4 responses to “Business License Scofflaws”

1. Gerald

   January 7, 2008

   Of course businesses situated here in Burlingame should operate with a Burlingame business license. Of course.

   But at the city council meeting a couple of weeks ago, Mayor O’Mahony expressed a desire to oblige ANY COMPANY making ANY BUSINESS TRANSACTION in town to have a Burlingame business license.

   She cited the Frito-Lay company and said “If Frito-Lay wants to do business here in Burlingame, and clearly they do, then Frito-Lay should have a Burlingame business license.”

   The local Frito distributor for San Mateo county is licensed and located in Brisbane. Similarly, the Budweiser distributor for the county has its office and warehouse in South San Francisco. The local Coca Cola bottler operates in San Leandro.

   All of these companies service stores and business here in Burlingame.

   I hope the mayor and council members will take a more sensible stance and oblige businesses who have a physical “footprint” in town to have a Burlingame business license. Asking the thousands of companies which happen to deliver merchandise or supplies, for example, to Burlingame companies and residents could seriously hamstring business in town.

   I inquired if I got in a taxi at SFO…should I have the driver first stop at City Hall to buy and business license before dropping me off at my destination? ((And who do you think would be asked to pay this fee?))

   How would you oblige companies which do not have their own delivery vehicle to have a license to ship their wares via UPS or the postal service, for example, to buy a business license?

   This sort of measure would require a pizza delivery business in San Mateo to have a Burlingame business license. Can you imagine what will happen if every city in San Mateo County enacts or attempts to enforce this sort of scheme?

   In speaking with a grocery store consultant this past week I was told “Frito Lay will simply, then, not do business in Burlingame. Then you will only find those products in chain stores, since they have their own distribution system. The local mom & pop stores will not be able to offer those products. Do you think Coca Cola cuts a check to every city in America to be able to sell its sodas?”

   We’ll need to erect a wall around Burlingame and hire a team of “customs officers” to check each and every vehicle coming into town. I spoke with a potential scoff-law who said she would have her supplies delivered to her San Mateo store and secretly ferry them to her Burlingame location when nobody was looking.

   One person aware of this described it as “…the City Council is looking for loose or lost change in the couch. That’s what happens when you’re desperate.”

   The thought of shaking down the local girl scouts for a business license so they can sell cookies is sad.

   Below is the code as on the books presently and a note from the city’s finance director…

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   The ordinance states (Section 6.08.020 License Tax):

   (a) Every person conducting or carrying on the business consisting of selling goods, wares and merchandise or commodities, or services, or conducting or carrying on any profession, trade, occupation, calling or business not otherwise specifically taxed by this chapter.?

   (b) Every person not having a fixed place of business within the city who engages in business within the city, including contractors.

   Coca-Cola and Budweiser distributors sell and deliver merchandise to Burlingame businesses. They don’t have to have a fixed place of business within the city as indicated by the ordinance. Therefore they are required to pay the $100 annual business license tax.

2. Myles

   January 7, 2008

   Great points Gerald.

   But the threat of not paying the business license brings what? Have you ever heard of a business being sold because a city forclosed on it for not paying its business license?

   Never going to happen and would probably bring a big lawsuit on to the city.

3. Gerald

   January 15, 2008

   I sent a note to as fellow who’s on the State Board of Equalization here in California asking him about the possibility of having any company bringing its supplies or merchandise to Burlingame residents and businesses be subject to having a Burlingame business license.

   Here’s his response:
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   Gerald,

   Thanks for your note. Burlingame might as well put up a toll gate on the freeway and charge everyone passing through. Your point about the point-of-sale is right on target and it is how sales taxes are calculated for most (but not all) retails sales in the state. Somehow I doubt that bit of logic will change the minds of tax-hungry policymakers.

   All the Best,
   Bill Leonard
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4. Gerald

   January 29, 2008

   The notion of Burlingame asking every enterprise setting foot in town to have a “business license” made the weekly “Leonard Letter” out of Sacramento.
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   http://www.billleonard.org/
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   In these challenging budget times, it is no wonder that cities are seeking to maximize their legitimate revenue sources and it is equally unsurprising that an industry of municipal auditors exists to help cities find ways to increase their take. A businessperson in northern California wrote to me to share his concern with his city’s attempt to impose business taxes on even more people. In particular, cities are now being advised by these auditors to exact business license fees from anyone and everyone doing any sort of business in town: the crafter who comes in for a weekend art fair, Coca-Cola, Frito Lay, etc. Imagine if Coca-Cola did have to pay a business license fee in every single city in which it distributes its soda. It would decide not to provide inventory to individual stores or independent restaurants in those cities, but instead would only do business with large chains that have their own distribution systems. I also have read of cities that charge the same amount of business license tax to a one-person, home-based business as to a large retail chain. I understand local officials’ need to make sure that companies in their boundaries are paying local taxes, but taking this to an absurd level will not result in more revenue, will actually damage many local businesses, and will generate more ill will than satisfied residents.