Why does the town of Truckee not require business licenses? | SierraSun.com

Why does the town of Truckee not require business licenses?

TRUCKEE, Calif. — In many communities, there are many things you need to do in order to open your own business. You need a business plan, a location, financing and a website; you need to register for state and federal taxes; and you need to hire employees.

But in the town of Truckee, there’s one thing you don’t currently need: an actual business license.

“We haven’t gotten around to it,” Truckee Town Manager Tony Lashbrook said when asked why.

Truckee’s 2016-17 fiscal year budget, which town council voted to approve in June 2016, included a recommendation that council allocate $30,000 for a business license feasibility study to be conducted this year.

“With the explosion of short term rentals, the specter of marijuana sales, and the need to understand the success of the place-based marketing efforts, the ability to implement a business license program is increasingly important.”Tony LashbrookTruckee Town Manager

As for when the study may occur, Lashbrook wouldn’t say. Of note, the 2016-17 fiscal year ends June 30.

“This has often been a topic discussed by the Council and by local business groups from time to time,” according to the 2016-17 budget document. “With the explosion of short term rentals, the specter of marijuana sales, and the need to understand the success of the place-based marketing efforts, the ability to implement a business license program is increasingly important.”

The lack of a business license program in the town of Truckee is unusual. Placer County requires businesses in unincorporated areas, such as Lake Tahoe, to obtain a license and renew it annually. Business license fees in Placer County can cost $108 or $128 the first year, depending on the business type, and $17 to renew annually.

On the Nevada side, Washoe County requires a business license, too. It costs $17 the first year, regardless of business type, but renewal fees each year vary between $55 and $655 depending on the sum of the business’ receipts the previous year.

Back in California, in El Dorado County, a business license costs $43 annually, except for “certain businesses such as secondhand dealers, pawnbrokers, fortune-telling, and carnivals,” which, according to the county code, must pay $140 annually for a business license.

The city of South Lake Tahoe requires what it calls a “Business and Professional Tax Certificate” to be renewed annually, and nearby cities such as Reno and Sparks, Nev., and Sacramento, Calif., also require business licenses.

“Nevada County, the mother county, does not have business licenses, so there was no structure around business licenses when the town incorporated,” said Lashbrook, referring to when Truckee officially was voted to incorporate into a town in 1993.

Nevada County itself doesn’t require business licenses, but the incorporated cities of Grass Valley and Nevada City do, according to the Nevada County Economic Resource Council website.

The purpose of the licensing system is to essentially create a database of businesses, which helps the town keep track of what’s going on within its boundaries and also to ensure everyone is following local regulations.

“It makes sure everyone has a level playing field,” Lashbrook said.

He added that the situation was similar to that of the local lodging tax and short-term rentals, since if the town doesn’t know a business is there, then it can be difficult to track whether it’s actually keeping up on taxes — and thus, creating revenue for the town.

Truckee Chamber of Commerce President and CEO Lynn Saunders said the Chamber wrote a letter to the town in May 2016 when they learned the town was considering a feasibility study regarding a business license program.

According to the May 6, 2016, letter authored by Truckee Chamber Board President Kelly Rodriguez, the chamber has no recommendation, but is supportive of the study to determine whether there is a need for such a program.

“A business license program can level the playing field by allowing businesses to have a complete understanding of competing businesses. It also can address the perspective of equity with license base fees and disproportionate fees for businesses (that utilize more municipal services such as police services), as well as possibly licensing landlords of short term vacation rentals along with a correlating Good Landlord Program,” according to the letter. “That said, we understand and appreciate the fact that Truckee businesses, who have never had to pay a business license fee, could be resistant to more government fees, regulation and control. Thus the need to retain a feasibility study to fully understand the pros and cons and possible repercussions, good and bad, of a business license program.”

It’s currently unknown how the fee structure would be set up if the town were to implement a business license program, but Lashbrook said that the town would only be able to charge whatever it costs to process the applications.

Anything else, he said, would be a tax and would require a vote.

Amanda Rhoades is a news, environment and business reporter for the Sierra Sun. She can be reached at arhoades@sierrasun.com or 530-550-2653. Follow her on Twitter and Instagram @akrhoades.


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