The City Council discussed more details of a possible business license tax, including how the fee would be determined and what the money would be used for, but didn’t take any action at the Sept. 17 council meeting.
Council members seemed to agree on a "nominal" licensing fee of $40 to $50 per business, which would cover the costs of the licensing program. Some council members were also willing to consider a higher fee that would bring in additional money for the city.
Even if the business license doesn’t generate money for the city, regulating business has other benefits, Finance Director Jim Katica said — ensuring that businesses follow fire safety and zoning codes, providing contact information to the city and giving the city information to use in emergencies.
"We need to know who’s out there, who’s doing business, the number of employees they have," City Manager Richard Leahy said.
Woodinville already has a business registration program, but the city doesn’t enforce the late fee.
"The current registration program doesn’t quite work," Katica said. "...We’re never quite sure what kind of compliance we have."
With a license program, the city has a stronger position to take action and could ensure that it has information from all businesses, he said.
Statewide, about three-quarters of cities with a business license charge a flat fee, but some neighboring cities have other strategies. Among nearby cities, Redmond determines the fee based on number of employees, Kirkland charges a flat fee plus an additional fee based on revenue and number of employees, and Bothell takes into account the number of employees, the type of business and its square footage.
"It’s so hard to get at something that fairly assesses ability to pay and then asks businesses to contribute on that basis," Councilmember Susan Boundy-Sanders said, rejecting the idea of basing the fee on revenues, profits, number of employees or assessed value. "... I’m kind of despairing about a way to get to a fair, progressive model."
Dave Witt, executive director of the Woodinville Chamber of Commerce, said most businesses who are members of the Chamber support a nominal fee to cover the costs of administering the program, but they wouldn’t want an additional fee based on square feet, revenue or number of employees.
"They don’t like the idea of a fee that could impede or discourage business," Witt said.
Carol Monro, director of community relations for Chateau Ste. Michelle, expressed a similar thought — that a fee based on the number of employees would unfairly affect large businesses.
If the city decides to charge a higher fee to raise money, the council still isn’t sure about the best way to spend that money.
Deputy Mayor Liz Aspen said she wants the money to go into economic development to help businesses, but admitted "economic development is quite ambiguous at this point."
Boundy-Sanders said that whatever model the city uses to collect money, she wants to be sure the city spends it in a way that will benefit all businesses.
"Redmond, which is the economic juggernaut in this area, uses those business license dollars to improve their roads," she said. "... Economic development would benefit primarily the retail and entertainment industries. Road improvements would benefit those industries, but it would also improve our industrial and office businesses."