City considers slashing business-license fees

A Columbia City Council committee wants to explore the idea of dropping the city’s business license fees to a flat rate gradually over five years.

Finance, Audit and Budget Committee chairman Councilman Cameron Runyan on Thursday asked city staff to look into the implications of setting business license fees at a flat $100 per year.

Should City Council adopt such a proposal, annual collections would plummet from about $10 million to about $1 million in five years, city collection data show. The move likely would not be possible for the upcoming budget year that begins July 1.

In the 2014 budget year, Columbia collected $10.1 million in business license fees from 9,897 businesses, records show.

For years, the city has charged annual license fees based on the type of business and their yearly gross revenue.

The discussion about business license fees stemmed from a concern raised by Runyan and Councilman Moe Baddourah earlier this week when council voted 5-2 to direct city finance officials to raise the franchise fee paid by SCANA Corp. for the right to supply power to city residents. That fee, based on the utility company’s revenue, could be raised from 3 percent to 5 percent. The utility ultimately passes the expense onto residents and businesses.

That would put an unfair burden on small business owners, argued Baddourah, a small business owner himself. To offset that burden, he asked that council consider lowering the cost of business licenses they pay.

Thursday’s discussion grew from ways to help small businesses to a broader review of the city’s business license practices.

Rep. Rick Quinn, R-Lexington, further enlarged the discussion when he explained legislation he is sponsoring that would overhaul state law to cap business license fees at $100 statewide.

Reach Ellis at (803) 771-8307.