Businesses who do business in Glendale but aren’t located in the city soon won’t be required to get a business license through the city.
City Council told staff last week to move forward with an ordinance that changes requirements so only businesses with a physical presence in Glendale must have a business license through the city. City attorneys are still crafting the ordinance, which will also make other minor changes to Glendale’s business code. Staff says the ordinance should be ready for Council to vote into law on Tuesday, June 9.
Assistant City Manger Vicki Rios gave the example of a glass shop located in Phoenix that comes into Glendale to repair or replace customers’ car windshields. Under current law, that company would need to have a business license through Glendale. Under the proposed change, it would not.
The change does not affect businesses’ Transaction Privilege Tax status, which sends sales tax revenue to Glendale if the business activity is taxable to Glendale. Transaction Privilege Tax status is handled by the Arizona Department of Revenue.
Ms. Rios explained the reason for Glendale Business Licenses, which cost a business $25 a year to attain.
“The primary purpose of having a business license for those that are here physical present is to route them through planning and zoning and building safety and the fire marshal’s office and that type of thing,” she said, adding that businesses located outside of the city don’t have a need for any of those inspections.
In a review of 11 other Valley cities, Glendale staff discovered Phoenix and Mesa do not require city business licenses at all and only Glendale, Peoria and Avondale require businesses with no physical presence in their city to have a city business license.
Ms. Rios said state legislators have proposed getting rid of city business licenses altogether.
“This causes confusion for licensees because it’s different across various different cities,” she said.
Businesses with no physical presence in Glendale accounted for just over half of Glendale’s business licenses last year, bringing in $147,350 in gross revenue to the city. However, Council members on Glendale’s Business Council Committee that recommended the change said most if not all that revenue is used to pay for the administrative costs of issuing the licenses.
Other changes to the business license process from this ordinance will include licenses renewing on the day they were initially issued rather than January 1. This will stop new businesses from having to pay the full $25 fee for a partial year of licensing. It will also allow businesses to change locations in the city without needing to get a new license.
The ordinance will also plan to add exceptions for businesses it won’t require business licenses from: government agencies, taxi and ride share drivers, home-based educational businesses such as tutoring or music, language or swimming lessons. Current law technically requires anyone babysitting or looking after a child that they are not the legal guardian of to have a business license for childcare. The ordinance will change that so only formal childcare business licensed by state are required to have a Glendale Business License. Lastly, the city will also update its code to adhere to exemptions under state law: real estate agents and brokers are exempt from business licenses and residential rentals are exempt if rented for more than 28 consecutive days.