EDC backs new tax on small businesses

Hecky Powell.

Despite opposition from the only two business owners on the panel, Evanston's Economic Development Committee Wednesday recommended approval of a plan to impose a registration fee on thousands of additional businesses in the city.

Under the city's current regime, home-based businesses and businesses that require state licenses are exempt from the city's licensing program.

That means only about 400 food-service businesses and an additional 500 mostly-storefront businesses are subject to the licensing program, which charges fees ranging from $40 to $250 per year. (The city's only movie theater complex faces a separate $0.95 per seat licensing fee.)

The new proposal, from the city's economic development staff, would increase the city's total take from non-food-service businesses from $53,000 a year now to a projected $255,000 a year by taxing an estimated 2,500 home-based businesses and 1,400 professional services firms.

The new annual fees would range from $25 for home-based businesses to $250 for establishments occupying more than 10,000 square feet of space.

Illinois last year cut annual licensing fees for the limited liability companies formed by many home-based and other small business owners, which had been among the highest in the nation. But city officials now are seeking to take back some of that gain.

Member Hecky Powell, owner of Hecky's Barbecue, objected that storefront business owners pay higher taxes. "Our overhead is a lot more than somebody operating from home."

"It's too much, these taxes," Powell said, suggesting that the city eliminate the business registration process entirely.


Mary Beth Berns.

Member Mary Beth Berns, an architect who works from home, said the city provides no service to home-based businesses.

"You're asking me to pay for the right to be in your database. That seems crazy to me. I don't understand why I should have to pay to give you [the city] the right to email me."


Robin Rue Simmons.

But Alderman Robin Rue Simmons, 5th Ward, who formerly owned a home-improvement contracting firm but now works for a non-profit career training agency, said she thinks the new registration requirement "is a great idea."

"We are missing some businesses and missing opportunities to support them," Rue Simmons said.

Alderman Peter Braithwaite, 2nd Ward, said the city doesn't currently capture demographics about many local businesses that could be used to encourage them to seek contracts with the city.

"I like the idea of being able to capture that information," Braithwaite said, adding that "it sets us up if we later decide to license landlords that we would have some information already in place."

The plan now goes to the City Council for action next month. The proposal calls for making payment of the new fee due by Dec. 31 this year. Non-profit organizations would be exempt from the tax.

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Comments

Congratulations-You found a new way to drive business out

Will the Council never run out of ways to tell business [and residents also see it] that we really don't like having those nasty businesses in Evanston.
The goal seems to be to turn Evanston into another prairie farm---if they could only get rid of NU and the hospitals the Council and their supporters would be very happy.
How about cutting city expenses and all the give-a-ways to 'businesses' they think are 'winners' [esp. arts groups].

Robin Rue Simmons...

... clearly knows which way her bread is buttered. So now she's for the tax so that her "non-profit" can further benefit.

I 100% agree with Mr. Powell and Ms. Berns - no more frivolous taxation! If city government really wants to know who the local businesses are, they can get that information from Secretary of State who keeps our annual reports and other records.

Minor Home Based Businesses

Under the current city code, businesses claimed as Major Home Occupations are already required to get a license and pay a fee, right?  So the 2,500 additional Home Based Businesses must be just those currently considered Minor Home Occupations -- where it's one person working inside their own home.  Or it's just a paper company like a family LLC.

What triggers the need to register for a Home Based Business?  If this is just an Evanston tax on LLCs, LPs, S-Corps, etc. -- the City needs to say that.  Are Sole Proprietorships expected to register and pay?  And, again, at what stage?  This starts to get very murky.  Infringing on people's privacy and adding further red tape and financial barriers to people starting their businesses and careers.

It's hard to see this as anything other than a money grab.  The City is currently rummaging through Evanston's sofa cushions trying to find any and all fees they can raise to try and balance the budget.  All the while selling off city assets and parking lots.  But as long as it's for Equity or Affordable Housing, it's OK, right?  

The message Evanston is sending to the world is one of too many regulations/taxes/fees...and too little fiscal responsibility.

What about Condos, Co-opt, townhouse associations ?

I'm sure they can find even more to tax. What about the American Legion, clubs at NU and ETHS, sports groups [like bussing to Bears games].  The Council will probably be even more creative and find others to tax.  They will thn spend the money on their pet projects---then demand more taxes and fees to fund things not done with the money they supposedly were raising the taxes for.

Why would potential home buyers [and even renters to indirectly are taxed] and esp. businesses want to come to Evanston ?