Business Licenses and Permits:: Published by Corporation Service Company » Blog Archive » Growing Number of Cities Raising Business License Fees

Throughout the country cash-strapped communities are looking for ways to generate additional revenue to shore up massive budget shortfalls. Unfortunately for business owners, one of the most popular solutions has been to increase business license taxes. The state of California in particular has seen a plethora of its communities raise fees and tax rates; however, this change has had some negative consequences.

In the past five years, over 400,000 small businesses have closed in California according to the California Small Business Association, due in large part to the ever increasing business license tax programs. It’s not just the general business license fee that is causing all of the problems.

In many communities such as San Marino, there is a $50 delivery fee for delivery companies. The one-time fee payment is good for a year, but even companies that just make one delivery into the community have to pay the fee. One can only imagine the total cost of doing business in an area if every community adopted a policy like this.

Everyone knows that towns and cities are desperately looking for solutions to fix their mismanaged budgets, and the popular idea amongst city officials is to raise taxes. But in doing so, many businesses are severely punished and some have to close because of this. Hopefully communities start to find solutions that don’t harm the business community.

Ryan Julson, Business License Research Analyst, Corporation Service Company