Business Licenses and Permits

The County Board in Humboldt County, CA has recently adopted a policy that will give preference to local businesses when awarding contracts.  According to the Contra Costa Times, businesses eligible for preferential treatment must have a local business license or permit, must not owe any taxes and must be in business for 6 months prior to the bid.

To indicate preference the county will reduce bids by local businesses by 5% or up to $5,000 when comparing them with bids from out of town businesses.  The county is using the Local Multiplier Effect theory to justify this reduction.  The theory says that 45 cents of every $1 spent at a local business goes back into the local economy vs. 15 cents from an out of town business.

This is an interesting move by Humboldt County to help local businesses.  It is extremely difficult for local businesses to compete with larger corporations when bidding for contracts.  By leveling the playing field the county is giving local businesses a chance to prosper.

Amy Lee, Business License Research Analyst, Corporation Service Company

Tags: business license, California