned that cities were using excessive licensing fees to generate revenue.
Instead of charging businesses based on their perceived impacts, the Summit County Commission is now "apportioning the costs, where the costs are actually going," said David Thomas, Summit County’s chief civil deputy attorney.
Which means those doing business out of their homes in unincorporated Summit County must pay the same $175 fee as the area’s largest retailers. License fees had previously been based on square footage or how many customers businesses were expected to serve.
"It’s counter-intuitive," County Commissioner Bob Richer said. "It is not necessarily fair, but it’s the law."
However, South Summit resident Paul Brown says people like his daughter, who operate businesses out of their homes must now work several weeks just to pay their licensing fees.
"That is flat-out outrageous," Brown said.
Kamas City would charge his daughter about $40 for a business license, which is similar to the price the county charged in-home businesses in 2005, he added.
"You’re hammering small businesses that are barely surviving anyway," Brown said. "We’ve got to get real here."
Richer acknowledged that the new rules require large operations like The Canyons and Staples to pay far less for licenses.
"They went from thousands of dollars to hundreds of dollars," the commissioner said.
But it’s too late to go back now that Summit County complies with state law, he added.
"It’s tough now to say, we’re now in compliance with the law but we take it all back," Richer said.
That route, however, appealed to Summit County Commissioner Sally Elliott.
"Who’s forcing compliance?" she asked Thomas during a meeting recently in Coalville. Elliott, who voted for the new fee schedule a few months ago, backed away from her support for the proposal.
"It doesn’t seem right to me," she said. "I don’t think it ever occurred to me that the rise in fees would be this dramatic." But if Summit County is one of only a few governments in compliance, "it might be a good idea to change the law," Elliott said.
"I think you’d have a hard time in the Legislature," replied Thomas, who also serves as a Republican state senator for Davis and Weber counties.
"I wouldn’t count on it going away," Richer said.
Six departments are required to sign off on each business license issued by the county, Summit County Clerk Sue Follett said, adding that county employees also perform on-site inspections.
The new fee schedule was debated for several months prior to its adoption and is available for review at http://www.summitcounty.org.
"It’s a shame that no one paid attention," Follett said, adding that commissioners have heard from several residents concerned about higher fees.
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