The city is considering mandating permits for businesses in Fayetteville, and last night, a public input session prompted discussion, both for and against the idea. City officials, including Karen Minkel, the project manager for the proposal, were at the table, as well as representatives from the Chamber of Commerce, and local business owners.
But to understand the whole story, we have to consult the history books. In 1976, an occupation license tax was voted on and passed by Fayetteville residents. The money collected from those licenses was a revenue source for the city and cost most businesses $50, which would be $190 in today’s money, Minkel said at the meeting.
Then, in 1981, the county was trying to pass a city-county sales tax, of which Fayetteville would get a sizable portion of the money. So, in an effort to drum up support for the new tax, Fayetteville officials agreed to drop the business license fees if voters approved the city-county tax. And, the city followed through on that promise.
Today, the city is in favor of the business permits because it would allow the city to gather data on business growth, said Minkel. It would also have public safety benefits, because, for example, the fire marshal would know when a new business opened and could conduct an inspection.
The draft of the proposal suggests an annual $64 fee for businesses. The cost is not meant to generate revenue, but was set to compensate for staff time and materials.
Fayetteville is the only city with a population of more than 50,000 in Arkansas that does not require business licenses, Minkel said.
The entire application for the business permit would be subject to FOI inquiries. The form includes a blank for a cell phone number and if it is a sexually oriented business, among other inquiries. There is also an optional question, asking if the owner is a minority, a woman, or a veteran.
Charlie Sego, a Fayetteville business owner, said many items on the application form were “superfluous.” He added that, while a $60 tax might not break any business owner, the straw was somewhere.
Aaron Stahl, who owns a home-based business, said Fayetteville, particularly the Chamber of Commerce, should be proud that it doesn’t require a license and should use it as a selling point to attract business.
Representatives from the Chamber of Commerce said they were in favor of the permits so the city would have a registry of all businesses. When potential business owners call the Chamber of Commerce, they typically want to know what other businesses are in the area. Without a registry, it “undermines the chamber’s credibility,” said Chung Tan, the manager for economic development for the chamber.
City officials have discussed requiring business licenses several times in the past ten years, but a plan has never left the ordinance review committee, Chief of Staff Don Marr said.
Earlier discussions had stalled, recalled Bill Ramsey, who was at the input session, because city officials thought it would breach the public trust after the Fayetteville Board of Directors in 1981 agreed to do away with it in exchange for the sales tax.
Marr responded by saying the administration was not worried because the old system was for profit and the goal of current proposal is to remain revenue-neutral.
Business permit proposal details
- All businesses, institutions, corporations, LLCs, LLPs, partnerships, nonprofit associations, sole proprietorships or other non-governmental entities with a business in Fayetteville city limits must register.
- If a business owner has several locations, a separate permit would be required for each.
- The projected start date is January 3, 2011.
- The cost-recovery charge is $64 for paper applications and $57 for electronic applications for most businesses. If a home-based business does not generate any traffic, the fee is $46 for paper applications and $39 if the application is submitted online.
- Operating without a license could result in a fine of $250 a day of operation. If a business continues to operate without a business license for one week after notification, the Mayor could order withholding city services, such as water, sewer and solid waste.
- The Ordinance Review Committee must first approve the proposal. Then the item will go before the City Council, probably next month.
Mary Robbins is a regular contributor for the Fayetteville Flyer. She declared Fayetteville as her hometown upon moving here for college. She is a Journalism graduate who enjoys live music, the outdoors and attending city council meetings. For more of Mary’s contributions, visit her author page.